Where to look: founders who have shipped a product with the company, plus verified reviews on a site like Clutch. Shortlist three.
What to check: a live product they built, who will actually write your code, how they charge for changes and the work after launch, and whether the code and accounts will be in your company's name.
What to ask: the five questions below. Then start with a small paid piece of work before you sign for the whole build.
Choosing a Software Development Company at a Glance
| What to check | What good looks like | Red flag |
|---|---|---|
| Past work | A live product with real users you can try today | Only designs, screenshots or a pitch deck |
| Who writes the code | You meet the developer before you sign | Only a salesperson, and the team is "to be assigned" |
| Scope | They argue for a smaller first version | They accept every feature on your list |
| Change and after launch | A clear price for changes and for the work after launch | A new proposal every time something changes |
| How you see progress | Working software at least every week or two | Status reports and a big reveal at the end |
| Ownership | Code, hosting, domain and accounts in your company's name, assignment in writing | The code lives in their accounts until the final invoice |
Before you sign, ask every software development company these five questions:
- Question 1, "Who will write the code, and can I talk to them?" The person who sells you the project is rarely the one who builds it. You want to judge the builder.
- Question 2, "What would you cut from my plan?" A good company argues for less. One that agrees to everything is pricing a bigger project than you need.
- Question 3, "How do you price a change halfway through?" Your plan will change. The answer tells you whether that will cost a conversation or a new contract.
- Question 4, "What happens after launch, and what does it cost?" Fixes and new features after launch are most of the life of a product. Get the price before you sign.
- Question 5, "Whose name will the code and accounts be in?" The answer should be your company's, from the first day, with the assignment of the code written into the contract.
Want the work done without picking an agency?
A senior developer on subscription: $2,995 a month, as many requests as you like, each shipped within 2 business days, and your money back if the first 14 days don’t prove it.
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This guide is about choosing a company to build your software. If you would rather hire one person, see how to hire a software developer. For the first version of a new product, see MVP development services, and for a product that charges subscriptions, SaaS development services.
How to Choose a Software Development Company in 6 Steps
- 1
1. Decide what you are buying
A one-off project with a settled scope, or ongoing work on a product that will keep changing? The first suits an agency with a fixed quote. The second suits someone you can keep sending work to, without a new contract for every change. Most founders need the second and buy the first.
- 2
2. Write a one-page brief
Who the product is for, the one job it must do well, what already exists, and your budget and date. Companies give sharper answers to a short brief than to a long feature list, and you can compare them on the same page.
- 3
3. Build a shortlist of three
Start with referrals from founders who shipped with the company, then verified reviews. Three is enough to compare without spending weeks on calls.
- 4
4. Check their work and meet the builder
Use a live product they built. Talk to a past client. Then talk to the developer who would write your code, not just the account manager.
- 5
5. Compare how they charge, not just the rate
Line up what each one charges for the first version, for a change halfway through, and for the month after launch. That comparison usually decides it.
- 6
6. Start with a small paid piece of work
One real, bounded task in a code repository your company owns. In a week or two you learn how they communicate, how they handle feedback and what their code looks like, for a fraction of the full price.
Types of Software Development Companies
"Software development company" covers very different businesses. Knowing which kind you are talking to tells you most of what to expect.
Agencies
A team that quotes a project and delivers it, usually with a project manager, designers and developers. Good for a settled scope and a date that needs several people at once. Changes go through change requests, and the work after launch is usually a new contract.
Offshore and nearshore firms
Developers in lower-cost regions, billed monthly per person or by the hour. Good value for long, steady work, if someone on your side sets priorities and checks quality.
Staff augmentation firms
They supply developers who join your team and take direction from you. Useful if you already have a technical lead. Without one, nobody is steering the work.
Freelance marketplaces
Not a company, but often on the same shortlist. One person for one well-defined job. Our comparison of Toptal and Upwork covers the two biggest.
Development subscriptions
A flat monthly fee for a queue of requests worked one at a time. Big pieces of work are split into smaller ones that ship in turn. Our guide to developer as a service explains the model.
For a list of firms grouped by these types, see the best product development companies. For how the options compare as ways to get a whole product built, see outsourcing product development.
Where to Find a Good Software Development Company
Referrals first. A founder who shipped a product with a company and would use it again is worth more than any ranking. Ask what went wrong, not just whether they liked them.
Review sites second. Clutch is the largest directory for development firms. It says a team confirms each reviewer's identity and that the project really happened, and that its analysts interview many clients by phone before a review is published. It also says it may earn a fee for some placements, so read the reviews, not the order of the list.
Their own products third. A company that has built and still runs software you can try is easier to judge than one that only shows client logos.
What a Software Development Company Costs
US-based firms charge well above the directory-wide rate. But the rate is rarely what decides the final bill. These four ways of charging are.
Fixed price
One quote for a defined scope. Predictable, as long as nothing changes. Every change becomes a change request with its own price.
Time and materials
You pay for the hours worked. Flexible when the plan is still moving, with no ceiling unless you set one.
Dedicated team
A monthly rate per person for people who work only on your product. Suits months of full-time work, with you directing it.
Subscription
A flat monthly fee for requests worked one at a time. Change is part of the fee, and you can stop when the work runs out.
For the full cost of building and running a product, see SaaS development cost.
Questions to Ask a Software Development Company
The five questions at the top of this guide matter most. These help you go deeper on the calls.
Questions for the first call
- Can I try a live product you built, and talk to that client?
- Who exactly will work on my product, and how much of their week is mine?
- How often will I see working software, and where?
- How do I send you a request, and how quickly do you reply?
- What do you need from me each week to keep things moving?
- What happens if the developer on my product leaves?
- Can I stop at any point, and what do I keep if I do?
- Will you start with a small paid piece of work before the full contract?
Listen to how they answer as much as what they say. Plain answers to plain questions are a good sign of how the next six months of updates will read. If you are not technical, our guide to how to hire a software developer covers how to judge technical answers without being an engineer.
Which Kind of Company Should You Choose?
Predictable for a defined project. Agree the price of changes and of the work after launch before you sign.
Good value when someone on your side directs the developers and reviews their code.
The cheapest way to get a single piece built. You do the vetting and the managing.
A flat monthly fee, requests worked one at a time, and every change is another request rather than another contract.
How StackTie Fits
StackTie is a development subscription, not an agency. One senior developer, Michael, leads every build, so the person you talk to is the person responsible for the code. You send requests, they are worked one at a time, and each one comes back in days as a pull request with a plain-English summary of what changed. Everything we build belongs to your company and lives in your own accounts. Big projects are welcome: they are split into smaller requests that ship one after another. There is a money-back guarantee if it is not a fit. It is not the right choice if you need native iOS or Android apps or a whole team working in parallel. The price and what is included are on the homepage.
