Digital strategy for startups: maximizing impact, not just savings

For startup founders navigating the digital landscape, every decision comes with a tradeoff. Build internally or outsource? Develop custom software or rely on existing solutions? Prioritize speed or long-term scalability? 

These questions don’t have universal answers, but making the right choices can determine whether your startup thrives or stagnates. While a well-thought-out digital strategy might not always save you time or money, it ensures that both are spent where they matter most.

Build, buy, or rent? The product development equation

When developing a digital product, founders must decide whether to build their technology in-house, buy existing solutions, or rent third-party services. Each option has distinct advantages and challenges:

• Building internally: Ideal for startups with proprietary technology as a core differentiator. Offers full control, customization, and scalability but requires significant resources, technical talent, and ongoing maintenance.
  
• Buying off-the-shelf: Works well for non-core functions (e.g., CRM, analytics, or payment gateways). Saves time but might lack flexibility and scalability.
  
• Renting (SaaS or cloud services): Perfect for quickly deploying essential capabilities without heavy investment. However, reliance on external providers can introduce dependency risks and ongoing costs.

During my career, I worked in a startup and also consulted some startups, and I’ve seen firsthand how these decisions play out. Jean, a founder I worked with, had a strong background in logistics. He spotted inefficiencies in how tasks were manually handled and envisioned a digital solution to streamline operations. At that time, he worked for a logistics operator and pitched the idea internally. It got some interest but not real funding. Having some technical background, he started building the product himself. While his passion was commendable, he quickly ran into challenges—technical hurdles, integration issues, and a lack of scalability. Eventually, the company pivoted to hiring external developers to refine and scale his concept. If Jean's company had sought external expertise earlier, would they have accelerated development and avoided costly missteps?

Maximum value vs. minimal viability - a paradigm shift 

A startup’s approach to digital strategy should align with its broader business objectives. Are you scaling an existing model or disrupting an industry?

• Scaling: Startups looking to rapidly grow their existing business by pivoting from project-based work with their clients to a SaaS solution where the customers have more control.
  
• Disrupting: Startups that have found a completely original solution to an existing problem and try to make their solution a part of everyday lives. 

Another founder I worked with, Mark, had a completely different journey. As a frequent business traveler, he envisioned a platform to improve the social lives of travelers. With a strong business background in an established industry, he secured funding. Unlike Jean, he had no technical knowledge and no team. He opted to work with an external development agency to create an MVP. Working with the team on his ideas, Mark focused on the Maximum value rather than the minimal set of features. This slightly different approach to Minimal Viable Product - they nicknamed it MxVP, to stand for Maximum Value Product - allowed Mark to test his idea quickly without the burden of assembling an in-house team prematurely, and also to focus on core business rather than the sole development.

In-house development vs. external expertise

The debate over hiring internal teams versus outsourcing hinges on speed, cost, and long-term control:

• Internal teams: Provide deep product knowledge and long-term alignment, but come with recruitment challenges, high salaries, and ongoing operational costs.
  
• External agencies & freelancers: Offer specialized expertise, flexibility, and quick turnaround, but may not always align with your long-term vision.
  
• Hybrid approach: Many successful startups begin with external teams to accelerate development while gradually building an internal team for sustained growth.

One often-overlooked advantage of working with development agencies is that some have their own cloud infrastructure, offering a cost-effective alternative to major hyperscalers like AWS, Google Cloud, or Azure. These agency-owned infrastructures can provide startups with lower costs, better support, and tailored solutions that fit their unique needs. Additionally, many agencies offer free or discounted cloud environments during the development and testing phases, helping startups reduce early-stage expenses while validating their ideas.

Choosing the right approach depends on the startup’s stage, technical needs, and available funding.

Spending wisely: making strategic tech investments

While no digital strategy guarantees savings in time or money, a smart approach ensures that investments drive meaningful outcomes. Founders should:

• Prioritize core competencies: Invest in technology that gives a competitive edge while outsourcing non-core functions
  
• Think long-term: Quick fixes might save money now, but cost more in the future. Consider the scalability, security, and maintenance of tech decisions.
  
• Leverage no-code & low-code: These platforms can rapidly validate ideas without heavy development costs.
  
• Be agile: Avoid rigid, long-term commitments unless necessary. Instead, focus on iterative development and learning from user feedback.
  
• Take advantage of free cloud for development & testing: Many cloud providers and agencies offer free tiers or credits that can significantly reduce early-stage infrastructure costs.

What is the next step for your startup?

Startups succeed not by cutting costs but by spending wisely. 

A smart digital strategy ensures that every euro and hour spent serves a strategic purpose. Whether building internally or outsourcing, scaling or disrupting, the key is to align digital decisions with business goals. Thoughtful investments in technology won’t always save you money or time, but they will ensure that both are spent in ways that drive sustainable growth. 

In Barrage, we have the fortune to work with some of the leading brands and also startups that are trying to bring the best of their ideas. Our incredible team of passion-driven, top-notch talents has a deep vertical understanding of modern technologies. They are working on ways to leverage artificial intelligence, data science, and baseline computing to construct state-of-the-art digital platforms and improve user experience and customer success. Book a meeting with one of our representatives so we can see together how we can help you on your journey.

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