Eric Ries intimated in "Lean Startup" that nobody would steal our ideas, but I have concerns with an external agency or developers having possession of source code that would be the core of our business. Is this an unfounded fear? When funding permits, I would like to explore having an in-house development team, but quality agencies and developers seem to be available to hire in abundance. If my startup is bringing in revenue and profiting, is it unusual to continue a working relationship by outsourcing development to a third party? I'm thinking in the most economical sense, that this is sensible, however there are certainly other concerns to consider.

The security concerns should not be your main focus. It's getting the thing to work. I have seen countless times agencies overpromise and underdeliver. The contract needs to be structured in a way to prevent them wasting months of your time promising a product they can not deliver. The other main point to remember, is that likely you will need to hire full time, in house, developers to transition the software if you start to get traction. Most of the times agencies build code which does not scale well. Usually this is due to a tradeoff between speed of development (getting the software to you) and efficient, well architected code.

My advice, whatever it's worth is if you can afford it, build it in house from the start. You will most likely end up rewriting the code once you bring in a CTO. This has happened to almost everyone I know who has worked with an agency.
If you can't afford it, get as many references as you can from completed projects, structure the contract in a way to prevent garbage code, and think through your software from the start to prevent feature creep, agencies hate this, and will make your final code less efficient if you keep springing new features as the build progresses.

Answered 9 years ago

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