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When should I look for a nearshore software development partner?

When should I look for a nearshore software development partner?
When should I look for a nearshore software development partner?

Outsourcing or offshoring your software development needs is not always the right path to follow. 

Reasons like the need for specialists, extra manpower, and budget constraints are often cited. 

This guide assumes you have already decided that you wish to outsource or find a collaborative partner internationally to build your product. 

The concept of nearshoring grew in popularity over the last years and it is described as the transfer of a business operation to a nearby country, especially in preference to a more distant location. 

The options when procuring outsourcing partners are overwhelming. 

The software development industry is a red ocean packed with agencies, freelancers, matching services, staffing companies…and the list goes on. 

The market is global, sales reps bombard everyone with undesired emails or messages, and finding a good partner or developer becomes stressful and time-consuming. 

Understandably, one turns first to one’s network to ask for guidance and referrals before embarking on this sourcing journey.  

How to start when looking for a nearshore software development partner?

There are simple strategies used when sourcing that can help you find the right path. 

I recommend starting by defining your needs, your expectations around results, service and collaboration, your urgency, and your budget properly. 

This will help you narrow the scope down and decide on search factors like what type of partner you will look for, where in the world they are located, what type of expertise they have, and within what budget range. 

1. Defining your needs

Defining your needs is a fundamental piece of the puzzle. 

Having an initial understanding of what you wish to build and how you want to engage with your partner will help you narrow your scope and reduce your prospecting time a whole lot. 

There are many ways in which you can engage with your vendor such as staff augmentation, managed teams, fixed-price projects, or turnkey projects. 

At this stage initial stage, I recommend you work on the following: 

A. Project requirements

Start by clearly defining your project requirements, including the scope, timeline, and desired technologies. 

This will help you communicate effectively with potential tech partners and ensure they understand your needs. 

Preparing documents like a list of requirements, a rough architectural diagram, and initial user flows can help your potential partners draft more accurate proposals. 

These will also help you understand your project’s complexity and the type of help you need. 

For example, a multidisciplinary team that executes on a deadline, a couple of developers that collaborate with your existing team, or experts that can solve a specific and complex problem. 

B. Identify your preferred technologies

Determine what technologies you want to use for your project. 

Whether it’s web development, mobile app development, or something else, knowing your preferred technologies will narrow down your search for a tech partner with expertise in those areas.

C. Describe your ideal engagement methodology 

Depending on your needs, you may expect your tech partner to work more closely with you or not. 

By defining how you wish your partner to collaborate with you, you will narrow your search based on work methodology and cultural traits. 

For example: If your project demands real-time collaboration, it would make sense to find resources who can work in your same time zone. 

At the same time, if your team is working on Scrum and you need your partner to work on the same project, you should prioritize resources that are familiar with Scrum and can comprehend and communicate appropriately in your language. 

Other relevant factors when describing your ideal engagement methodology include the duration of the project, the need to scale or descale over time, and your time urgency. 

2. Setting your expectations

Setting your expectations means describing what success looks like; including the product’s quality, coding standards, the degree of involvement/cooperation you wish, communication standards, time availability, risk of failure and its impact, and the duration of your partnership. 

For example, if you need to scale your team fast, working with a nearshore or offshore team that has the bandwidth to grow a team quickly and shares relevant cultural traits with you may feel like a great option. Those traits may include language, core values, relationship-building standards, communication patterns, and attitudes toward teamwork and collaboration. 

However, if you need a specialist to solve a specific problem, finding a vetted freelance expert would make more sense.

3. Budget and Urgency constraints

If you have specific hard deadlines and a limited budget, you should be honest about them and look for suitable options. 

Honesty from the very first meeting will help your candidate confirm if they can deliver what you expect and craft an adequate proposal that is in line with your budget. 

Sourcing and vetting a tech partner takes much longer than you think. Especially when you are looking for quotes on a project. 

Your transparency can prevent you from wasting valuable time refining scope or receiving off-budget proposals. 

4. Ranking your Prospects

Nailing all of these criteria will help you narrow your search scope. 

I’ve prepared the following Pros and Cons matrix to help you, at a very high level, understand the differences between local agencies, freelancers, nearshore, and offshore teams. 

This can help you pick a lane before adventuring into searching software development services on your browser. 

Criteria Onshore Agency Offshore Freelancer Nearshore Team Offshore Team
Pros – Diverse expertise – Cost-effectiveness – Similar time zones – Cost-effectiveness
– Scalability – Control – Proximity to client’s location – Diverse expertise
– Comprehensive services – Direct communication – Cultural compatibility – Scalability
– Established processes and methodologies – 1 on 1 relationship – Lower cost than onshore – Established processes and methodologies
Cons – Higher cost – Limited expertise – Possible time zone differences – Potential communication challenges
– Less flexibility – Limited scalability – Possible language barriers – Time zone differences
– Communication challenges – Reliability may vary – Possible cultural differences – Cultural differences
– Dependency on agency’s availability – Single point of failure – Time zone differences – Dependency on remote communication tools
Considerations – Suitable for complex projects – Suitable for small to medium projects – Balance between cost and proximity – Suitable for large-scale projects
– Requires clear communication channels – Requires clear project scope and deadlines – Evaluate language and communication skills – Requires strong project management
– Assess track record and client testimonials – Verify credentials and past work – Consider cultural fit – Assess track record and client testimonials
– Evaluate scalability and resource availability – Ensure availability and reliability – Assess potential time zone differences – Assess scalability and resource availability

Questioning yourself and answering honestly can help significantly during these initial stages.

I’ve listed the following questions as a guideline to help you figure out what your ideal partner looks like: 

  • What do I want to build, and how critical is it to my business? ie an MVP that will be the foundation of my business, a new feature to my core product, and a non-core project. 
  • Where do I need help building my product? ie Full design and development, adding a few resources to my team, strategic advisory, and full development. 
  • How important is it to my business? What happens if we succeed? And if we fail? 
  • How important is the product’s quality at this stage? 
  • How involved do I want to be in the process? 
  • How long do I plan to engage with the chosen partner? 
  • What does my working culture look like? ie Asynchronous, collaborative, independent, learning. 
  • How important is it to me that my partner adheres to my working culture? ie Scrum, video calls, written communication, etc. 
  • How important is it to me that my partner works in the same time zone? 
  • How much am I willing to invest in this project? 
  • How much can I invest per month on this project?
  • When should I have this project finished? Do I have any hard deadlines? 

Let’s see an example

“You are an early-stage founder. You are building a tech startup in the cybersecurity space in the US. You have a CTO or technical expertise in your domain. Your team is fully dedicated to the startup. You have a limited budget to design and build your MVP. Limited enough to put local agencies/freelancers off budget. You’d like experienced resources to get involved with your team daily. They must be available in your time zone and collaborate in English. You should finish the project in the next 4 to 6 months.” 

The time zone factor plus your deadline and collaboration expectations narrow your location filters to the Americas (nearshore). Or at least, this is an educated guess. You can look for freelancers or nearshore agencies. 

Nearshore is described as the transfer of a business operation to a nearby country, especially in preference to a more distant location. 

Nearby, in the current global and remote context, emphasizes time zones and cultural proximity. 

Finding a partner abroad with whom you can work together, almost as if they were part of your team. We can then figure out the engagement mode. 

Remember, you are building an MVP. 

Finding experienced folks working with startups at this stage would be a plus. Experience with cybersecurity would be a great value add. You need help with design and development which means you’ll have to find probably 3 to 5 collaborators. 

Finding 3 to 5 freelancers with different skill sets can take quite some time and involve high risks. You can use staffing agencies to speed up the process, but they will charge commissions that can feel heavy on your budget when you are looking at a 4 to 6-month project. 

You will have to onboard all new resources, manage them, and nurture a team feeling between them in record time. 

You could use other platforms like Upwork or Fiver to find qualified freelancers and save on that commission. But you will have to invest time in interviewing them properly to make sure you are hiring the right folks. A lot of precious time is gone. 

On the other hand, you can look for reputable agencies using client review portals like Clutch or TechBehemoths to name a few. 

You can search for agencies with cybersecurity experience. 

Agencies might take a bit longer to be ready to start, but they’ll bring all the resources you need, plus they would most likely bring in a PM to manage the team and their tech lead’s support. The best part is the teammates already know each other. They follow common best practices and are in the same time zone. 

You could ask agencies for a quote on your full project and a technical roadmap as part of your vetting process to get a better understanding of their skills and the way they work. They will most likely be more expensive than hiring individual offshore freelancers, but the service level and industry experience can be much higher. 

There is always a tradeoff between quality, budget, and time. The questions posted above can should help you figure out what your ideal, and affordable, partner looks like. 

A well-vetted nearshore software development partner may represent many advantages to how you launch and scale your startup. You may want to find a partner who can meet most of these criteria: 

  • Cultural and technical fit
  • Experience with early-stage startups
  • Industry-related experience
  • Similar project-related experience
  • Teammates already work together
  • Time zone overlap
  • Budget compatibility

My goal at Loopstudio is to match our clients with people in our team who engage with their mission and vision passionately, who stand up and say “I want to build this amazing project”, and conclude with the client confirming they wish to hire them. The cultural fit is as important as the technical fit when assembling a high-performing team. 

Entrepreneurs at an early stage don’t swim in cash. 

They often invest their life savings and probably their friends’ and family’s. 

The stakes are high, the pressure is on, and they need to build fast and efficiently to reach their next milestone. 

They often turn to partners as they lack the time and/or skills to build everything on their own. 

They need expert help, but it needs to be affordable and trustworthy. 

Many entrepreneurs turn to Latin American partners after having bad experiences with freelancers and offshore agencies. 

Gladly, LATAM’s software design and development reputation is growing. 

Word of mouth travels fast and the work done by national institutions to position each country as a reputable nearshore destination is paying off. 

In conclusion

Choosing a nearshore software development partner hinges on the need for specialized expertise, additional manpower, and budget management while valuing proximity for better collaboration. 

Startups and scaling companies must consider geographical and cultural closeness, alongside technical fit and cost-effectiveness. 

This strategy is particularly useful when aiming for quick, quality development without overstretching financial resources. Identifying project specifics, setting clear expectations, and evaluating potential partners carefully ensures a match that aligns with business goals, facilitating a partnership that extends beyond mere outsourcing to a collaborative, value-adding relationship.

If you want to talk more about how to find your next tech partner contact me at aruiz@loopstudio.dev. Happy building!