Outsourced Development vs In-House Team
Both deliver custom software — the right choice depends on your stage, budget, and how central technology is to your strategy.
Every growing business that needs custom software faces this question: hire developers and build internally, or partner with an external firm? Both paths lead to custom technology — but the tradeoffs in cost, ramp-up speed, and institutional knowledge differ dramatically.
Neither approach is universally superior. A venture-backed startup probably needs an in-house team. A mid-market company that needs a custom operations platform but isn't a technology company probably gets better outcomes from a development partner. Many use a hybrid model.
The True Cost of Building In-House
In Seattle's market, a competent full-stack developer commands $100,000-$150,000 in salary. Add benefits, equipment, and recruiting costs, and the fully-loaded cost approaches $150,000-$200,000 annually. A functional team costs $500,000-$700,000 per year before writing a single line of code.
Recruiting takes 2-4 months per role. New hires need onboarding to understand your domain and codebase. A realistic timeline from deciding to build to shipping production software is 6-9 months — assuming you hire the right people on the first attempt.
Recruitment Challenges
Seattle's talent market is fiercely competitive — smaller companies struggle to compete with Big Tech compensation.
Ramp-Up Timeline
From job posting to productive output typically takes 4-9 months per role.
Retention Risk
Developer turnover in Seattle averages 15-20% annually — each departure takes institutional knowledge.
The Tradeoffs of Outsourced Development
Outsourcing offers speed and cost flexibility. An established partner has the team assembled, processes refined, and expertise proven. Projects start within days rather than months, and cost shifts from fixed overhead to project-based investment.
The risks are real but manageable with the right partner. A Seattle-based partner like Scale Labs eliminates timezone problems, uses milestone-based billing that aligns incentives with outcomes, and invests in understanding your domain before writing code.
Immediate Capacity
Senior developers, designers, and project managers ready to start — no recruitment or onboarding delays.
Flexible Cost Structure
Pay for development when you need it — scale up for builds and down for maintenance phases.
Breadth of Experience
External teams bring patterns and solutions from dozens of projects across industries.
Outsourced Development vs In-House Team vs Custom Software
| Feature | Outsourced Development | In-House Team | Custom Software |
|---|---|---|---|
| Time to First Delivery | 2-6 weeks (team exists) | 6-9 months (recruit, hire, onboard) | Scale Labs begins discovery within a week and ships code within the first month |
| Annual Cost (Equivalent Team) | $150K-$400K project-based | $500K-$700K+ fully loaded | Senior team at a fraction of the hiring cost |
| Domain Knowledge | Must be transferred | Accumulates naturally over time | Scale Labs invests in deep domain understanding upfront with dedicated team assignments |
| Scalability of Effort | Scale up or down quickly | Fixed capacity — hiring/layoffs are slow | Elastic team capacity matching your project lifecycle |
| Technology Breadth | Access to specialists across stacks | Limited to what your team knows | Full-stack expertise across modern frameworks, cloud, and AI |
| Long-Term Flexibility | Can switch vendors | Full control but locked to capacity | Open-architecture code you own — continue with us, bring in-house, or hand off |
The Verdict
If technology is your core product and engineering culture is central to success, invest in in-house. SaaS companies and startups with continuous development needs should build internally.
For businesses where software supports operations but isn't the product — professional services, logistics, manufacturing, healthcare — a development partner delivers better outcomes at lower cost. Scale Labs serves as a fractional engineering team for Seattle businesses.
Frequently Asked Questions
Can we start with Scale Labs and transition in-house later?
How does Scale Labs handle domain knowledge?
What about vendor lock-in risk?
Need Engineering Capacity Without the Overhead?
Scale Labs gives Seattle businesses access to a senior development team without the cost and complexity of hiring.