CEO at Relevant

Hiring Freelance Developer vs. Software Development Company – The Startup Choice

March 24, 2023

Relevant Founders

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The excitement of devising an incredible new software idea can quickly fizzle out when faced with the daunting task of bringing it to life. Regardless of your vision’s scale or simplicity, the devil is in the details – or, in this case, the developer’s work. While a one-of-a-kind concept is essential, the execution is where the rubber meets the road.

The pressing question remains: Who should you entrust with building your software? Is it a freelance software developer, or should you join forces with a software company for web and mobile development? Ultimately, the decision rests in your hands, and the consequences are significant.

In this article, we’ll dive deep into the pros and cons of hiring a freelancer versus an agency for startup software development. By the end of the reading, you’ll probably understand which option suits your company’s software development needs best. So, let’s get started!

Freelancer vs. Agency for Software Development: Overview

“You get what you pay for” is an adage when choosing between a freelancer and a software agency for your startup’s software development needs. 

When considering a freelancer, you’ll find they typically offer more flexibility, lower costs, and a personalized approach to your project. That is why freelancers can be a great choice for smaller, well-defined projects or when you require a specific skill set. However, they may not be suitable for large-scale or complex projects where the expertise and resources of an agency become essential.

Though agencies tend to be pricier, they offer a degree of stability and scalability that can be priceless for startups with lofty aspirations. These teams include seasoned professionals such as project managers, developers, designers, business analysts, and quality assurance experts. Many software engineering firms offer complete system development life cycle (SDLC) services, covering everything from project concept to market launch.

Various factors influence a business’s decision to choose a freelancer over a development agency or vice versa. Certainly, there isn’t a universal solution, as freelancers and agencies have their own set of pros and cons. Let’s look at those.

Pros of Hiring Freelancers

As we gear up to delve into the advantages and drawbacks of hiring a freelancer, let’s first take a moment to refresh our memory with some basic information. 

Freelance software programmers enjoy the liberty of juggling various projects, wearing different hats to suit their preferences. They can hop on board with a short-term contract, moonlight as freelancers, or even plunge into full-time work – all from the comfort of their remote workspace. 

However, bear in mind that with great freedom comes potential risks; freelancers are known to do many things at once which could impact their focus on your project.

Cost-effective rates

Freelancers typically operate with lower overhead costs and can offer more competitive rates than agencies. Moreover, as freelancers have yet to be officially employed, you can skip concerns about insurance, taxes, work equipment, and team dynamics. That makes them an appealing option for startups and businesses with tight budgets.


In today’s digital age, finding talented freelancers has become easier than ever. In the United States alone, there are more than 57 million freelancers, which includes millions of freelance app developers. Various online platforms and job boards (Upwork, Freelancer, Guru) connect businesses with skilled freelancers worldwide, making hiring straightforward and convenient. 

Direct Communication

Engaging with a freelance software developer enables more direct and personal communication, facilitating faster decision-making and a clearer understanding of your project requirements.

Specialized Expertise 

Many freelancers possess niche skills or focus on specific areas, making them an ideal option when you need targeted expertise for a particular aspect of your project. They can bring valuable insights and specialized knowledge to the table.

Short-Term Commitment 

Freelance product development can be a great fit for projects with limited scopes or short durations, as they allow you to engage their services only for the time needed without being bound to long-term contracts. That offers you the adaptability to modify your team as your project progresses.

Cons of Collaborating with Freelancers

Nonetheless, thriving startups and flourishing businesses may sometimes hesitate to hire software developers from a freelance company. But what causes this reluctance? The answer lies in the following drawbacks:

Hit-or-Miss Quality

While many freelancers deliver exceptional work, there can be variations in their commitment to quality. This inconsistency might stem from different experience levels, lack of oversight, or the absence of a structured quality assurance process. 

Reliability Issues

Freelancers can work on multiple projects simultaneously, affecting their ability to meet deadlines or remain consistently available. There’s also the risk of hiring a freelancer becoming unavailable due to personal reasons, leading to potential disruptions in your project.

Scalability Concerns

Freelancers are typically limited by their individual skill sets and availability. As your project grows or requires additional resources, scaling up quickly and efficiently may be challenging when relying solely on freelancing software.

No Maintenance and Support

Freelancers may not always offer ongoing maintenance and support after completing a project. That can leave you without assistance addressing future updates, bugs, or other issues that may arise post-deployment.

Privacy and Security Problems

Working with a freelance software engineer could expose your business to privacy and security risks. They may not have stringent security protocols in place, increasing the risk of data breaches or intellectual property theft.

Benefits of Hiring a Software Development Company

So, you’re prepared to transition your project from a group of freelancers to a professional software development company (or perhaps you’re considering starting with one). Brace yourself for a different experience! 

An app development agency serves as a comprehensive hub for all development needs. Comprising an entire team of developers, designers, and various experts, they can aid with every facet of the app creation journey.

Initially, you’ll encounter more bureaucracy as you must navigate NDAs, SLAs, and other agreements. But don’t fret – the workflow becomes smooth and predictable once the paperwork is signed. You can leave the management of individual contractors behind, lean on your Project Manager, and immerse yourself in the business side of your product.

Professional Expertise

Software development agencies have teams of experienced professionals specializing in various product development aspects. They can offer comprehensive skills and expertise, ensuring your project is handled by knowledgeable and capable individuals. In contrast to a freelance developer, a software development agency can nurture your product or service from conception to release.

Dedicated Involvement

Software programming companies typically work on projects with a full-time commitment, which means they can dedicate their resources and attention to your project. This full-time engagement often translates to faster development time and more focused project management.

Smooth Team Scalability

As your project grows or requires additional resources, agencies can easily scale their teams to meet your needs. They have access to a larger talent pool, making it easier to expand and adapt as your project evolves.

Quality Assurance Availability 

Software development agencies typically implement well-defined quality assurance processes, guaranteeing that your software undergoes rigorous testing and adheres to high-quality standards. This emphasis on quality can lead to more robust software.

Maintenance and Support

Software companies often offer ongoing maintenance and support after the completion of a project. This means they can assist you with updates, bug fixes, and other issues that may arise post-deployment, providing you with peace of mind and continuous support.

Drawbacks of Working With a Software Agency 

However, it’s essential to remember that every silver lining has its cloud:

Higher cost

One downside of collaborating with an agency is the often heftier cost. Due to their operational expenses and the comprehensive services they provide, agencies typically charge higher rates than freelancers, which might be a hurdle for budget-conscious businesses.

Communication challenges

Another challenge when working with an agency is the potential for communication gaps. With multiple layers of management and various team members involved, ensuring clear, streamlined communication can be more difficult in offshore software development than with a single freelancer.

Limited flexibility

Software programming companies may not always offer the same level of flexibility as freelancers. Their structured processes, larger teams, and multiple ongoing projects sometimes result in less adaptability regarding work hours or swift adjustments to project requirements.

It’s essential to acknowledge that each project is unique and requires thoughtful consideration of vendor selection. While we’ve shared insights into the pros and cons of working with software development companies and freelancers, the ultimate decision should align with your business objectives and project requirements.

Freelancers vs. Agencies (Comparison Table)

CostTypically lower ratesGenerally higher rates
FlexibilityGreater flexibility in work hoursMore structured approach
CommunicationDirect and personal communicationPotential for communication gaps
ExpertiseSpecialized skills in specific areasA broad range of skills and resources
ScalabilityLimited scalabilitySmooth team scalability
Quality AssuranceIt may vary depending on individualMore likely to have a structured QA process
MaintenanceOften not providedOngoing support and maintenance are available
CommitmentIdeal for smaller, specialized projectsSuitable for complex, multi-phase projects

Choosing the Right Option for Your Project

Let’s look at an example. Imagine you kickstarting a venture called “GreenBazaar,” an online marketplace dedicated to sustainable and eco-conscious products. You’ve laid out your business plan and have a clear vision for your platform. Now, it’s time to decide whether to work with freelancers or an agency for your software development needs.

Freelance Company vs. Software Agency

Scenario 1: Freelancer app developer

You need a custom website design that stands out and a mobile app for Android and iOS. You hire Maria, a freelance web designer who creates stunning website designs. Then you bring Alex, a specialized iOS developer, and Priya, an Android developer, to make your mobile apps. You enjoy the cost savings and direct communication with each freelancer-developer and take on the responsibility of coordinating the efforts of all freelancers and managing the project timeline. 

However, you may notice that your freelancers tend to finish the project quickly to move on to the next one and maximize their income. This leaves you alone with your new software once the project is completed, requiring you to seek out additional resources and support. It’s important to carefully consider the long-term implications of this approach and weigh it against the benefits of working with a dedicated team from a software development agency.

Scenario 2: Software development company

Instead of working with freelancers, you choose to hire a software development company. You can expect a different approach to achieving your goals. It is more valuable for  software development contractors to establish long-term relationships with their clients. 

As a result, a software company prioritizes the quality of its products and strives to be helpful in any way possible. While the cost is higher, a vendor ensures a cohesive approach and handles project management, freeing you to focus on other aspects of your business. Team expertise across various fields enables them to suggest valuable improvements to your platform, and you get exceptional results.

This starkly contrasts with freelancers who may prefer completing projects quickly to move on to the next job. In our opinion, this difference in approach is one of the crucial factors to consider when deciding between working with a freelancer or a development firm.

Thus, keeping the above points in mind, we can assertively declare that you can:

Opt for Freelancers when:

  • Tackling niche projects requiring specialized skills
  • Seeking cost-effective solutions for smaller budgets
  • Desiring direct and personalized communication
  • Navigating tight deadlines or flexible timelines
  • Engaging in short-term, focused collaborations

Choose an Agency when:

  • Addressing complex, multi-phase projects
  • Requiring a wide-ranging array of skills and resources.
  • Prioritizing quality assurance and structured processes
  • Seeking ongoing maintenance and support services
  • Valuing long-term partnerships and full-time engagement

Tip: If you believe a single individual can tackle your project, consider contacting a reputable and reliable company to staff you with a specialist. This way, you’ll gain access to an experienced professional who has handled an array of diverse projects.

Bottom Line

In conclusion, opting for a software development company instead of freelancers provides tons of benefits that can greatly impact your project’s success. By selecting a vendor like Relevant Software, you’ll enjoy the following advantages of IT outsourcing:

  • Comprehensive expertise: We boast a team of skilled professionals with diverse backgrounds, ensuring your project benefits from well-rounded experience and knowledge.
  • Seamless collaboration: With a dedicated team, Relevant streamlines communication, and coordination, promoting efficient project delivery.
  • Quality assurance: Our structured processes and commitment to high standards guarantee top-notch quality in every project.
  • Scalability and adaptability: Relevant’s agile approach makes it easy for your team to scale and adapt to the changing needs of your business.
  • Long-term support: Unlike freelancers, Relevant offers ongoing maintenance and support, ensuring your software stays up-to-date and functions optimally.

You have two distinct collaboration options with us:

  • Dedicated team: In this approach, you engage a complete team to develop your application from inception to completion.
  • Staff augmentation: This option allows you to hire a single developer to support your development process. It’s best suited for expanding your existing team or enhancing current applications.

Ready to elevate your software development journey? It’s time to experience the difference that Relevant can make. Contact us, and let’s collaborate to transform your innovative ideas into reality.

Tags: remote teams

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CEO at Relevant
My company has helped hundreds of companies scale engineering teams and build software products from scratch. Let's connect.

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