VC investors are holding their investments – how should you prepare in your software development for the upcoming?

Covid pushed us in software development industry into crazy times. First a full stop, then into crazy times where developers became so sought after that I am sure some felt like a god. That pushed the development costs to skyrocket with developer’s salaries hiking 30-40% in Finland, Australia and in India. That is of course all good when VC backed start-ups aren’t seeking for cost-to-quality ratio, instead look just for the people who can work next to them in the rapidly changing world. That has come to a stop.

The times of unlimited spending to hiring in-house developers are gone. Now VC backed companies are forced back to old-school thinking of a healthy business and that is, how do I make my business healthy and sustainable to possible downturn. Part of that will be evaluating company’s costs structures and the ability to produce results.

Honestly, I thought this would have happened when world was put to stop in March 2020. Oh boy was I wrong. But when I look at the global economics at this time, I don’t see any ways Europe or Australia can print so much money that it would help to keep things growing.

It is time to buckle up and be ready securing continuity to your software development

I am seeing a change in the market of how companies are buying software development services and the times of paying anything to have a developer sit next to the CTO has come to an end for few reasons. First of course is that the CTO herself isn’t sitting physically with the team anymore. Second is that companies are forced to evaluate their cost vs output and that pressure comes from company owners and CEO.

Adapting to this new/old cost sensitive business world, it is crucial that CTO’s of fast growth companies evaluate their need for in-house teams and which parts of the development could be outsourced to partners. The most comfortable approach is of course having everyone in-house, but when evaluating from a business perspective, that is inefficient as a whole and not pushing the business forward.

How should fast growth companies prepare?

The right term right now to thing is “how do I extend my runway to 2-3 years”? That means, how do I make sure I have enough cash in my company account securing that we can last next 2-3 years without a need to do new investment rounds. Along with the thinking of extending runway comes the need to evaluate the quality of development, speed of development, roadmap and people who execute the backlog.

When I left Accenture in end of 2013, my bet was that companies want to buy software development as a service where vendors agree to outcomes, such as timeline, budget and quality. Yes, I was totally wrong on that one. Winning model was to talk about Agile development and align the software development method with contracts = vendors have zero risk although while giving a “money back guarantee”.

Preparing for the coming tough money times, fast growth companies should prepare now by evaluating their contracts with vendors to understand that what is the commitment of the partner for outcomes. Are there some guidelines to give understanding to budget and timeline? Are there some kick-backs for vendor when they deliver below budget and timeline to courage them to find the best route to desired products?

Once contracts are reviewed, it is time to evaluate which skills are critical to the company and look for outside help on the rest. Here is a very good 5 min. video on when to outsource and when to keep in house:

How have we prepared for this at Coredo?

From our perspective, we have prepared for this since last 8 years. This is how I predicted the industry to go in 2014 when I started Coredo – its just taken 8 years longer than I expected. 😉

At Coredo, we have always focused our business interest in finding the best possible bang-for-the-buck. That means, we have since our birth been optimizing how we create value to our customers.

Since the start, our software development teams have always located in India. Why? Because of that is where all of the world’s best software is developed (Microsoft, SAP, Intel, IBM, Bosch, etc. have their R&D in India. Bosch R&D facility is 50 meters from Coredo office in Bengaluru, India) meaning that the best talent in the world is in India – specifically in Bengaluru when talking about leveraging the modern technologies.

We have a strong Accenture, Capgemini, Infosys background in our people and along with it, we have always taken pride in standing out from the pack with our ability to understand even complex businesses and match software development to the business needs.

As a results, we are an international boutique software development agency with offices in Sydney, Helsinki and Bengaluru and have mastered the way to deliver high-quality software development services from offshore. We work in the intersection of business and technology and continue to optimize the optimal price-to-quality ration for our customers.

Why should you get in touch with Coredo to prepare for the upcoming?

The near future isn’t looking pretty in the world of software development. Ability to attract experienced developers with right kind of skills is close to impossible. Together with us, you don’t have to sit and wait for the world to go through a turmoil, instead, you can see it coming and prepare yourself together with us to come out as a winner. We will help you to put your focus in business and clients while we support you in the software development, architecture. We help you to fix projects gone bad, increase quality by introducing test automation and get your costs structure to the international standards.

If you have read all the way here, I highly recommend we take a Teams call and discuss your situation further.


Joona Puhakka
Founder of Coredo
Australia: +61 41 6683950
Finland: +358 50 5339571

Joona Puhakka

Joona Puhakka

As Founder of Coredo, I am constantly studying the industry, the markets, international trends and looking for best ways for us to add value to our customers. I am super passionate about innovating better ways to leverage digitality in the continuous process of improvement.

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