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Should You Find a Tech Co-founder or an Outsource Technical Development?

Published On
March 1, 2023
Read Time
Jay Magdani

You have a big business idea that looks good on paper. However, you must have sound technical knowledge when developing a tangible product. If you are a non-tech entrepreneur, a major challenge could be deciding whether you should find a tech co-founder or hire an outsourcing partner who will transform your vision into reality. Both options have their pros and cons. 

When Deepinder Goyal, founder and CEO of Zomato, launched his startup, he worked on the basic version of the product instead of outsourcing it. He later hired an intern to work on the product's first version. Zomato still doesn’t outsource any product development. On the contrary, Slack, Whatsapp, and Alibaba owe their success to outsourcing their product development right from the initial stage.
In this blog post, we will explore whether finding a tech co-founder or outsourcing technical development would be the right decision for you. 

7 Critical Comparison Parameters Between a Tech Co-founder and an Outsourcing Partner

As you can understand, finding a tech co-founder or an outsourcing partner is challenging for any founder. Here are various comparison parameters to help you determine the better option based on your requirements.

1. Roles and Responsibilities

A technical co-founder can bring the skills, knowledge, and expertise you need. They will be confident in taking charge of the product's technological development. Most importantly, they will be as passionate about the product as you are. Also, they will take on various responsibilities to help your startup grow.

An outsourcing partner is a third-party agency. They have the technical know-how, a strong workforce, and scalable operations but may lack the specific knowledge to fully understand your product development requirements. Moreover, they may not share your entrepreneurial zeal and business vision.

2. Commitment to Business 

As part owners of the startup, tech co-founders are expected to commit wholeheartedly to product development and startup success. They will invest more effort and time to make it a success.

An outsourcing partner has multiple ongoing projects, and you are just another client for them. Several people work on your product development at a time and will work only for specific hours per the contractual agreement. Their commitment is not as unwavering as the co-founder.

3. Cost Effectiveness

This is another important factor to consider for how to find a tech co-founder. A tech co-founder will most likely demand an equity stake and profit participation. Moreover, when you decide to develop the product internally, you have to procure hardware and software supplies which can increase operational costs. 

However, an outsourcing partner works on a contractual basis. The budget for product development is pre-determined in the agreement. They don’t have any right to equity or profits. They offer a complete IT set-up and resources to meet your requirements which could be more cost-effective.

4. Decision-Making 

You need to make several crucial decisions during product development. With a tech co-founder, you have someone to share your burden, all the highs and lows. They can give you emotional and moral support and advice so that you can brainstorm together and jointly arrive at a decision.

On the other hand, the outsourcing partner is entrusted with only the execution of orders and production. They are mainly non-interventionist when it comes to ideation and decision-making.

5. Product Idea Ownership

When you bring a tech co-founder, you must trust them entirely with your product idea, conceptualization, and development. You may or may not like their suggestions on product features, functionalities, and other technical aspects of the products. 

If you work with an outsourcing partner, your idea remains yours. You can develop the product just the way you have envisioned. However, you may miss out on logical and intelligent inputs only a tech co-founder can bring to the table.

6. Networking and Funding Opportunities

A tech co-founder can usually leverage their alumni, professional, or industry contacts for networking. They can find experts or mentors for handholding during product development. Moreover, investors tend to invest in startups run by multiple co-founders. Having a co-founder signals to the investors that you are open to expanding your team and diversifying your skill set. Moreover, multiple co-founders can often collaborate to minimize the risk of product failure.

For example, Drew Houston, the founder of Dropbox, applied for funding to Y Combinator in 2007. However, Y Combinator founder Paul Graham said he would fund Dropbox only when it has a co-founder. Later, Drew Houston secured funding from Y Combinator as soon as he onboarded a co-founder.

An outsourcing partner wouldn’t be able to help you with networking and funding in any way.

7. Time to Search

A tech co-founder can become a primary reason for the failure or success of your product development. You must consider their domain expertise, professional background, personal values, goals, and belief system. Also, you have to assess whether they have an entrepreneurial bug and are ready to be part of the startup culture and experience. Hence, it can take several months to find the right tech co-founder.

It is easier and less time-consuming to find outsourcing partners. You can find them at the click of a button on the internet, compare their proposals and choose the one you think is the best suited for product development.

Final Notes

There is no absolute right or wrong choice when deciding which is better between a tech co-founder and an outsourcing partner. You can weigh the pros and cons to see which option works the best in developing the product and aligns with your business vision.   

Scalix can be your driving force to guide you in the right direction and help you make an informed choice. This is because we understand all challenges young founders face in their entrepreneurial journey. You can join our Early Founder Program to learn how to find a tech co-founder or an outsourcing partner.

Talk to us to know more!