I am about to create my first tech startup, it is a simple project that could be entirely outsourced. My fear is based primarily on the future of the startup. If the project takes hold, how to deal with the transition from external to new hired engineers? How to handle this situation?
First, congratulations on your new endeavor. You're about to enter a brave new world. And while you will worry about every detail and make a few mistakes, just promise yourself to learn from them.
That being said, as a startup the reality is that you will be strapped for cash and will reply on outsourced contractors to get you up and running until you have a need for dedicated, full-time personnel. Until then, your main focus should be on finding great outsourced partners. Don't go for cheap. Go for quality and go with a partner you can trust, collaborate with and who understands the end goal.
All outside firms or freelancers know that one day the gig will end so don't just ask about what they will do for your know, ask how they will support and transition once the gig is up. Good partners will be able to do this seamlessly for you. (I now have transition down to a science!)
Also, make sure there's some overlap between the end of the engagement with the outsourced firm/freelancer and the new hire. This way you can ensure your new hire has access to the people who did the previous work and because they are being paid to transition, you'll get the best out of the firm too.
Hope that helps you. Good luck with your new venture!