Why Startups Should Hire a Product Agency to Build the MVP

One of the first major decisions facing software startups is how to assemble a team to design and build their MVP.

For over two decades, we've served as this team for many early-stage startups. Here is the advice we give prospective clients about why a product agency can be a good fit.

Ready-for-MVP Startup Needs

At this stage, startups have one overriding goal: ship a product in 6 to 12 months.

They already have a solid foundational strategy, and have decided to bring the product to market. They also have a meaningful seed round or self-funding — enough to contemplate hiring a small team or a product agency — but generally are pre-Series A.

Now they need to show real progress using their early funding, and start building the case for their next, bigger round of funding. The surest path to Series A is a live, working product that has real customers and early traction.

But at this stage, many startups have a core problem: they lack the full team that's needed to ship a product in that timeframe.

Founders have three broad approaches to solving the problem:

1. Hire a full team
2. Hire individual freelancers to assemble a temporary full team
3. Hire a product agency as a temporary full team

Let's go through each approach to see why hiring a product agency can be the best solution for building an MVP.

Approach 1: Hire a Full Team

Many startups' first inclination is to immediately hire a full team. In some cases this is the best decision. For example, if you've worked at multiple startups and have a deep network that you can hire from, quickly and with confidence.

But if you don't have that network, this solution immediately creates a new set of problems:

Time Risks

First, hiring activities will use up a non-trivial portion of the 6-to-12-month launch window, leaving that much less time for building and shipping.

• Time to Hire: In the best of circumstances, hiring for any role takes time. When starting from scratch and hiring multiple roles, that time inevitably compounds.

• Time to Get Going: Even if you can hire all the roles in a reasonable timeframe, it takes time for them to onboard, get started, and gel as a team.

• Operations Time: There's a surprising amount of overhead and admin time involved in getting to your first ~5 employees. Not just hiring the team, but figuring out compensation, benefits, and equity offers; setting up health care and retirement plans; and other aspects of running a business.

Hiring Risks

Second, choosing to hire a full team means you need an additional core competency: "being great at hiring people." This carries its own risks.

• Hiring Competency: If hiring isn't a core competency, you're rolling the dice with little room for error. Will you hire the right individuals? Will they work well together as a team? Will they jump ship after a few months?

• Role Risk: Depending on the product scope, an MVP team may require the equivalent of 2 to 6 full-time people. However, the actual need is often spread across 5 to 10 distinct roles/skills.

  • For example, you might have a technical challenge that needs specific expertise but doesn't warrant a full-time person. Do you hire an additional developer just for that need?

  • Or you might need a mix of strategic and delivery-focused product management. How do you hire for the exact mix?

  • Or you might hire a product-savvy UX/UI designer, but they don't have the brand/aesthetic design chops needed for a stellar launch. How do you fill that gap?

Approach 2: Hire freelancers

Time Risks

This approach has fewer Time Risks than Approach 1.

• Time to Hire can be faster, especially if you use a service like Toptal to assemble a full team. But it can still be slow if you're directly sourcing individual freelancers.

• Time to Get Going and Operations Time are much lower with this approach. However, some overhead time is still needed for the freelancers to get to know each other, establish processes and roles, etc.

Hiring Risks

This approach has equivalent Hiring Risks.

• Directly sourcing individual freelancers has at least equal Hiring Competency Risk — and potentially increased risk, as freelance hiring is a bit of a distinct sub-competency.

• Role Risk is medium to high. Even with a hiring service, it can be hard to know upfront exactly which roles and skills you'll need. Also, these role/skill nuances can be hard to suss out in resumes.

• The freelance approach also introduces another hiring risk: Stinginess Risk — i.e., a temptation to go cheap. We’ve seen too many entrepreneurs waste precious early money through misguided attempts to “save” money by hiring cheaper freelancers.

Approach 3: Hire a product agency

As long as you choose an experienced agency like Viget or our peers, this approach reduces all of the above risks, giving you the best chance to deliver a high-quality MVP in 6 to 12 months.

Time Advantages

• Time to Hire: You can hire a product agency as quickly as you can find and vet them, and start as soon as their schedule allows. While agency due diligence takes some time, it’s often more efficient than hiring individual freelancers. First, entrepreneurs typically can get agency referrals from their network quickly. Second, you don’t need to spend time sourcing and interviewing multiple candidates across multiple roles — you just source and interview one agency representing all roles.

• Time to Get Going: The agency onboards immediately onto the project.

• Operations Time: An agency lets you focus on entrepreneuring and building the product, so you can get an operations skeleton in place at your own pace.

Hiring Advantages

• Hiring Competency: Experienced product agencies are a shortcut to finding talented teams quickly. While "being great at hiring people" may not be your core competency yet, it is one of ours after nearly 25 years in business.

• Role Flexibility: A product agency has the breadth and depth of roles to assemble just the right team, even if a given role is only needed part-time.

• Founder Gaps: If you lack a technical or product co-founder, a product agency can also provide temporary technical, product, or design leadership. (Though if you have this gap, it should be at the top of your hiring list.)

• Staged Start: A product agency team can ramp up in stages. For example, we're currently working with a startup on a video game software platform for creating virtual economies — a complex product that warranted starting with a smaller team focusing on solution discovery, before ramping up the full design and build team.

Case Study: From Viget MVP Team to $20M Series A

After a seed-stage investment, SpectrumAi teamed up with Viget to build and launch Twyll, a session management tool and data store for providers of Applied Behavior Analysis (ABA) autism therapy.

While our team of product managers, designers, and engineers designed and built the MVP, the SpectrumAi founding team could focus on vision, strategy, validation, and other aspects of the business. This let them strategically sequence early hires, for example bringing on an in-house product manager early while waiting until later to hire engineers.

This partnership also highlighted the product agency approach’s Role Flexibility. Therapy session recording is a key Twyll feature, to add transparency and open the door to future data analysis and machine learning-based observations. We were able to flex up dedicated engineers to spike on, architect, and ultimately build the recording features in WebRTC, Go, GStreamer, and AWS Kinesis Video, while other engineers focused on the unrelated back-end and front-end implementations.

The result: An MVP pilot launch in 6 months, a full launch 6 months later — and a $20 million Series A raise shortly after.

When you consider the typical cost of an agency-built MVP, that’s a pretty good return on investment — with far fewer risks and headaches along the way.

If you’re a startup founder trying to figure out which approach is best for you, get in touch. We’d love to help you think through the options.