How to Build a Startup Development Team?

4213 Updated 09.23.2022
Yuriy Matviyuk

Development Tech Lead


Table of contents

You have decided to present a new product or service to the world. You have a solid idea, vision, precise positioning, first few leads, and even a budget. Now, what remains is to hire a startup development team and create a product.

Building a software team is a rather challenging process. In our new article, we look at the dos and don’ts when hiring a startup development team. We will also tell you what gross mistakes in the selection of people and the organization of their work can ruin your undertaking. You will learn what problems can solve a good startup development team, how much a startup development team costs, and much more.

What is a startup development team?

Startup development team is a group of specialists that can put your startup idea into action. Startup development team usually consists of:

  • Project manager
  • Business analyst
  • Team leads (design and development)
  • UX designer
  • UI designer
  • Frontend developer
  • Backend developer
  • DevOps
  • QA engineer

The startup development team includes specialists from all areas of full-cycle product development.

In-house or Outsource startup development team?

Many startups usually have a tough choice to make. Most startup owners do not know which outsourcing or in-house team is better. Some startups think that building a software development team from scratch is an easy task. They are afraid to hire an outsourcing team, thinking about gaps with communication, deadlines, payments, etc. However, today it is all a myth. 

According to Deloitte’s Global Outsourcing Survey, 72% of companies prefer product development outsourcing over in-house development. And here are the reasons why companies trust outsourcing teams more:

  • Cost-effective product development. According to Quartz reports, 46% of startups fail because they run out of money. However, this may not affect your company if you outsource a startup development team. You will not spend money on building a software team from scratch, additional offices for the team, vacations, sick days, etc. You will only need to pay for the work done. Moreover, the rates of startup development teams in Eastern Europe, for example, are much more reasonable than their American counterparts. Hiring a team from Ukraine or Poland will cost you two or even three times cheaper than hiring specialists from the United States.
  • Large talent pool. By using outsourcing services, you will get access to a huge number of experts and specialists from different fields. Most of the seasoned professionals in the US are working with big companies and tech giants. Honestly, you are unlikely to be able to lure them into your project. Lots of companies spend years building a software development team that will meet all their needs. The countries of Eastern Europe (Ukraine, Poland, Belarus) pay great attention to the education of IT specialists. In Eastern Europe, there are between 4,000 and 6,000 software outsourcing companies. has a list of over 4,650 companies that offer IT outsourcing services. Therefore, finding the right and reliable partner for your project will not be difficult for you. 
  • High productivity and saving time. By hiring an outsourcing startup development team, you will receive a formed team of specialists who do not need to be trained. You also won’t have to waste time on project management or any HR activities. You will be able to focus on the main task – product creation.
  • Flexibility. Fickleness is very common in startups. It is unlikely that an in-house team will be able to quickly switch to a new tech stack and change the vector of work. However, outsourcing teams are very flexible and can move from project to project very quickly.

As we can see, you can rely on outsourcing startup development teams. After all, companies like Slack, Skype, and many others built their products with the help of outsourcing teams instead of building a software development team in-house. 

Startup development team roles

Earlier, we have already considered who the members of the startup development team are. However, let’s highlight the leading roles.

Product manager

A product manager is in charge of a product’s business layer. It may include details about functionality, user experience, competitive analysis, business model, content, etc.

During the development of the product, many questions and situations related to the product’s behavior will definitely arise. Therefore, so that the development of the product is not postponed, it is necessary to solve the problems that have arisen immediately.

Project manager 

Do not confuse this role with the product manager. The main task of the project manager is to ensure that product development is completed on time according to the project plan.

The project manager is also the liaison between the startup development team and the client. The manager should regularly communicate with the client to approve the deadlines, discuss the progress of the project, and resolve issues related to the product creation.

UX/UI designer

A designer is responsible for the outer shell of the product and the user experience. Everything that the user sees in the first seconds of using the product is done by the designer. This role is extremely important in a startup development team. Therefore, when hiring a team, it is worth paying enough attention to it.

Frontend and backend developers

The main task of a frontend developer is to make a visual front that displays a screen that allows clients to interact with the software.

A backend developer can have many responsibilities, from database creation and integration to security, backup and recovery technologies. Backend developers create the brain of the application. They use a variety of technologies to encode the underlying computational logic of information systems, specific software or websites.


QA is responsible for “breaking” the product and finding defects. Before launching the product, the person in this role must identify as many defects in the product as possible. The more QA reveals at this stage, the fewer of them will be after the release.

What problems can solve a good startup development team?

A good startup development team can solve a lot of product creation problems. Firstly, by hiring a startup development team, you will get a group of specialists who can immediately start the full cycle of creating a new product. You will not need to look for additional specialists since all the experts you need for your project will already be in the team.

Secondly, a good startup development team most likely has extensive experience working with different industries. Therefore, in the work process, it will be able to tell you what functionality, for example, is better to add, which design is more suitable, how to build the logic in the product, etc.

Thirdly, by working with a good startup development team, you will not need to worry about deadlines. Good teams, in most cases, value their time and the client’s time, so they will try to complete everything on time and with high quality.

How to Build a Startup Development Team: Step-by-Step

Building a software team is a challenging process, especially for startups. To better understand how to organize this process, the Northell team has prepared a short guide on building a software development team. Let’s take a look at the basic steps in building a software team.

Step 1. Define your goals and budget

The first thing you need to do is define your goals and be ready to communicate them to the future team. Break down your main goal into smaller ones so that it’s easier to plan workflows and set deadlines later. Define the main problem that you want to solve with the help of your future product. 

You should also think about the budget for your project and for building a software development team. Allocate the money approximately for each of the processes so that you do not stop the development of the product halfway due to a lack of money in the future.

We recommend using the following categories as a basis:

  • Revenue;
  • Number of users of your product.

Step 2. Turn an idea into clear product requirements and descriptions

Before building a software team, you should document your idea. Describe in detail how you see your future product, what should be in it and what should not. Determine your main product requirements. For example, describe what kind of design and functionality you want the product to have.

This documentation will help your future startup development team better understand your idea and create exactly what you have in mind. Usually, the design requirements (specifications) document includes the following things:

  • Full project overview;
  • Main needs and goals;
  • Target audience;
  • Functional requirements and desired set of features;
  • Aesthetic aspects;
  • Non-functional details;
  • Recommendation and prohibitions;
  • Questions.

More about how to write the design specification read in our article: How To Write The Design Specification? [Quick Guide].

Step 3. Start your Team Hiring [Northell recommendations]

Now you can start searching for startup development teams. We have compiled a list of the main places where you can find and evaluate potential teams:

LinkedIn. On this social network, you can find many companies that provide startup development teams and their representatives. You will find information about the team’s experience, their work areas, company websites, etc. Here, companies present the projects they have worked on, describing what challenges they faced, how they solved them, and their results. You will also find clients’ reviews with whom the team worked.

Behance. This site is created more for designers, but most of them work in a team where other specialists are working on a specific project. Here you can evaluate the design of the projects that the team has worked on.

Partners and colleagues. Ask your surroundings. Perhaps some of your partners or friends have had a good experience with a reliable startup development team and can connect you with it. Maybe they also know some tips for building a software development team and can share them with you. 

Google. Probably the easiest and fastest way to find a startup development team is to use the Google search engine. It will give you a large number of sites where you can view and rate teams. 

Step 4. Conduct an interview, summarize the facts

Once you have found a potential startup development team, you can start interviewing them. Our team has compiled a list of basic questions to ask when interviewing the team or its representative:

  • What’s your experience? How many years have you been working in the industry?
  • What projects have you worked on? What areas were these projects from?
  • What problems did you face in product development, and how did you solve them?
  • What were the results of the projects you worked on?
  • Have you had failed projects? What were the reasons for the failure?
  • What is your most successful project, in your opinion?
  • Is communication in the team well established?
  • How quickly do you solve problems that arise during product development?
  • How are you different from other startup development teams?
  • What is the key to your team’s success?

The more questions you ask a potential team, the better you will understand if you can work together. After conducting interviews, collect all the information received from the teams. Assess their portfolios, team size, and price. After that, choose the most suitable startup development team for your project according to all the criteria.

Step 5. Select the relevant team and sign the contract

Building a software team is a crucial process. When choosing a team, remember that the success of your product depends on it. After you select your team, sign the contract. That is the official underpinning of your cooperation. It is imperative to do this so that if any problems arise in the future, you can easily and quickly solve them and not lose money.

Step 6. Create tasks for Startup Development Team

After building a software team, write tasks for the team. A business analyst or project manager should do this. They should agree on sprints, create a list of all tasks, agree on deadlines, and so on. Good planning is always the key to success.

Step 7. Create a KPI and get started

The last step before getting started is setting up a KPI. KPI (Key Performance Indicator) is an indicator of success in a particular activity or in achieving specific goals. We can say that KPI is actually a quantitatively measurable indicator of achieved results.

The KPI system implies the integration of the global goals of the company and the personal goals of specific employees. Its implementation helps to achieve several goals:

  • Increase employee motivation and growth of key performance indicators of the company.
  • Build a clear system of near and far goals of the company to achieve them consistently.

It is better to start with clearly building the company’s goals in a hierarchical order and then divide them into near and far. The greatest attention should be paid to this point. Otherwise, everything further does not make sense. Spending a lot of money and directing employees’ efforts towards achieving non-priority goals is a disastrous strategy that will only bring negative results.

Building a hierarchy of goals is not a one-person, one-day job. The more information is collected and worked out, the more employees and heads of departments can speak on this issue, the more likely it is that the list of goals will correspond to the internal capabilities and needs of the company.

How to Build a Startup Development Team: Check the quality with this checklist

To check how well the startup development team is coping with its tasks, use our checklist:

✓ The team communicates with you regularly.

✓ At each meeting, the team shows progress for a separate product development stage.

✓ The team completes tasks according to your plan.

✓ Deadlines are met.

✓ The team corrects mistakes if any arise.

✓ The team makes changes to any process only after your consent.

✓ The team does not disseminate information about your project (if the NDA was signed).

✓ You have access to communication with every member of the team.

How much does a Startup development team cost?

It’s time to find out how much a startup development team costs. Let’s start with the fact that the price depends on many factors:

  • Country where the team is located
  • Experience
  • Complexity of your project
  • Team members expertise

If we are talking about a country, then the most popular region for hiring a startup development team is Eastern Europe, namely Ukraine. Ukraine offers experienced and qualified professionals at a reasonable price. 

By choosing this region to hire a team, you will not face a cultural or language barrier. 95% of IT specialists here know English and other foreign languages. The government provides opportunities to study IT professions, and the level of education in the country is quite high.

Also, popular regions for hiring startup development teams are Western Europe, South America and Asia. Let’s compare the approximate prices for individual product development stages across all regions:

Rough project costs

Rough project costs

How to Build a Startup development team: The main problems and challenges

The main challenges for startup development teams are:

  • Understanding the idea and essence of the project.
  • Cooperation with the client’s team.
  • Allocating sufficient time and resources for project research.
  • Proactive teamwork.
  • Integration into the client’s culture and industry.

How to Build a Startup development team: Typical mistakes at work

Building a software team is a long process. Many companies take years to build a reliable and strong team of professionals. Let’s take a look at the main mistakes startups make when building a software development team and working with it:

Lack of business expertise. In principle, anyone with a certain budget can create a startup. However, with no experience in a particular industry, a startup is more likely to fail.

Whether working on a project from a business perspective or choosing the right team composition, you should trust people with hands-on experience when it comes to such an important decision. Sometimes it is better to delegate responsibilities to a more experienced professional.

Lack of communication. Many startups face this problem. Due to the lack of communication, the startup development team will most likely begin to get confused in your project, and there will be difficulties in organizing the processes. The easiest way to solve this problem is to agree on regular meetings to discuss progress on tasks and all issues related to the project at the very beginning of work.

Lack of right methodology. In the absence of the right approach to work, you are likely to fail your startup. The correct sequence for all product development stages must be determined. By doing everything in order, you will be able to properly build the product development cycle, which will lead you to success.

Lack of KPI system. Without a system for evaluating the effectiveness of team members, it will be difficult for you to monitor your product development progress. We talked about the KPI system in more detail earlier. 

Lack of necessary team members. Earlier, we described what a startup development team should consist of. If even one team member is absent, for example, a business analyst or a QA engineer, you will not be able to build a good product. Why? Because each specialist in the team performs a vital function. The final product depends entirely on the work of each of the team members.

Lack of product discovery stage. Product discovery is one of the essential steps in building a product from scratch. At the first stages of work, it is necessary to understand the idea of ​​the business, the product’s primary goal, and how to monetize the product in the future.  

How to Build a Startup development team: How Northell Can Help You?

Why choose Northell

Why choose Northell


Northell team has a wealth of experience in building a software team for a specific project and also creating awesome solutions for startups.

We help startups create a product from scratch, support at every stage of development, and advise on all kinds of issues. Having got acquainted with your company and your project, we will help with the process of building a software development team according to your requirements and desires.

In two years, we have completed more than 155 projects for companies from 45 countries. Our software development teams have extensive expertise in:

  • UI/UX design
  • Web Development
  • Web & Mobile app design
  • MVP development
  • SaaS, eCommerce, E-learning platforms
  • Enterprise Portals
  • Custom Web App Development for businesses of any size

Our team showed great results and made Clutch’s Top 20 Product Designers & Developers and The Manifest’s Top 4 Product Design Team. Creating a project from scratch, we build a product that can convert up to 22% of relevant traffic.

In case you have any product ideas in mind, contact us! Our software development team will help you deliver your project on time and in the best possible way. You focus on the core business goals and we take care of the rest. 

More about our team you can read here: Northell software development team

How to Build a Startup development team: Summary

Building a software team is not an easy process. However, with the right strategy, you will be able to find and hire your dream team. If you follow our recommendations, you can bring your idea to life with the help of a professional team. 

If you already have an idea and are ready to start creating a product, contact us. We will gladly help you with all the product development processes.


What tools should be used for management?

For good management, we recommend using the following tools:

Shared calendars
The to-do list
Video-conferencing tools
Document platforms
Online chat tools
Work schedules

Which technology stack to choose?

The tech stack is uniquely selected for each project, but we recommend Node.js and React.

In which country are the best developers?

Ukraine is one of the best countries where experienced and skilled developers are located.

How to write the requirements for my project?

The answer to this question you will find in our article How To Write The Design Specification? [Quick Guide].
Article Rating Title

We Design & Develop World-Class Digital Products

Our team builds strong digital solutions that have a positive impact on organizations.

Northell Team Can Help You

Ready to start? We look forward to welcoming you!

    Subscribe to our newsletter

    Become a part of a community with more than
    2000 Entrepreneurs who want to create
    valuable products.