How to choose the right team setup to build successful products

You want to build a digital product? Great! Let's talk about your options and why a digital product & venture builder might be the best one

When building a digital product, the team set up you choose is an essential success factor—and today, building a product with your own tech team isn’t the only option, and it’s not always the best option, either. In this article we’re going to give you an overview of your options on how to build a digital product with all the pros and cons. But first, let's start at the beginning.

What options do you have?

So, let’s say that you have an idea and want to build a digital product—ideally as fast as possible. Depending on your kind of company and organization you either already have a Product & Tech Team or you don’t, which leaves you with the following options:

Let’s start with the first option: Build the product with your internal team

Of course that sounds like the natural solution–that’s why you’ve hired an internal team in the first place anyways, no? There’s definitely one main advantage of internal teams: you’ll grow and retain ownership of the internal knowledge about your product, which is important.

But you know what we hear quite often: Our backlog is full. Our tech team doesn’t have additional resources, which is obviously a question of prioritization and leads to delay. And, sometimes, we hear that the internal team is not capable of building that product at all. Let’s face it: In reality, internal tech teams are oftentimes already maxed out on keeping the engines running, fixing bugs and maintaining the existing tech stacks and their workarounds and maybe developing additional core functionality. But new products? No, not now!

So of course, you can just hire and expand your internal tech team. However, hiring simply takes time–time to find & hire them, time to train them, and time for them to learn to work together. And although it’s hardly reported coherently, time translates into cost, both direct and opportunity cost. And lastly, hiring only makes sense if you want to grow your team permanently and sustainably.

So, to summarize:

Working with Freelancers

Depending on the scope and the roles you are looking for, working with freelancers can be a valid option, too. It allows you to expand your internal team rather quickly and comparably cheaply—at least on paper. But finding the right freelancers can be challenging, especially if you’re not sure about the tech stack to be used and let’s be honest: the best talents oftentimes are not available right now and it’s hard to review or compare the output and quality beforehand.

Plus, there’s an even more important aspect to consider: to successfully work with freelance teams, you need internal experience and resources to steer them, which again translates into internal cost. And a freelancer or a team of freelancers need time to get on track with your project and your core team. They have to learn how to collaborate efficiently together, so you can’t expect full productivity right from the start. And, last but not least, you are steering them–so the output and quality of work depends heavily on the time investment and expertise you bring to the table.

So, to sum it up–while working with Freelancers can work for some companies it certainly doesn’t work for all kinds of organizations.

Hiring an agency

If you want someone available right now and with the right experience, digital agencies are a good place to go. They can provide you with teams ready to get to work, and this is a great way to get your product out there quickly, as long as you know exactly what you want. Because most importantly, you have to identify the right agency partner, which can be challenging if you are not experienced in that area or are overwhelmed by the plethora of full-service agencies that all claim they are the perfect fit for you.

But let’s be honest how agencies typically work: They need to utilize their available employees as best as possible so they naturally try to convince you to use a certain tech stack they feel most comfortable with, which could lead to limitations for your product. And in addition, they will staff their currently available resources on your project, which also might not be always the best fit to your requirements. And lastly, most agencies work typically on a Time & Material contract, which is fine especially in an agile product development method. But it’s also fair to say that this scheme oftentimes creates an incentive to scope projects more complex and longer than actually needed.

Oh, and the plethora of agencies we touched upon: There’s a gazillion of agencies out there, so picking the right one can be tricky. And sure, while near- or offshoring is a great way to optimize day rates and budgets, our clients tell us quite often that especially offshoring led to more resources needed than initially estimated and quality expectation and delivery can vary a lot.

But even if you have managed to hire the right agency there is a downfall many underestimate at the start: the transition phase for a handover of the product to the client team. At this point it’s very important to remember that products are not projects!

It’s important to remember that products are not projects.

Projects have a clear end date. Products don’t. That’s why the transition phase to an internal team has a crucial impact on the lasting success of your product and needs special attention.

But wait–your internal team is busy or you don’t even have one; otherwise you wouldn’t have hired an agency or freelancer. While this may be true when starting to build your product, we almost always encourage our clients to build up an internal product & tech team in parallel if you want to improve your product iteratively based on customer feedback.

And while we’re at it, we are happy to share some more recommendations of how to build great digital products fast.

Sure, now comes the part where we tell you that we have mastered all above pitfalls and are pure geniuses. Well, to some degree we are convinced that we work in the way a digital service provider should work in the 21st century and have pioneered an operating model that allows us to build better products faster. But we ourselves strive to get better each day, and are always on the road of improvement.

But let’s remember the core requirements you should aim for when building a digital product:

So how do we try to balance out these sometimes contradicting requirements?

Building products at a digital product & venture builder like MVP Factory

The core idea of product building at MVP Factory is that we work in an embedded, cross-functional team consisting of team members from you, MVP Factory and our massive talent network that work together on your product.

Be fast & flexible

By leveraging our global network of almost 3.000 experienced, verified, vetted and trusted developers and designers we can scale delivery teams up and down quite fast. The typical lead time to staff a product team or to add new roles & skills to the team takes us typically less than 10 days.

Choose the right tech stack

But more importantly, this network allows us to work truly tech-agnostic and staff talents experienced in your tech stack without having to convince them to our preferred stack. Sure, we have had good experiences with some stacks & frameworks and bad ones with others and are happy to consult you on that. But in the end we don’t have a hidden agenda and will recommend and work on the stack that suits your needs best.

Be cost-efficient & incentivize partners correctly

The main components of how much it will cost to build your product are always the necessary roles and resources (or estimated people days) and the applicable day rate of a certain role. This is also true for a fixed-price project, which we are happy to do if the scope is clear and fixed.

At MVP Factory we try to optimize cost on both sides: Since we work a lot in distributed and remote teams we can offer competitive day rates, especially if we work with talented and verified designers and developers from nearshore-countries in our network. So where is this network located? We mainly work with our friends from MVP Match, a spin-off from MVP Factory. 30% of the talent base is located in Germany, another 60% in Europe excluding Germany and the remaining 10% is distributed across the world and all talents had to pass multiple rounds of interviews and tests.

But how do we optimize the estimated people days needed for a project? There’s no simple answer, but it’s a mixture of experience, mindset and incentive. While we prefer working agile in a Time&Material setting we are open to working on Fixed Price-projects or even under a Work-for-Equity model if it makes sense for both parties which aligns the joint interests as best as possible

This also resembles our mindset when building products: To us it is very important to apply a pragmatic and entrepreneurial mindset, even without taking equity. But many of our colleagues have gained experience working in corporate ventures and startups, building startups and making pragmatic trade offs while not compromising for quality and overall user experience on a daily basis and this is probably one of our most important values.

Work with experienced partners & plan the transition to your internal team

But speaking of experience: Over time we have built many products and while every product is different, there are some similarities, be it tech-, team- or process-wise and we have distilled this into our processes, frameworks, standard setups and overall DNA.

But almost more important than building the first MVP in a project-like setting it is crucial to get the transition to the internal team right where our operating model fits in handy again. Most digital agencies have a strong incentive to sell one follow-up project and retainer after another. We don’t. Really. We bear the strong belief that an internal team needs to take over to make a product a success.

And we also like to talk of a transition period and not a handover from one day and one team to another. This does not work. Instead, we continuously scale our team down while you hire your internal team. And let’s be honest, some roles are easier and faster to hire than others, so we can support you exactly with the resources you need, scale our team up and down within 10 days and yes, at one point we’re out and you are taking ownership, which is sad and great at the same time.

Our core belief: Build products with an embedded, cross-functional and distributed team

And that’s basically our core belief to how digital products should be built today: Work in an embedded and distributed team with experienced Business Owners, Product Managers, Designers, Developers and other roles needed that take ownership in building “their” product regardless of contract situation or location. Work with the exact tech stack you need and let’s bring in the right people for that. And build your internal time while a service company serves as your speedboat to bring your product idea to market fast.

With that being said, what do you want to build?