Quick summary
Software development for startups: most founders choose between five routes: hire a developer, find a technical cofounder, use a freelancer, hire a software development company, or subscribe to a development service. The best one depends on your stage, your budget and whether anyone on your side can judge the code.
What it costs: Upwork says freelancers typically charge $10 to $100 an hour. Clutch puts most agencies at $25 to $49 an hour and its average reviewed project at about $132,000 over 13 months. A US developer's median salary is $135,980 before benefits.
What to check before you pay: the code and every account are in your company's name, you see working software every week or two, and you know exactly who writes the code.
Software Development for Startups at a Glance
| Route | What you pay | How fast you start | Best for | Watch out for |
|---|---|---|---|---|
| Full-time hire | US median salary $135,980, plus benefits and recruiting | Weeks to months | A product with revenue and years of steady work | A big fixed cost before you know what to build |
| Technical cofounder | Equity, often a large share | When you find the right person | Software that is the whole business, and little cash | Takes time to find; a bad match is hard to undo |
| Freelancer | Typically $10 to $100 an hour (Upwork) | Days | One well-defined job, with someone who can review the code | You do the vetting, managing and testing |
| Software development company | Most at $25 to $49 an hour; average project about $132,000 (Clutch) | Weeks, after scoping | A defined first version with a launch date | Change requests and the cost of work after launch |
| Development subscription | A flat monthly fee | Days | An ongoing list of things to build and fix | One request at a time, not a parallel team |
| No-code or AI app builder | A monthly plan | Today | Testing an idea before you spend on code | Hitting limits once real customers arrive |
Whichever route you pick, check these four things first:
- Check 1, "Who owns the code and the accounts?" The code repository, hosting, domain and payment accounts should be in your company's name, and any contractor's code should be assigned to you in writing.
- Check 2, "How often will I see working software?" Every week or two is a good rhythm for a startup. Months of silence followed by a big reveal is how budgets disappear.
- Check 3, "Who exactly writes the code?" With a company, ask whether the senior people on the sales call are the ones building, or whether the work is handed to someone else.
- Check 4, "What happens when the plan changes?" It will. Find out how a change is priced before you sign, not after.
More to build than people to build it?
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 for founders who need software built and are deciding who should build it. It is written for business owners, not engineers. If you already know you want an outside firm and need to compare them, see how to choose a software development company and our list of product development companies for SaaS startups.
What Startups Need From Software Development
Startup software development is different from building software for a large company in one way above all: the plan is going to change. You are building to learn what customers will pay for, so the work that matters most is the work that gets something in front of them quickly and can be changed cheaply afterwards.
What you need also changes with your stage:
- Before customers. A first version small enough to launch in weeks. Y Combinator's Michael Seibel puts it bluntly: "launch something bad, quickly." He suggests asking what you could launch in three weeks, because then "the only things that could be on my spec are things I can build in three weeks." Our guide to MVP development covers what to put in it.
- First paying customers. Fixing what breaks, and building what those customers ask for, quickly enough that they stay. This is where many startups find their first developer was right for the launch and wrong for what comes after it.
- Growing with revenue. A steady stream of features, integrations and fixes on a product people rely on, with tests and code review so new work does not break old work. At this stage a full-time hire often starts to make sense.
Your Options for Startup Software Development
Hire a full-time developer
You get someone who knows your product deeply and works only on it. The cost is a salary whether there is enough work or not, plus benefits and the weeks it takes to hire. It fits best once the product and revenue are steady. Our guide on how to hire a software developer covers the process and the interview.
Find a technical cofounder
A partner who builds for equity rather than cash. It works when the software is the business and you cannot pay for development, but finding the right person can take months, and the split is hard to undo. More founders now start alone: Carta found solo-founded startups rose from 23.7% of new startups in 2019 to 36.3% in the first half of 2025. See how to find a technical cofounder.
Use a freelancer
The cheapest and fastest way to get one defined piece of work done. You take on the vetting, managing and testing, which is hard if no one on your side reads code. Our comparison of an agency vs a freelancer covers when each fits.
Hire a software development company
A firm builds your first version, usually as a project with a quote. You get more people and a process, at a higher price, and the quote is only as good as the written scope. Ask how changes are priced, and what support after launch costs. Our guide to fixed price software development explains the trade-off.
Subscribe to a development service
A flat monthly fee for requests worked one at a time. It suits a startup with a long list of things to build and fix and no one to do them, because you can change priorities every week without renegotiating a contract. It is not a whole team working in parallel. See developer as a service.
Build it yourself with no-code or AI tools
Tools such as Bubble or an AI app builder can get an idea in front of customers for the price of a monthly plan. Many founders start here and bring in a developer when the app outgrows the tool or starts breaking. See vibe coding cleanup for what that handover involves.
What Software Development Costs for a Startup
Published prices vary widely, and most come from firms that sell development, so use them as rough ranges rather than quotes.
| Route | Published figure | Source |
|---|---|---|
| Freelancer | Typically $10 to $100 an hour | Upwork |
| Software development company | Most at $25 to $49 an hour; most reviewed projects $10,000 to $49,999; average about $132,000 over 13 months | Clutch |
| Senior North American developers | $125 to $250 or more an hour | Keyhole Software, a development firm |
| A basic MVP | About $15,000 to $40,000, 4 to 8 weeks | South, a hiring firm |
| A custom web app MVP | About $40,000 to $100,000 or more | South |
| A full-time US hire | $135,980 median salary; about $194,000 with benefits by our estimate | BLS |
The full-time figure needs a word of explanation. The Bureau of Labor Statistics puts the median salary at $135,980, and benefits make up 30% of private employers' compensation costs. Salary is the other 70%, which takes the total for a median developer to roughly $194,000 a year by our estimate. Recruiting comes on top: SHRM's 2026 benchmarking puts the median time to fill a non-executive job at 39 calendar days, across all roles, not developers specifically.
What moves the price most is not the route but the scope. A smaller first version, written down clearly, is the cheapest thing you can do for any quote. Our guides to SaaS development cost and how to write software requirements go further.
How to Choose a Software Development Company for Startups
If you go with an outside company, these questions separate the ones that suit a startup from the ones built for large clients.
- Question 1, "Can I see something you built for a startup like mine?" Ask for a live product, not just screenshots, and ask to speak to that founder.
- Question 2, "Who will write my code, and will they change?" Get the names. Startups are small clients for many firms, and small clients can be handed to the most junior people.
- Question 3, "How often will I see working software?" Every week or two, in a form you can click through yourself.
- Question 4, "How do you handle a change of plan?" For a startup, the right answer is a short, priced change, not a new contract. If changes are slow or expensive, you will stop making the ones you need.
- Question 5, "What happens after launch?" Who fixes bugs, how fast, and at what price. The first months after launch are when customers ask for the most.
- Question 6, "Will everything be in my company's name?" The code, the repository, the hosting and every third-party account.
For the full checklist, see how to choose a software development company. For the contract itself, see software development contracts.
Match the Route to Your Stage
Spend as little as you can until someone wants it. Expect to rebuild parts later, and keep everything in your own accounts.
Predictable for a written scope. Agree how changes and post-launch support are priced before you sign.
A flat monthly fee, requests worked one at a time, priorities you can change each week, and no hire to make yet.
Deep knowledge of your product. Budget for the salary and the time to hire, and keep the code reviewed.
Red Flags
- "We'll need six months before you see anything." A startup cannot learn anything from code nobody can use.
- A quote with no written scope. You cannot tell later what was included, and every gap becomes a paid change.
- The code lives in their account. If the repository, hosting or domain is in the developer's name, you do not control your own product.
- No one you can name. If you cannot find out who is writing the code, it may change hands without you knowing.
- They agree to everything. A good developer pushes back on features that will not help you launch. One who never does is not thinking about your budget.
- A rebuild as the first suggestion. If you already have an app, a rebuild is sometimes right, but it should follow a look at the code, not come before it. Our guide to code audit services covers that review.
What to Own From Day One
Whoever builds your software, make sure your company owns it. Under US copyright law, 17 U.S.C. section 204, a transfer of copyright ownership is not valid unless it is in writing and signed. For a freelancer or a firm, that means a contract that assigns the code to your company.
- The code repository, such as GitHub, in your company's account, with the developer invited in.
- Hosting, the domain and the database, billed to your company.
- Third-party accounts, such as Stripe, your email provider and any AI service, in your company's name.
- Passwords and keys stored where you can reach them, not only on the developer's laptop.
If you take over an app from a developer who has gone, our guide to software project rescue covers getting access back.
How StackTie Fits
StackTie is a development subscription for startups with more to build than people to build it. You send requests in plain English on your own Trello board, they are worked one at a time in the order you set, and every request comes back within 2 business days as a pull request with a plain-English summary of what changed and why. Big projects, including a first version, are split into smaller requests that each ship on their own, and you can change priorities whenever you like. One senior developer, Michael, leads every build, so you always know who is writing your code. Everything we build belongs to your company and lives in your own accounts, there is no contract, and there is a money-back guarantee if it is not a fit. The subscription is not for native iOS or Android apps or a whole team working in parallel. The price and what is included are on the homepage.
