As an early-stage startup founder, one of the most critical decisions you’ll face is how to scale your software engineering team. You have a great idea, perhaps even an MVP, but the next step—turning that idea into a scalable product—requires a technical team to match your vision.
At this crossroads, you’re typically faced with three options:
- Hiring an in-house team
- Engaging a development agency
- Working with freelancers
Each option has its own set of advantages and challenges, and the best choice depends on factors like budget, project scope, speed of development, and long-term plans.
In this article, we’ll break down the pros and cons of each option:
1. Hiring an In-House Team
Pros:
- Full control: When you hire an in-house team, you have complete control over your engineering processes, priorities and long-term strategic direction. This is ideal for more established businesses with a long-term product roadmap.
- Commitment & Accountability: In-house developers are fully committed to your startup’s vision, providing continuity and in-depth knowledge of your product. This is ideal if your product is complex and will require constant iterations.
- Cultural fit: Building a team from scratch allows you to recruit individuals who align with your company culture, values, and long-term vision.
Cons:
- High cost: Salaries, benefits, office space, equipment, and training can quickly add up. For a UK-based startup, competing for experienced software engineers with larger more established companies is a challenge in the early stages where budgets are tight. With over 80% of professional developers surveyed by Stackoverflow in 2024 already full time employed.
- Investment in training: Due to fast changes in technology, the industry is seeing even the most skilled developers needing more and more training to stay abreast of recent developments. With some employers struggling to retain top-devs who are keen to ensure they’re exposed to a large variety of technologies and projects to keep up.
- Time to hire & manage: Finding, vetting, and onboarding the right talent takes time—often months. For early-stage startups needing to move quickly, this lag can be a disadvantage. Beyond financials, managing an in-house team requires ongoing time, attention, and leadership to maintain performance and motivation. If you’re not a technical founder, you might also need to bring in experienced management.
2. Hiring a Development Agency
Pros:
- Expertise and efficiency: Agencies come with a ready-made team of developers, designers, and project managers who have likely built dozens of similar products. They can often deliver a complete solution faster than you could with an in-house team.
- Flexibility: Agencies allow you to scale up or down as needed without the long-term commitment of full-time salaries. This can be useful if you expect varying workloads over time.
- Less management overhead: You don’t need to worry about managing day-to-day operations. The agency takes on project management, allowing you to focus on your business.
Cons:
- Higher short-term costs: While agencies can provide efficiency, they can come with higher upfront costs. Hourly or project-based rates may seem expensive compared to in-house salaries, despite carrying less risk and infrastructure requirements.
- Less control: While an agency offers expertise, you may have less control over the development process, tools, and decisions. Miscommunications or misalignment with your vision can lead to unsatisfactory results.
- Potential for conflicting priorities: Agencies often juggle multiple clients at once, so your project might not always get immediate attention, especially if it’s not their biggest account.
3. Working with Freelancers
Pros:
- Cost-effective: Freelancers are often the most affordable option, especially for startups with smaller budgets. They offer flexibility in terms of contracts, hourly rates, and project-based work, allowing you to pay only for the work you need.
- Access to specialized skills: You can hire freelancers with specific expertise for certain aspects of your project, without committing to a full-time hire.
- Fast turnaround for small projects: If you have smaller, well-defined tasks or need to prototype quickly, freelancers can deliver faster without the overhead of an agency or in-house team.
Cons:
- Less commitment: Freelancers might not be as dedicated to your project as in-house employees or an agency. They could be juggling multiple clients, meaning their availability and focus might wane.
- Management burden: You’ll need to manage freelancers directly, including timelines, quality control, and coordination between different freelancers. If you’re working with multiple freelancers, managing a coherent team can be challenging.
- Quality control and reliability: The quality of freelancers varies widely. Finding skilled, reliable freelancers who meet deadlines and deliver quality work can be a challenge, especially without personal recommendations or experience vetting talent.
How we’re building a better way
We built FiftyFive Technologies UK to offer Founders the quality and commitment of an inhouse team without the risk, time or cost investment of full-time employment.
We’re an agency. But because our team works completely remotely across a number of global markets, we are extremely competitive on price. And because we have a team of over 200 developers at your disposal, we’re betting we’ve got expertise in just about every technology you can think of.
We work in two ways, aligned with the goals of our customers:
- One-off MVP development
- Extending your team to work on an existing project
MVP Development
For those ready to make their idea a reality, we specialise in lean, cost-effective MVP development to help you validate your idea, acquire early users and have conversations with investors.
Usually taking around 8 weeks, we’ll guide non-technical founders through the process from start to finish. We wont sell you on a tonne of features you don’t need. Just the core functionality that will solve your target market’s problems and show investors what you’re all about. Find out more here.
Extension of your team
For those with existing projects or looking for a more cost-effective way to build out an internal development team – we place our skilled developers within your business.
While they remain employed by us, our developers work as a member of your team and are dedicated to you and your business for your chosen duration. They’ll work alongside your existing team, in your ways of working. We’ve found this leads to better job satisfaction for our highly skilled team, and a better experience for our clients. Find out more here.
Whatever route you chose, it’s important to find a solution offering the right balance of speed, cost, quality and time needed from you – that allows you to get back to thinking about your business.
Ready to get your project off the ground? Reach out to our team here.
