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As an AI agency, we’re actually THRILLED when clients want to hire out a team to run the product we’ve partnered with them on.
I know, this sounds counterintuitive. But as soon as clients are ready to commit real full-time dollars to our projects, that’s how we know it’s a successful partnership.
Unfortunately, we’ve seen this go south too many times. Common things like:
Don’t make these mistakes.
Here are some hidden costs of transitioning your product to completely in-house development - and how you can avoid them.
The number one reason the transition to in-house development fails can be summed up in one word: communication.
There’s a huge misconception that agencies don’t want to lose the project, so they won’t help the company make the transition a success.
Nothing could be further from the truth.
“I’ve been working on this project for 5 and a half years. It’s like a child to me. I want to see its success, no matter who’s working on it.” says Alex Koba, Mobile Team Lead at NineTwoThree AI Studio.
When there’s that mismatch, there’s little warning or communication. Hiring decisions are made without the expertise of the agency, leading to poor fits. Knowledge sharing is brief, and there’s not enough time to give full context.
In short, it’s a recipe for product disaster.
It really depends on how you define “cheaper.”
It’s almost always possible to find a lower bidder for a project. Someone who will promise to do the work for a lower price, with fewer employees, or in a shorter time.
While you might be paying a lower price and improving your costs, you’ll likely pay for it elsewhere. It could be lost revenue and customers due to poor quality, or lost brand trust as features take longer and longer to ship, with more bugs.
So, cheaper in dollars? Sometimes.
Cheaper in cost to the project? Almost never.
Actually, if you really think about it, it is.
But you can’t just hire any engineer or data scientist to work on your project. That is, if you want it to succeed.
You have to consider experience in the technologies you’re working with, relevant years of work experience, and past projects - all in the context of the state of your current product.
Plus, a competent agency (like NineTwoThree AI Studio) won’t just have one engineer working on the project. They’ll have people who contribute from DevOps, UX, Product, QA, architects…all completely different skillsets you’d need to look for.
And more. There’s so much more to software development than writing code.
It’s not as simple as hiring a programmer off UpWork.
The right agencies will be thrilled you want to hire for your product.
It’s a sign of the ultimate success for any agency - creating a successful product for a customer. So successful there’s significant investment.
Seriously, we understand that there is a natural end date to engagements.
Our goal is always to make that end date the day we hand all context off to the new, internal team.
Hiring is one of the hardest problems for any organization. It’s no different here.
Let’s take software engineering, for example.
Not all software engineers are created equal. An incredible frontend engineer can be a terrible API developer. A rockstar full-stack engineer might not make the leap to iOS development.
Unfortunately, lots of teams find this out too late.
If you don’t ask the right questions during the interview process, you’ll end up with hires who are in over their head, not putting in the effort, or worst of all, a step backward for the product.
And so, you have to figure this out for hiring an engineer. Then do the same process for the product manager. And designer.
If the chance of a bad hire is 40% for ONE role, it compounds for each successive hire you make. And the odds there’s one bad hire in your new team is quite high…if you don’t de-risk the process.
Let’s say you’ve replaced 2 engineers with new, in-house hires.
Now all of a sudden, you’re faced with hiring a full-time DevOps guy to do the 25 monthly hours of work the agency guy was doing. Important work to the project, but not a full-time employee’s worth.
Will you trust a freelancer with keys to your infrastructure and code repositories?
And will you keep them motivated and engaged with 25 hours of work per month?
Keeping the agency in the dark means they will have less warning for knowledge transfer.
Training the new team on the state of the project, the codebase, the history…it’s all a critical part of successfully moving a project in-house.
If you skip this step, or give too little time, you’re opening the doors to failure.
Let’s say you’re trying to replace the agency’s part-time software architect. During interviews, they will find out that the job doesn’t have a full-time position worth of architect work.
So naturally, they’ll assume that means picking up the slack for other tasks they don’t sign up for. Coding, design, etc.
Top talent will pass on this "unique opportunity".
Also, let's not forget that people flourish in organizations where they can learn from others.
If they are the only designer/engineer/product or project manager, they might not be interested if there’s no one to learn from.
Great agencies will keep track of how long it takes to ship features, and share those metrics with you during their updates. Pay close attention to them.
Because you’ll want to make sure your new team is shipping at similar velocity.
Now, there are a few reasons this wouldn’t be true at first. There’s a natural learning and ramp-up period for any project. PMs will familiarize themselves with the backlog, engineers with the codebase, etc.
But if, after 3, 4, 5 months, you’re still seeing dev time slow, and features take longer to ship, that’s a problem.
Similarly, if the team sets deadlines and consistently misses them, it could be a sign they’re not as familiar with the codebase as they promised.
Every feature and product will have natural blind spots. If the team isn’t highlighting them during estimating a feature, and then missing a deadline, it could be a sign they are struggling to keep up with the quality bar the agency set.
This is something you can check in with your new team members during your check-in meetings, though.
Frequent bugs. App crashes. New features not working.
All telltale signs of a lowered quality bar, and a team that doesn’t understand a codebase.
Again, pay close attention to your agency’s communications when you are working with them. They will maintain a list of bugs and keep you updated on them.
Then, if you transfer to an in-house team and see performance dips, you know code quality is suffering.
There are generally three reasons employees don’t perform well.
Knowledge comes from learning. If this engineer is the only mobile developer in your organization, there is no one to challenge their approach and ideas. They have no one to learn from.
You might not realize this is a problem until they’re already out the door.
At NineTwoThree AI Studio, we have a systematic way of solving this. We hold frequent knowledge sharing sessions, where engineers share their experience gained working on our diverse portfolio of projects. They are all learning from each other, and getting feedback on their decisions.
If you hire one engineer, who's going to push them forward?
People are hardwired to do the easy thing. We can't overstate how often we work with organizations where the only engineer they have kept using technologies they learned 20 years ago.
Our Team Leads set goals to keep teammates engaged in continuous learning. We constantly try to expand the portfolio of skills we have on our team.
When you're the only person in the company with key knowledge and skills, what keeps you motivated?
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You may successfully hire them short term if you check one of those boxes.
But they will likely leave after 1-2 years if you don't fulfill at least 2 of those things, consistently.
Let’s say you DO find an incredible developer, who’s willing to go the extra mile and cover everything the agency was doing, complete solo. They’re motivated, energetic, go to meetups, the whole deal.
They’re now the sole engineer on your team.
They come to you, 2 weeks after joining, and claim that the entire app codebase is trash and has to be re-written in "Rust", because "Rust is best, Rust is the future".
They’ll say things like:
We've seen this so many times.
6 months later, the 4 week project is over.
Your solution is finally implemented in Rust, and the engineer is finally happy. Then, they quit because it's “too boring here” and they finally got their dream job offer from FAANG.
You spent (really, wasted) 6 months to get 0 new features or functionality.
And now it's more expensive to find a replacement because you now have a codebase that nobody can support. You can't find talent who code in Rust.
The cherry on top? They left no documentation, because "good code is best documentation."
Rockstar developers can be even more toxic to your team than less “talented” hires.
Asking for resources like docs and URLs when they’ve already been provided can be a sign the team isn’t yet ready to take on the project by themselves.
Churn is expensive.
You'll have to train, retain, motivate, develop, equip and take care of your new in-house team, and that’s something many companies don't think about.
Successful collaborations with an agency might have a natural end date.
In any case, do these things to set yourself up for success.
In case it wasn’t clear by now, the best agencies are bought into your product’s success.
The best way for them to help your product succeed is to be a partner in the succession plan.
If the agency has more time to prepare, a few things can happen:
There’s always going to be something you wished you’d asked. Giving advance warning helps make that happen.
Who better to interview and vet the new team than the current team?
They can help find experts, with the right experience and background, for the right price.
They also know how to ask the right questions. They can help you hire for culture fit, find high-agency team members, and set the project up for success.
We’ve worked with dozens of enterprise organizations, created successful products, and hand-picked our in-house replacements.
If you have an idea for the next great AI thing…let’s chat.
