How to hire a software agency

7 things that will make or break the partnership

By Chris Roth
Choosing a technology partner can make or break your project. For startups, choosing the right technical co-founder or fractional CTO will make or break the entire company.
Luckily, there is a method to choosing the right tech partner that can prevent bad outcomes and increase the chance that your project will succeed. You may be tempted to go with someone you know, but when it comes to something as complicated as custom software or sophisticated IT systems, you need something more than just good vibes. You need to know that you’re hiring the right firm.
At Thoughtful, I’ve helped dozens of startups with technology and I’ve been the software engineer that has had to clean up another agency’s disastrous code on more than one occasion. I’ve also gotten to work with the founders of multiple successful startups and taken note of what they got right. From these experiences, I’ve zeroed in on the elements of successful partnerships between clients and tech agencies and identified the common pitfalls to look out for:

Do they understand your business?

First and foremost, does your technical partner understand and care about your business? This is the single most important thing to look for when interviewing tech agencies - if you are going to find a true tech partner and not just another “vendor”, you need someone that understands your needs inside and out. It’s better to work with someone who cares even if they’re a bit unconventional than to work with someone who uses the latest tools and frameworks but is more concerned with finding their next client than helping you succeed.

Agile vs Waterfall

Secondly, consider whether they use an agile or waterfall approach. Agile development has emerged as a clear winner over waterfall over the past two decades [1], yet we still see many organizations that revert to a Stage-Gate (waterfall) method of development due to either management pressure or inexperience. Planning a project out fully and creating a detailed roadmap is good; waiting months until it’s time to release to do a deploy for the first time is not. You should talk with a potential partner about their development methodology, deployment process, and how the QA process will work.

Level of Service

You should have a discussion about service level and communication. Some agencies specialize in development, but aren’t necessarily focused on the maintenance and support side, leaving your team to figure out how to maintain their custom code. You should establish clear expectations on how often you will meet to discuss the project during the build phase and how the project will be maintained once the development is complete. This is also a good time to clarify what the QA and testing process will look like and who will be on call if anything unexpected happens outside of business hours.

Quality + Attention to Detail

We’ve seen a lot of agencies that are great at selling their services, but who produce sub-par code and designs. In addition to rigorously looking at an agency’s portfolio and past quality of work, you should have a trial period with any large project where you can end the contract early if you’re not happy with the quality.

Experience Level

Unlike law, medicine, and accounting, software engineering is an unregulated industry that does not require a license to practice. You should do your due diligence on the agency as if you were hiring your own staff, and pay attention both to the partners that you’re talking to during the buying process (look for experienced management) but also pay attention to the experience level of the staff that will be doing the design and development. For assessing management experience, ask about methodology and software estimation (be skeptical of exact dates or prices when reviewing estimates - experienced agencies will give estimates as ranges). For assessing engineering and design skill, have a trusted technical advisor talk to their team and look at their portfolio.

Work Format + Pricing

Different technology firms work in different ways. Many act as staffing agencies, embedding within your company to boost your teams’ productivity. Others operate more like venture studios, taking equity and even helping you with fundraising. There’s quite a wide variety in technology partnership models and each come with their own unique pricing and licensing styles. It’s also not uncommon for a firm to operate in multiple formats, depending on the specific project. Here’s a few questions to think about:
  • Will you need complete ownership of intellectual property, or are you ok with licensing from the partner? → Focus on solutions architects or product studios.
  • Do you need help with co-founding, fundraising, or management? → Focus on venture studios or product studios who manage the entire project.
  • Are you looking for an agency who will embed in your teams’ processes, join your Slack, and come to your company meetings? → Focus on staffing agencies that do time-based billing.


When talking to agencies globally, there’s a lot to think about:
  • Time Zones - what times will meetings be scheduled? What times of day will the team be online?
  • Language - as is often the case, if you end up working directly with the developers and designers (not just the project manager or partner), will they speak fluent English?
  • Exchange rates - if you’re paying in a different currency, consider whether your cost will go up in the future if the exchange rate changes
  • Regulatory awareness - is the agency familiar with regulations in your area, such as GDPR or HIPAA?
There’s a lot to think about when hiring a technology partner. Getting it wrong can be disastrous, but getting it right could be the missing link in making your company successful.
We’re always looking for great companies to partner with at Thoughtful - let us know if you’re interested in discussing a partnership!
[1] I highly recommend reading Accelerate: Building and Scaling High Performing Technology Organizations by Nicole Forsgren PhD, Jez Humble, and Gene Kim.

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