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What’s new in ‘offshoring’ that SaaS startups are suddenly showing a huge interest in it?

Offshoring has always remained a debatable topic amongst businesses across the world. Whether a business angle of cost-effectiveness or political angle of decreasing local job opportunities, any issue has not bogged down the number of organizations ready to offshore.

"The market size for global outsourcing reached $92.5 billion before the pandemic."

The trend of offshoring especially can be noticed in the SaaS industry! Before we get down to Offshoring, let us understand a bit about SaaS and its stages.


Understanding Software-as-a-Service

The SaaS business model enables the vendors to use cloud-based software by the means of subscription. The pricing model is usually pay-per-user or pay-per-month.

The SaaS lets businesses can focus on their core activities rather than managing and tracking various business functions manually. As it is a cloud-based technology, there is a minimum requirement of infrastructure and can be accessed by anyone, anytime. Thus, SaaS is cost-effective and simple to deploy.

"A SaaS company typically goes through four stages – product development, initial traction, rapid growth/scaling up, stability."

Now let us see how offshoring aids every stage of a startup.

Product Development Stage

At this stage, usually, a startup has received Seed funding. The priority of a SaaS startup is to come up with a minimum viable product. It is of utmost importance to have an A-team to build the product within the limited budget.

How does offshoring help at this stage?

  • Gives access to high-quality talent.

  • It helps to minimize the expenditure on the salaries.

  • Speeds up the product development with two timezones


Initial Traction Stage

Startups have raised series A or series B rounds by now. The MVP is ready, and the focus is on improving the product as per the market/customer feedback. Startups are acquiring new customers and their users need support at various points in time while using the new product.

Though companies have the budget to set up development and tech support teams onsite, they cannot cover round-the-clock development and support.

How does offshoring help at this stage?

  • Offshoring to the strategic timezone can enable follow-the-sun model, which means faster implementation of customer feedback.

  • A country with the strategic timezone to offshore covers customer support around-the-clock.


Rapid growth/Scaling up stage

Startups have a steadily increasing stream of customers and revenue at this point. The priorities at this stage are to acquire talent in a time-bound manner and retain them. Setting up processes for teams and culture for the office also become significant factors to scale up rapidly with the growing business. It is also important from a business point of view to increase the RoI. While doing this, there are greater chances of shifting your focus from the core business.

How does offshoring help at this stage?

  • Offshoring enables to access the right talent faster with offshoring partner taking care of recruitment and management processes.

  • Startups usually go with offshore outsourcing that is setting up their team in a foreign country with a third-party help, which gives full control over the team .

  • Helps in inculcating the desired culture across the teams with help of an offshoring partner.

  • It increases RoI as offshoring naturally is a cost-effective solution.


Stability stage

The SaaS startup is accepted in the market with year-on-year revenue growth. This stage is where the organization wants to stabilize and think from a future point of view. How to run a profitable business in the long term? The other question is how to outgrow the market competition.

How does offshoring help at this stage?

At this stage, the natural step is to set up an offshore Development Centre, full-fledged operations in a foreign country. If a startup is already into offshoring involving a third party, then it normally tries to get the full ownership of the offshore team (following the Build-Operate-Transfer model).

Long term benefit

  • Saves up to 50% of infrastructure, operational and human resource cost, increases RoI.

  • Acquire quality talent cost-affordably.

  • Offers flexibility to scale up or down the operations as per the requirement.

  • Helps to enter global market easily when offshoring country and target market region is same.

  • Extend Global customer support cost-effectively.

  • Enable round the clock development and deployment, increasing the productivity.


"Offshoring is a cost-effective solution! But apart from that, it supports SaaS startups at every phase of business, offering the right benefits at the time of need. This is the reason why offshoring is so popular amongst SaaS startups."


About Braves

Braves helps global technology companies incubate their dedicated offshore development teams in India. The team in India is an extension of the onshore team and works collaboratively to achieve their goals.

With 17+ years of experience in technology recruitment in the US and India, we know how to build a team of high performers. Our fully managed operations model along with people-driven policies has helped clients scale their teams with a high employee retention rate of 85%.

Get in touch with us to find out more.


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