Insights into Collaborating with a Software House for Product Development

In this article we explore the nuances of selecting the optimal product development approach, emphasizing the essential traits to seek for a successful product development journey. A perspective shared by of seasoned expert, leading development teams for 20 years at companies like Allegro, home.pl and Shoper.

Product development, particularly in the technology or deeptech sector, often entails a complex interplay between an organization’s internal capabilities and the specialized expertise of an external software house.

When planning to create and introduce a new product to the market or to develop an existing one, we used to wonder whether to do all the work ourselves or consider hiring a software house for this task.

While in-house development aligns perfectly with the organization’s vision and market understanding, certain scenarios necessitate the unique expertise of a software house.

In-House Development: The Core Advantage

The simplest and most effective product development strategy typically resides within an organization’s own team. This approach capitalizes on a profound understanding of the company’s objectives, culture, and customer base.

In-house development guarantees a product that resonates deeply with the company’s ethos and addresses customer needs, fostering innovation and user-centric solutions. If you have people with the right skills or the ability to invest in building product competencies (keep in mind that this road is winding!) and competent teams, the experience gained is irreplaceable; nothing teaches product development as effectively as actually developing products.

The uniqueness of markets, technologies, and customer groups can also make some knowledge closely tied to a particular organization.

Unfortunately, real-world constraints like resource limitations, technical gaps, the inability of business-oriented founders and managers to form tech teams and time pressures might necessitate external expertise.

When External Expertise Becomes a Necessity

From the get-go, this seems like an easy and straightforward route but the challenge lies in selecting a partner that not only aligns with the organization’s vision but also brings a wealth of experience and a proven track record in successful product development. Many technology providers lack extensive product development experience. They might excel in project implementation, but product development is a different ball game, where the journey begins post-project completion.

Remember, we build products for users. If we have to create something in collaboration with an external organization, you should feel that someone who has walked a similar path is guiding us. So, what are our options?

The sweet spot: A ‘Product Studio’

Yes, a Product Studio, meaning a software house that not only provides services but also invests in its own product development offers a distinct advantage.

This involvement extends beyond technical skill to include customer engagement, market expansion, user retention strategies, and an overarching understanding of the product life cycle.

A software house that develops its own products tends to have a more comprehensive view of the entire product journey. This can translate into many aspects of collaboration; for example, such a company is capable of helping define an MVP (Minimum Viable Product) that is not just a crappy version of your product.

You will learn what metrics are worth measuring, how to verify hypotheses with minimal effort, without the need to involve large teams and maybe what should not be done at all.

Such collaboration brings not just technical expertise but a thorough understanding of the entire product journey, enriching the development process with insights into user engagement, market expansion, and optimization.

A company that develops and manages its products possesses unique insights into security, performance and scalability issues. They have firsthand experience in efficiently scaling products, handling increasing data loads, and optimizing system architecture for peak performance.

Partial Solution: Choosing a Software House with Employees Skilled in Product Development

Another approach could be to seek out a software house that may not create its own products but employs individuals who have previously worked in product-based companies.

When forming a partnership, make sure to inquire about the specific product development experience of the team members. Discuss their past accomplishments, what they found satisfying, what surprised them, and how they see themselves applying their experiences in collaboration with you.

This approach is relatively straightforward and it’s highly likely that the company you partner with will have staff experienced in working with products. However, it’s important to note that their experience might often pertain to working on already stable, commercialized products. This means their experience could be just a segment of the entire product lifecycle. The knowledge you will be able to acquire through this collaboration will certainly be valuable, but it will be fragmentary.

For example, 2 years of work on a product that has been in the market for 10 years and achieved significant success, versus 2 years of work in an organization creating a product from scratch. In both scenarios, we are dealing with two years of product experience, but the latter may offer more crucial knowledge for you at this stage.

Conclusion

If you struggle with creating products on your own, then take the time to find a partner who has and develops their own products. Such a partner offers more than technical expertise; they provide a holistic perspective on product development, enhancing the potential for innovation, market fit, and sustainable growth. They also understand the nuances of product development and excel in scaling and optimizing in a dynamic market, embodying the essence of ‘walking the talk’ in product development expertise.

Przemysław Sinkiewicz — Head of Products at teonite, over 20 years of experience in product management, ex Allegro, home.pl and Shoper.