Just today, I twittered a link to an insightful blog post, “Here’s the Deadliest Catch: Hiring an Agency to Build Your Startup”.  The title is largely self-explanatory, and I may blog my own riff on it at a later date.  Digg is often raised as a counter-example to outsourcing development of a startup, with version one developed for $200.  So how do you decide what the right balance is for you?

Ruby on Rails has this concept of “scaffolding“, which makes it trivial to get a simple web application running to perform create/read/update/delete operations on a simple business object.  So if you wanted to build a basic address book, Rails could basically create that application with a one line scaffold generate script.  It produces a simple web interface, and handles all of the database calls for you.  Java code to accomplish the same task is typically more verbose, but even if you wrote it from scratch in any language, it would be fairly intuitive for an experienced developer with no knowledge of your business to immediately understand the app and how to extend and maintain it.

At some point, almost any app becomes more complex.  The current version of Digg could not be developed for $200, and I dare say it would be foolish for someone like Digg to build an application of its current complexity completely contracted out.

I’ve been in startups all along the continuum, and made transitions between different mixes of internal versus external product development and infrastructure.  My current opinion is to outsource the scaffolding.  If you’re deploying a java/tomcat/MySQL app on a plain vanilla linux distribution, you can probably have a contract sys admin put that together for you – any other competent admin can look at how it’s configured and fix your problems.  When you start depending on all sorts of custom extensions, configurations, replication, huge scale, and/or DB sharding, it’s probably time to hire some admins that can own that custom knowledge you depend on.

The same thing goes for product development.  Are you building out a marketing web site?  An app that could be built with Rails scaffolding?  Contract it out – good contractors will realize how easy it is and crank it out for cheap (though maybe more than $200).  Most capable software developers you would hire or have hired don’t want to build or maintain that stuff anyhow.  Save internal development for the custom, proprietary stuff you need to spend time on, the meat and potatoes code that differentiates your application from everybody else’s.  The stuff that will take even a good developer more than a couple of hours to really comprehend.  Start throwing the switch to internal resources when it starts to get complicated – you’ll be much happier.  Trying to insource knowledge of a complex application that’s already been written by someone else is doable, but quite a challenge.