Why Startups Should Leverage a Nearshore Development Partner

Nov 20, 2012

Every entrepreneur who is looking forward to a successful launch of his IT or software business faces some startup issues. Not only is he facing the problem of developing the idea into a marketable commodity. Neither is it just one of his key tasks to allocate capital. The entrepreneur needs to lead a research team through the entire research and development lifecycle from the idea incubation to professional solution development (and the final successful commercialization).

So, he needs a team. A vital decision of Tech startup success. Though meagre funding plagues operations. Like many startups, a lack of cash flow also concerns Daxx’ customers. It is not easy to pursue a cost-effective, innovative development strategy without sacrificing quality.

Let’s face it, European senior and experienced developers are scarce and expensive.  Scaling up a business with these professionals is just not feasible. On the other hand, if failure of the project is not an option, hiring students or juniors presents too much risk due to a lack of skills and know-how.

Moreover, these youngsters are not very stable soon as they move into to senior-level roles. They will become an independent programmer or a project manager. This way it is impossible for an internet entrepreneur and his startup to guarantee quality on the long run. Neither can he set the expectations high or invest in his own staff and team building.

Therefore, startups might manage workforce issues positively if and when they consider outsourcing or nearshoring. While IT salaries may be high by local standards, they are significantly lower than those found in Western Europe. This wage differential translates not only into cost savings, but also gives the entrepreneur access to large pools of highly-skilled workers he can actually keep.

This is far more efficient and certainly cheaper. However, such investments should provide for true cost effectiveness so these developers should be guided. In essence, Dutchmen delegate their staff members far more friendly as American directors do.

Nearshoring has the further advantage that local programmers have a great spirit and don’t keep strict 9-to-5 hours.

But before the entrepreneur starts nearshoring operations, he should consider more pros and cons. Local laws are a hindrance, as are the culture differences and the language. Especially if he leads a small startup, the enterpriser should focus on his core business and not on HR. That’s why Daxx’ outstaffing model is a smart alternative for small companies and representative offices (max 30 employees): they have no need to organize their own HR department.

Daxx takes care of all the administrative red tape involved, i.e. Payroll, benefits, workers compensation, tax administration, recruitment, retention, hardware, communication etc. All areas of employee issues are encapsulated in the support that is provided by Daxx, for instance in Ukraine. Minimum overhead, maximum support and minimum risk with optimum returns.

Hence, nearshore staffing is an interesting way for startups to gain access to senior developers who interact transparently through the onshore team. By doing so knowledge stays constant and within the same organization. There is a lot entrepreneurs can benefit from IT outsourcing from reducing time to market to cutting down on the overall expenditure. This way nearshoring helps the startup to overcome the fear of insecurities and pursue high risk and reward in perspective. 

Build your remote software development team with Daxx. Contact us!


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