In the tech industry, this is quite a challenging situation, especially for low budget startups. That they must outsource or insource the product development. As both factors have pros and cons, at the same time.

For new tech industries, the approach of VCs is to outsource the product, due to the following reasons:

  • Cost Reduction
  • More access to resources
  • Focus on the core of the business
  • To improve product quality

But some tech business consultants think that by outsourcing a product development phase, for tech startups, is responsible for low-profit margin. They advised that problems faced by insourcing could be resolved through research and development.

Also by doing outsourcing a product. You become dependent on others and you can’t able to develop such a product. In which you think that it is the actual demand of your customer, in the market. As other’s ideas are imposed on you and you are unable to resist them.

But it is observed through market analysis that outsourcing of product development increases its value proposition in the market. Now the question arises which approach must be used by tech workers for product development.

A very simple answer to that in my mind is if you are financially strong. Then you must move to insource for your product development phase. Otherwise, you must adopt outsourcing for your startup business in the tech industry.

Tech Startups Conclusion

Outsourcing and Insourcing are both different approaches used in the product development phase, in business. Companies decide which method they must adopt which is more economical and more beneficial for them. But overall if we observe, in the tech industry. The common business trend for the product development phase is outsourcing methodology used. The reason behind this is that it is less liable and more economic to take a business startup in the tech industry. As you can easily get sponsorship on behalf of this method.

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I am Fahad Bin Shahid I love to write about the diversity in the technological sector around the world from Silicon Valley to the last resort of computer lab, tech inventions to innovative discussions I complete myself with all the ingredients related to technology and advancement.

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