Building your first app: Go in-house? Or with an agency?

As Tech City London continues to grow, many entrepreneurs are planning on building their first app. One of the first questions startups have is deciding whether to develop the app in-house or outsource to an agency.

As we work with a lot of startups in London and Copenhagen, we've drawn up a list of advantages and disadvantages for building your app internally or outsourcing to an agency.

Tim Groot (@tim_grand), Nodes Agency

In-house development

Advantages

• Control of project
  It can be great working together on a project and all being fully committed to it. It can seem tempting to start your first app in-house as you will have full control and be able to see each stage of the app development process.

• Manage your budget
  The price variation between agencies can be daunting. Are you paying more for quality or being ripped off? Is the cheaper option going to save you money or produce a poor quality app? Hiring a team in-house means you can control your budget more effectively and follow the app-building process step-by-step to see exactly where your money's going.

• Employees are always available
  When you hire an awesome technical team they are always available. When you want something changed in your app or suddenly have a great feature you want implemented, you can talk to your team directly.

Disadvantages

• Lack of experience and resources
  If you have never created an app before, you will likely spend a lot of time and money on acquiring the right resources. New staff, new equipment, and lack of experience of the app market could actually cost you more than going to an agency.

• Reliance on one developer
  If you decide to build your app internally you will probably only hire one developer. That means that you are fully reliant on one person. If they lack the necessary skills or motivation to take your project on board, you could end up wasting both your time and money on a poor quality app.

• Sourcing a great team
  Finding the right developers and designers is difficult. It's even more challenging if you don't know where to look. If you don't have any experience as a developer yourself, sourcing a skilled team can be tricky. That's why when we work with startups, we build the mvp (minimum viable product) and offer to help recruit a great team if you wish to later on take the app in-house.

Agency

Advantages

• More value for money
  Often in agencies, developers and designers are working on multiple projects. This means you only pay for the hours they are actually spending on your project. In contrast, if you hire a designer or developer in-house, you will be paying them for full day's work rather than by the hours worked on your project.

• Fast execution
  An agency will have a skilled team that has worked together beforehand, so you can expect the execution to be much quicker and efficient. Imagine a football team hiring the best players for every position. This doesn't mean you win the Champions League. You have to build a great team and that takes time. Agencies have established these teams internally and by letting them build your app, you can focus on the marketing and customer development instead of product development.

• Multidisciplinary team
  Agencies have a team of developers, designers, and project managers. Although only one of these groups might be working on your app, they'll often ask each other for their opinion. So-called 'knowledge sharing' is much easier in an agency than in an early stage startup with no co-workers in the same discipline.

Disadvantages

• The difference between agencies
  One agency might be more specialised in complicated enterprise apps while another might be better collaborating with startups. It's important to look at the apps they've built before and ask how they will approach your project.

• Agencies work on multiple projects
  As agencies will usually be working on a number of projects, their attention will be divided and not exclusive to your app. This can lead to potential delays in delivering your app, as well as potential drawbacks in communication.

• Changes along the way
  Startups often change their mind during development, which can lead to extra work for developers and projects going over budget. That is why a good agency will offer you the possibility to do the project on a time and material basis. This way, you only pay for the amount of hours and resources outlined and have more control of the project.

Let an agency build your MVP and take it in-house when it is a success.

My recommendation to startups is to let an agency build your MVP, and then take your project internally once the app has generated some traction. Yes, it's easy to hire a developer in-house. However, the hard part nowadays isn't just the technology. That's just the beginning. A good agency will have experience in building, producing, and launching an app, as well as what works and what doesn't. Take on an agency that can utilise their experience and give you advice to help you create an awesome app.

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