How to outsource app development without losing your shirt

Written by

Laura Bosco

The featured image for this blog post.

Most of our clients consider building their own teams before they approach us.

These founders like the idea of developing their own app with their own people, and that’s fair.

But what they quickly learn is interviewing individual developers and assembling an in-house team is a stressful and time-consuming process. Especially if you’re non-technical and aren’t entirely sure how to interview a technical person.

Don’t get me wrong, you eventually need an in-house team. But in-house isn’t always the right decision before you’ve built your product.

First, there’s all the overhead. When you build a team, you’ll face both structural overhead (benefits, paperwork, HR) and management overhead (building culture, keeping everyone happy, facilitating good work). Then there’s the skills dilemma. You don't need a full-time designer, product manager, project manager, front end developer, and backend developer—but you do need a little of all those skills.

And, of course, there’s the whole months-long, super hard hiring process.

When you’re still figuring out what to build and what customers want, building an in-house team is massively distracting.

The good news is: there’s an alternative, and it’s not learning code. It’s outsourcing.

Outsourced app development teams tend to be a lot easier to manage, especially for early-stage startups. You have a single point of contact, a single invoice each month, and experts that have already been vetted and proven to work well together on projects.

Meaning, rather than being swamped with hiring and overhead, you can focus on building your business. With outsourcing, you work from your strengths and get to market faster.

Here’s what you need to know to make that happen:

Who is this post for?

This post is primarily for non-technical founders who don’t want to spend months building an in-house team or years learning how to code. It’s also for anyone who’s looking to get a better grasp on why and how to outsource development. We mainly discuss outsourcing apps, but the principles apply to other types of development, too.

Should you outsource app development?

Whether outsourcing is a good move for you depends on your own skillset and how quickly you want to move.

You shouldn’t outsource app development when:

You should consider outsourcing when:

Most non-technical founders fit in the second list. And, contrary to popular belief, that scenario is only dire if you’re trying to raise big funds from VCs who prefer tech built in-house. In that case, your best bet is finding a technical co-founder...or other funding options.

For most other funding situations, including bootstrapping, outsourcing is a great choice. You should consider outsourcing if you don’t have the skills to build the app yourself and you want to get a product in customers’ hands quickly.

Benefits of outsourcing

There are five clear benefits to outsourcing:

Drawbacks and risks of outsourcing  

Where there’s an upside, there’s a downside. The benefits of outsourcing come at the following price:

data showing communication is the #1 remote challenge

According to research by FYI, communication is the #1 reported challenge with remote teams. If you outsource to a non-local partner, you’ll face this challenge too.                                

If you can handle these drawbacks, then outsourcing is doubly a good fit for your business.

Businesses who outsourced MVP app development in part or whole (hint: you’ve heard of them)  #

Groove, the popular customer experience platform led by Alex Turnbull, brings in $500k MRR. Slack, a messaging app you likely use, is valued in the tens of billions.

Besides being successful B2B SaaS companies, the one thing these businesses have in common is outsourcing all or some of their initial app development.

Alex Turnbull, the CEO and founder of Groove, initially looked for a technical co-founder. When the process for finding one proved incredibly difficult and slow, he turned elsewhere and hired an up-and-coming agency in Rhode Island. Reflecting on the decision, he points to the following realization as a tipping point: “Four months from now, I could have a living, breathing product in the market that would let me collect user feedback, get validation and push this business forward. Or, I could still potentially be sitting here with nothing.”

Turnbull and the agency completed a marketing site and initial app in four months.

Groove's current homepage

Groove is now used by 70,000 people and 10,000 businesses in 140 countries, according to                                


Slack, too, got off the ground thanks to outsourcing. Around 2012, Stewart Butterfield, CEO and founder of Slack, approached a Canadian agency to turn his rough prototype into something better. And they did. The agency handled the logo, marketing site, and UI/UX design for the web and mobile app. In turn, Butterfield’s team got the product to market quickly and started to grow rapidly—$0 to $1 billion valuation in less than a year.                                                                                                                       

NYTimes article about Slack's increasing stock


Slack’s valuation continued to climb after that first year.                                                           

Slack and Groove aren’t the only successful companies who outsourced to get off the ground. Other names you may recognize include Skype, WhatsApp, and Alibaba.

So, it’s accurate to say you’re in good company if you’re considering this route.

How much does it cost to outsource app development?

The short answer is it ranges from $5,000 to $500,000. While that may seem absurd at first, this actually makes sense when you break it down.

Imagine asking, “how much does it cost to update a kitchen?”

The first thing you’d want to dig into is, “what do you mean by update?” If you mean “I want a new stovetop and oven so I can stop hitting the $&@# microwave” (me last year) then you’re looking at a $2,000-$5,000 project.

But if you mean, “I want to gut the kitchen, install granite counters, tile the backsplash, add custom cabinetry, and, oh, move the sink over there,” then you easily jump to $30,000+. The final cost would also depend on factors like whether you hire a designer to layout the kitchen, and whether you hire the most in-demand contractors in town.                              

outsourcing app development like outsourcing home renovation


If you’ve ever done a home project before, you know: the more you add, the more it costs.                                

Likewise, the cost of your app will depend on what you want to build, and how you go about building it.

Let’s start with the what piece.

Why is app development so expensive? Understanding scope

If you work with a developer, they’ll call the what piece “scope.” The scope is everything your partner agrees to build for you.

Take the examples of Groove and Slack above. Groove walked away with a marketing site and a beta app. Slack walked away with a logo, marketing site, web, and mobile app. Based on that list alone, you can bet Slack paid more; their scope (what their partner built) was much bigger. Scope applies to the overall project, as well as each individual piece. (We’ll get into this more later on.)

The general rule is, the more stuff you want in your app, and the more complex each piece is, the more it’s going to cost. For example, when we looked at how much it’d cost to replicate most of what’s in Slack (and there’s a load of stuff in there), the price tag came in around $153,000. When we looked at how much it’d cost to build a much simpler MVP of the Starbucks app, that came in at $70,000.

Most apps we build for clients initially cost between $75,000 and $100,000.

That’s an overview of the what piece; the how piece is directly connected with who you hire, so let’s look at your two main options there.

Your 2 main outsourcing options: experienced freelancers and reputable app agencies

Hire one or more experienced freelancers

Quartz estimates there are over 56.7 million freelance workers in the US. Many of those are highly skilled developers and designers. Here’s what to expect if you work with one.

Costs of hiring a freelance app developer

Freelancers usually price by hour, by day, or by project (we cover these pricing structures in detail later). For easier comparison between freelancers and agencies, we’ll only look at hourly prices here.

Domestic freelance developers charge anywhere from $50 to $200+ an hour. According to Codementor, the median hourly rate for a freelance mobile app developer is $61-$80.

Generally speaking, a rookie developer will cost less but take more time (sometimes much more time) to correctly build an app. An experienced developer will cost more, but take less time to build a fantastic end product.



When you hire a freelance developer, it’s important to note you’re hiring one person.


When to hire a freelance app developer

When you hire a freelance developer, it’s important to note you’re hiring one person. You don’t get project managers, UI/UX experts, or designers. You get the freelancer you hire. And while some developers have experience in areas like UI and design, there are hardly any rock stars who are good at everything.

This means freelancers are ideal if you have a very clear idea of what you’re building and only need 1-2 people to build it. In that scenario, they’re a phenomenal option.

But if you need a whole team of experts, you’ll want to look into hiring an agency.

Partner with a reputable app agency

There are fewer agencies than freelancers, but each agency tends to have a high concentration of talent. Most agencies also have a wide variety of talent: design, development, UI/UX, servers, business development, product development, and project management.


Agencies also price by hour, day, or project. (Again, we’ll ignore project and day rates here for easier comparison.)

Domestic agency hourly rates range from $125 to $800+ depending on the size and type of agency. Larger agencies that target enterprise and fortune 500 companies will land on the higher end of the spectrum ($500-$800+). Smaller agencies that target small and medium businesses will land on the lower end of the spectrum ($125-$500).

However, keep in mind the hourly rate may skew higher for either type of agency if your app is particularly complex or requires a very high level of expertise. In that case, the agency may need to put their most experienced (and most expensive) personnel on the job.


Krit's team of app developers


Teams are a big agency benefit. They mean you have more minds working on your problem, faster delivery, and plenty of lifelines.                                                           


When to hire app development agencies

If you’re looking for some help thinking through your idea, planning out the development process, and building a robust version to put in the hands of customers, then an agency is probably right for you.

7 factors to consider before you outsource your app build

Whether you choose a freelancer or an agency to outsource your app to, there are 7 major factors you need to consider:

We cover each of these in detail below.

Project type: do you need a prototype or an MVP?

One of the first decision-points you’ll face is: prototype or MVP?

Prototypes are great for entrepreneurs who are:

If you’re looking to demonstrate a core concept, we’d actually caution you against outsourcing. There are more ways than ever to build a no-code prototype, and it’s very likely you can test a key assumption without hiring anyone. Check out our five examples of no-code prototypes and our list of no-code tools for inspiration.

The one instance where you may want to outsource a prototype is when you’re raising funds. One of our partner founders and CEO of Case Status, Lauren Sturdivant, credits the prototype we built as a reason she was able to raise a friends and family round.

She says, “When I showed the Case Status prototype to friends and family, their eyes lit up. I explained the problems, and they saw and understood how Case Status solves those problems. There is something about having a working prototype that brings legitimacy to what you are doing.”

Clickable Prototype

The clickable Invision prototype Lauren Sturdivant used to raise funding and build the first version of Case Status. InVision makes the prototype feel like a real application, even though there's no code behind it.                                                    

MVPs, on the other hand, are much more robust than prototypes and serve a different function. Whereas a prototype is often scrapped, MVPs serve as the basis for the long-term product. You do want to outsource these.

MVPs are great for entrepreneurs who are:

Whether you need a prototype or MVP depends on the stage of your business and your goals moving forward. Do you already have a clear idea of exactly what you want to build? (MVP) Do you want to start onboarding users and generate revenue? (MVP) Or do you want to show something basic to investors to convey an idea or concept? (Prototype)

It also depends on your budget—expect MVPs to be more expensive than prototypes.

If you need a polished prototype for fundraising, you could hire 1-2 freelancers. If you need an MVP, you’ll want to consider either a team of freelancers or an agency.

Overall scope: what actually needs to be in the app?

As we mentioned earlier, the “scope” of the project is what you agree to build. If something is “in scope,” it falls within your current agreement and you are not charged more. If something is “out of scope,” it is outside what you agreed to, and you can expect an additional bill.

Most founders are tempted to go big on the scope—to include as many features and items as they can afford—even when they’re building an MVP. We understand the temptation, but we strongly caution against this. The bigger and more complex a project is, the harder it is to scope, and the more likely everyone’s estimates are wrong.

In contrast, leaner projects and apps are more straightforward to estimate. They’re cheaper and faster to build, get you to market more quickly, and are less expensive to maintain over time.

There are other benefits too. If you’re still learning a lot about your customer base and niche (as most early-stage startups are), a leaner app will be easier to course-correct than a feature-packed one. Since every app changes once it’s in customers’ hands, this is very important to keep in mind.

As Andrew Morris, one of our clients and the founder of Greynoise, pointed out, “you can always come back. Perfect is the enemy of good. You need to get something in people’s faces as soon as possible.”

To nail down the minimum scope you need to solve a customer’s problem, we recommend going through our roadmapping process. We’ve publicly shared the step-by-step process and templates we use in our own Roadmapping Sessions, so you can replicate it wherever you are.

Pricing structure: hourly, daily, or project-based?

Freelancers and agencies use a few different pricing models. Each of these models has benefits and drawbacks. Here’s what you need to know about each one:

Hourly pricing

This is the most common freelancer pricing structure and is common in agencies as well. With this pricing structure, you pay a set fee for each hour the developer spends on your project.

Hourly pricing results in more frequent conversations about can quickly turn relationships sour.


Occasionally, you’ll see hourly rates packaged into “retainers.” In these agreements, you purchase a set amount of hours per month. Some freelancers and agencies pitch this option because it helps them manage their workflow and time. This arrangement works well in the maintenance period (after the app launches). However, it can be a slow way to build the app from scratch; once you’re out of hours for the month, you’re out of hours, and development pauses until the next month.

Day or half-day pricing

You’ll most often see this pricing structure for UK freelancers and agencies, though some US-based workers have adopted it as well. With this pricing structure, you pay a set fee for each day or half-day the developer requires to complete your project.

Project-based pricing

In most cases, project-based pricing means a set price with regular payment installments. You know exactly what and when you’re paying before the project starts.

When choosing a freelancer or agency, it’s very important you understand what pricing model you’re “getting into.” Which option is best for you depends on your cash flow and how you’d prefer to manage your budget. I.e. do you want to set the price once and then forget about it? Or would you rather revisit your budget each month?       ’s very important you understand what pricing model you’re “getting into.”


We use a hybrid of project-based and hourly pricing at Krit that blends the best of both worlds. And we’re able to do that because we carefully define every scope in a Roadmapping Session and meticulously estimate the number of hours that scope will take us.

Timing: when you do need your app?

While outsourcing is much faster than building an in-house team, there are a few steps most founders tend to forget. These are:

Researching and interviewing partners can take as little as a week or as long as a month. Likewise, negotiations could take anywhere from 24 hours to a week or more (especially if you need legal review). This means it could take you a month or more to vet and sign a potential partner.

Even then, if your preferred partner is in high-demand, they may not be able to start work immediately. The best freelancers and agencies are often booked out for at least a few weeks.

While it is possible to quickly hire someone off a freelancing site that can start tomorrow, it’s important to weigh the pros/cons of doing so. Is getting to market 1 month early worth the repercussions of a hastily built and poorly functioning product? (Keep in mind you’ll pay for bad software twice: once to build it and again to fix it!)

Skills: what kind of expertise do you need?

Most entrepreneurs assume the best developers are those with the strongest technical abilities. Founders see tech giants like Google establish notoriously difficult interview processes to ensure developers know the ins and outs of complex technical problems...and are certified geniuses.

So, why shouldn’t your startup demand the same level of expertise?

The simple answer is that smart technical people tend to over-engineer solutions. They enjoy building an optimal product more than they enjoy bringing a product to market.

For example, they may be drawn to the latest and greatest cutting edge technologies rather than selecting the most practical and affordable solutions to your problem. Using the latest and greatest frameworks that have the fastest runtime is great...until you need to hire more engineers and can’t find anyone with experience to join your team. (Also, geniuses are very expensive.)

All of which is why it’s often a good idea to work with a generalist or an agency with multiple skill sets. That way, you can solve the problem in the simplest and most elegant way possible without over-engineering a solution.

Location: is local, domestic, or offshore ideal?

So far, we’ve mainly focused on domestic talent. But the fact of the matter is, you can hire developers from all over the world.

If you want to meet with someone in person and often, your best bet is to look at outsourcing options in your city or region.

But if you don’t mind communicating via video and text, your options get much wider.

Map of options for outsourcing app development over the world

There are professional developers all over the world. Source:                                

Offshore companies have a reputation of being cheaper...and they are. Many offshore freelancers and agencies are ½ to ⅓ of domestic prices. But keep in mind a lower price rarely correlates with higher quality.

There are few other things you’ll want to consider as well:

It’s not impossible to work well with an offshore team, but you’ll trade some notable challenges for a low price. Make sure you’re up for it!

Trust: can you confirm they regularly do good, repeatable work?

Although it’s not always feasible, we do recommend you meet your outsourcing partner at least once in person. Yes, it’s an added cost and inefficient. But the cost of airfare is much cheaper than the cost of a bad hire. It’s much easier to interact with someone you’ve actually met in person, not to mention assess whether you’re a good fit.                                                            

For the sake of your app (not to mention your sanity), it’s crucial you trust whomever you contract.


What we’re getting at here is evaluating trust. If you’re contracting someone to build your MVP or app, you’re putting part of your business in their hands. You’re also committing to interact with this person every week for at least 2-3 months. For the sake of your app (not to mention your sanity), it’s crucial you trust whomever you contract.

Here are three key questions to ask when evaluating potential partners:

app development testimonials

Make sure you check out what clients have to say about your potential partner.                                

Yes, you want to listen to their pitch and what they say they can do. But even more than that, you want to evaluate what they have done. As the trope goes, “actions speak louder than words.”

5 tips to ensure outsourcing your app goes really, really well

Any project can go sideways. That’s true whether you’re making a meal, remodeling a kitchen, or building an app. We’ve had more than one client tell us about outsourcing gone wrong, and you’ve no doubt heard some stories yourself.

Here are 5 ways you can work well with your vetted partner and safeguard your project against a downward spiral:

Pay for quality

Software development is expensive, and it’s tempting to accept the cheapest proposal when your options are all pitching a similar result.

However, the “you get what you pay for” mantra applies to software development just as much as other areas of life.

If you want a high-quality result, you should be prepared to pay a proportionate price for it. That doesn’t mean you should overpay for a project, but it does mean you should be prepared to spend a fair market rate. And if you don’t have the budget, you’re better off narrowing your scope than hiring lower quality developers.

Understand where you fit into the picture

There’s a fine line between participating in a project (very helpful) and micro-managing a project (very unhelpful). As the founder, you wear an incredibly important hat..but you don’t wear every hat.

When you outsource app development, active and helpful participation looks like providing:

Whereas unhelpful micromanagement looks like:

Generally speaking, you want to bring customer and industry knowledge to the table in a way that strengthens and guides overall development. You also want to provide helpful, outcome-based feedback. Both are critical.                                                need to let the developers do what you hired them to do—namely, design and deliver an incredible piece of software.


A counterpart here is, you need to let the developers do what you hired them to do—namely, design and deliver an incredible piece of software. You know your customers and the features they need to reach their goals. Developers know how to design and build applications to maximize the user experience. Play to your strengths, and let them play to theirs.

Hold weekly meetings to measure progress

So how do you provide developers with enough input, but at the same time, let them do what they do best?

Weekly calls are a great way to strike this balance.

They’re an effective way to hold developers accountable, ensure everyone is on the same page, and supply input the team needs to keep moving.

The three most important topics to cover are:

  1. What did you accomplish over the past week? Developers should discuss, and sometimes even show you their progress over the past week. Catching errors early on can save a lot of time, money, and re-work over the long run.
  2. What are you working on this week? Developers should have a clear idea of where they’re headed next and what’s a priority.
  3. What’s getting in your way? Answer any questions that may be holding them up and provide any feedback.

These three questions tell you where the project stands and helps you identify any ways you can help things along by removing bottlenecks. And if there have been any visible updates, the developers may also walk you through a demo during these meetings.

Review your invoices to stay on budget

Especially if your project is billed by the hour or day, we recommend looking through invoices to ensure that the project is progressing on budget.

If there is a risk of running over budget, you should immediately inform the developers and have an honest discussion about how to manage the budget and scope throughout the rest of the project. Oftentimes, this means reducing scope or removing a feature. What you really want to avoid here is running out of money when the application is in the middle of development. It’s better to cut scope and finish a minimal version of your product than have a partially completed app that’s entirely useless to the customer.

Of course, the ideal scenario is starting with a small scope and begin developing the app with a conservative budget, then focus on adding features down the road!

Build your audience and research customers while you wait

If we asked you whether you believe, “if you build it, they will come.” You’d probably say no. You know there’s more to launching a business than that.                        

While the product should stay a priority, there are other areas that need your attention too.


While the development team is doing what they do best, you want to focus on talking with customers, exploring marketing channels, and building your audience:

community helps app development

According to research by First Round Review, your community is your secret weapon.                                                 

Outsourcing your app doesn’t have to be overwhelming

Building a business isn’t easy...and probably never will be. But that doesn’t mean every step should have you stress-eating Doritos at your laptop.

While outsourcing is a big decision, it’s much easier to navigate when you understand your options, pros and cons, and important factors like pricing (and how that even works).

Have more questions? Schedule a free strategy session!

If you have a prototype or a scoped idea but aren’t sure where to start, book a free strategy call with Andrew.

He’ll help you think through what to do next and what you can expect moving forward.

Laura Bosco is a writer and people person. She helps tech startups do tricky things, like explain who they are and what they're doing. Ping her on Twitter to say hi.