Outsourcing Apps: The Next Big Opportunity?


VC firm Andreessen Horowitz recently invested $10 million in Gigster, which outsources app development. Rather than hire an in-house team (or cobble together a group of freelancers) to build software, Gigster takes your product spec for an app and builds it, using its own collection of project managers and software developers.

Gigster relies on 1,490 highly qualified tech pros, currently working on 271 active projects. While the company boasts low costs respective to the quality of its developers (and finished product), the app-outsourcing process can still cost upwards of $30,000: Not that expensive by enterprise standards, but potentially budget-busting for small firms that need to get a product to market.

As summarized by TechCrunch, this isn’t the first time that Andreessen Horowitz has invested in a company that outsources software development. Its other investments include Toptal, a startup that pairs developers and designers with firms in need of app and Website work.

For developers with the right qualifications—especially those who’d rather freelance than work a job with traditional hours—the rise of “app outsourcers” is potentially a very good thing. Who wouldn’t want to work on a constant rotation of interesting projects?

A rise in app outsourcing would also dovetail neatly with a general increase in the number of Americans earning money through freelancing, rather than a full-time position.

Those developers and designers new to freelancing, however, should note that with increased flexibility comes a good deal of added responsibility. For example, independent tech contractors need to take care of everything from their own healthcare coverage to E & O insurance. There’s also a question of stability; a lot of developers pursue full-time work because they hate the uncertainty that comes with freelancing.

Firms such as Gigster and Toptal aren’t the first to handle app-outsourcing needs; third-party development firms have been doing so for many years, often for larger companies. The difference is that, by making top-quality developers available for a flat (if not reasonable) price, these new firms may broaden the practice to more entities in need of software. And if that happens, the need for developers could pick up—but interested developers would do well to examine the full ramifications of freelancing, first.