Neveo outsources development after an unsuccessful attempt in-house
Summary
Belgian start-up Neveo has just raised €1.5 million via an investment from the W.IN.G (Wallonia Innovation and Growth) fund, of which we are a partner.
The story of this start-up, which is currently trying to break out of our borders and conquer international markets, began in Belgium. Developing a product in-house is a tour de force that few companies manage to pull off. After recruiting a CTO, they realised that this was not a wise choice and decided to outsource the development of their product to Belighted.
They soon realised that ‘it's more expensive but it goes a lot faster’.
About
Neveo’s idea is anchored in an effort to reconnect generations by means of a photo collage newspaper. Our seniors can now receive news from their family and relive the most memorable highlights of their children’s and grandchildren’s lives.
The concept is intended to be simple and easy to facilitate the newspaper reading by the elderly and the design of the newspaper by the family. In fact, it’s easy for us to share happy moments with a few clicks using the on-line application and voilà!
Neveo then gathers these photos monthly, lays them out in a newspaper that will be printed on paper -a format familiar to the elderly-, and then sent out by mail.
The challenge
Developing a product in-house is complicated and may be a cause of failure
Insourcing vs outsourcing
Like many start-ups wanting to launch a software product on the market, the question of technical choice arose: who would develop the application?
They decided to recruit an IT profile by hiring a CTO (Chief Technology Officer), only to realise 6 months later (and invest €40,000) that this had proved to be a poor choice. So they had to find an alternative way of developing the product. They were convinced that it's not crucial for a founder to have a technical background. Indeed, this could mean that the founders spend more time focusing on developing the software than on finding a market for the product.
Developing a marketing and sales strategy is just as important, if not more important, than the product, even in the early months.
Wanting to focus 100% on emancipating their business, they either decided to recruit another developer or outsource product development to an agency that could handle 100% of the development and architecture:
‘We were always behind with development. There was a lack of skills and we were falling way behind, but we decided we needed to hire a company that could put several people on the project for a short time so that we could complete the development and focus on the business. It cost us a considerable amount of money for a year (...) Are we going to carry on like this, without being sure of having a tested product?’
Time (and money) was against Neveo, so they had to find a solution quickly or risk the start-up going bankrupt. In the end, they decided to outsource the development of their product to an agency.
“We chose Belighted mainly for their expertise because according to your reputation, you are extremely skilled. If I work with Belighted, I get a quality product and they take charge of everything, whether architecture or design. They do everything that’s needed. But above all, it’s the proximity: the ability to contact them quickly, hold face-to-face discussions, etc.”
The solution
Criteria to chose a software house
Proximity
Where product strategy is concerned (roadmap, KPIs, feature prioritization, etc.), which is the main driver of any SaaS undertaking, being able to discuss their ideas face-to-face in their native language while challenging ideas in the same room with a local partner has tremendous value in the eyes of the customer.
Moreover, this speeds up of discussions on particular choices and the validation of technical specifications between the outsourcer and the customer to move ahead with the project.
Seeking help from a Belgian partner acting as an extension of the Neveo team while also acting as product partner was central to the successful completion of the project.
Price
Albeit price is always a selection criterion when you are planning to develop a project, you must understand that it is going to be necessary to spend a some tens of thousands of euros before you achieve a minimum viable product (MVP) meeting the needs of the market and winning your first customers.
At first glance, recruiting a person in-house would seem to cost less but this person would likely possess very few of the many skills that a “Swiss Army Knife” contractor would have. Although having to use an outsourcer is not going to reduce your monthly burn-rate, the TCO (Total Cost of Ownership) of product development will be far less than using freelancers; understanding this is essential for a startup.
Skills of the team
Belighted’s in-house expertise also played a determining role in the choice of a web & mobile software house to take over the product, understand its special features and the stakes for the company.
- Indeed, developing an application takes time and requires very specific skills and a variety of competent profiles:
- Product strategy
- Front-end development (design and user experience)
- Back-end development (server side)
- Project management
- Structure, frameworks and expertise for developing a SaaS app
Thanks to Belighted, Neveo was able to pivot more quickly and reach their product-market fit.
In addition to developing the application, there was also the matter of the business model.
Originally Neveo wanted to reconnect the generations.
The concept was fundamentally the same as today’s, with the goal of making it possible for the family to connect by smartphone and computer with the elderly. They have the possibility of seeing and hearing their family using their television screen or landline.
The solution presented a whole new array of technological challenges that were much more complicated today since Neveo was dependent on its technological telecommunications and TV installer partners. Albeit this project brought in a large tender for our partners, as implementation was too long and did not convey the image of a startup that the founders wanted, we decided to go back to a paper format that the elderly are well familiar with and appreciate.
As it turned out later, quickly pivoting turned out be the right choice by adopting a less technical solution.
The results
Did we meet Neveo’s expectations?
“Being able to deliver an attractive product was awesome. While it’s true that the big bill that has to be paid all at once may seem frightening at first glance, it’s also true that it ultimately costs far less than an in-house person (Editor’s note: The founders are not developers, which complicates choosing the right person to hire). What you are able to do in 1 month thanks to your array of talents and skills is equivalent to what an in-house developer would accomplish working alone in a few months, wearing different hats. And I find that an outsourcer’s greatest strength is that it focuses on the essentials.” - Vincent Leroy, CEO of Neveo
What are the key take-aways from our collaboration?
The speed of execution, the technical expertise, the technical reliability and the user experience.
How did we help Neveo reach their business objectives?
A startup like us is not able to have a two- or three-person team assigned to the back end, the front end and design. It’s too costly. It's impossible to justify to investors that you need an in-house team unless you have a complex product to be developed, especially when you have a burn rate of €25,000 when you’ve still gone nowhere with the business or the product. That’s the strength of working with a team that is not made up of just freelancers because if someone gets sick, some things will fall into complete disarray. If someone at Belighted is out sick, there is always someone else to take their place, a solution is always found because our team is sufficiently big.”
About
Neveo
Neveo’s idea is anchored in an effort to reconnect generations by means of a photo collage newspaper. Our seniors can now receive news from their family and relive the most memorable highlights of their children’s and grandchildren’s lives.
The concept is intended to be simple and easy to facilitate the newspaper reading by the elderly and the design of the newspaper by the family. In fact, it’s easy for us to share happy moments with a few clicks using the on-line application and voilà!
Neveo then gathers these photos monthly, lays them out in a newspaper that will be printed on paper -a format familiar to the elderly-, and then sent out by mail.
Context
The Problem
Like many other startups striving to get a software application to the market, the matter of the technical choice arises: who is going to be tasked with developing the application?
Time (and money) were against Neveo, and it was vital to find a solution or else the startup might have to declare bankruptcy. They ultimately decided to outsource the development of their product to a contractor.
The Goals
- Create a new business model (pivoting to a less technical solution)
- Reaching Product-Market fit
Don't just take our word for it
“We chose Belighted mainly for their expertise because according to your reputation, you are extremely skilled. If I work with Belighted, I get a quality product and they take charge of everything, whether architecture or design. They do everything that’s needed. But above all, it’s the proximity: the ability to contact them quickly, hold face-to-face discussions, etc.”
The Challenges
Developing a product in-house is complicated and may be a cause of failure
Neveo first decided to recruit an IT professional by hiring a CTO (Chief Technology Officer) only to realize 6 months later (and after investing €40,000) that it was a poor choice. An alternative way of developing the product was required. They believe that it was not essential for a founder to have a technical background.
In fact, this might have caused the founders to spend more time prioritizing the development of the software instead of finding a market for this product. Building a marketing and business strategy is actually just as important, if not more important, than the product itself during these first few months. Wanting to concentrate fully on the unleashing of their business, either they had to recruit another developer or outsource the development of the product to an outsourcer who would assume complete responsibility for product development and architecture:
"We were always running behind schedule with development. There was a lack of expertise and we became severely behind schedule but we told ourselves that we had to hire a contractor that could put several people to work on the project for a short period of time in order to complete development and to focus on the business. That cost us a considerable amount of money in one year (...) Was that how things were going to continue, with no certainty of having a tested product?”
- Vincent Leroy, CEO of Neveo
Criteria to chose a software house
Proximity
Where product strategy is concerned (roadmap, KPIs, feature prioritization, etc.), which is the main driver of any SaaS undertaking, being able to discuss their ideas face-to-face in their native language while challenging ideas in the same room with a local partner has tremendous value in the eyes of the customer. Moreover, this speeds up of discussions on particular choices and the validation of technical specifications between the outsourcer and the customer to move ahead with the project. Seeking help from a Belgian partner acting as an extension of the Neveo team while also acting as product partner was central to the successful completion of the project.
Price
Albeit price is always a selection criterion when you are planning to develop a project, you must understand that it is going to be necessary to spend a some tens of thousands of euros before you achieve a minimum viable product (MVP) meeting the needs of the market and winning your first customers. At first glance, recruiting a person in-house would seem to cost less but this person would likely possess very few of the many skills that a “Swiss Army Knife” contractor would have. Although having to use an outsourcer is not going to reduce your monthly burn-rate, the TCO (Total Cost of Ownership) of product development will be far less than using freelancers; understanding this is essential for a startup.
Skills of the team
Belighted’s in-house expertise also played a determining role in the choice of a web & mobile software house to take over the product, understand its special features and the stakes for the company.
"We had a deadline that was very important and you immediately assigned two full-time people to our project and directly took charge of the entire project. You very quickly took charge of all the technical expertise of the company.
- Vincent Leroy, CEO of Neveo
Quickly pivot and achieve product-market fit.
In addition to developing the application, there was also the matter of the business model. Originally Neveo wanted to reconnect the generations. The concept was fundamentally the same as today’s, with the goal of making it possible for the family to connect by smartphone and computer with the elderly. They have the possibility of seeing and hearing their family using their television screen or landline. The solution presented a whole new array of technological challenges that were much more complicated today since Neveo was dependent on its technological telecommunications and TV installer partners. Albeit this project brought in a large tender for our partners, as implementation was too long and did not convey the image of a startup that the founders wanted, we decided to go back to a paper format that the elderly are well familiar with and appreciate. As it turned out later, quickly pivoting turned out be the right choice by adopting a less technical solution.
"In fact, our cooperation reassured investors and provides help with challenges and fund raising, etc., it allows us to make products on time and to test them in a timely manner”
- Vincent Leroy, CEO of Neveo.
The Results
Did we meet Neveo’s expectations?
“Being able to deliver an attractive product was awesome. While it’s true that the big bill that has to be paid all at once may seem frightening at first glance, it’s also true that it ultimately costs far less than an in-house person (Editor’s note: The founders are not developers, which complicates choosing the right person to hire). What you are able to do in 1 month thanks to your array of talents and skills is equivalent to what an in-house developer would accomplish working alone in a few months, wearing different hats. And I find that an outsourcer’s greatest strength is that it focuses on the essentials.” - Vincent Leroy, CEO of Neveo
What are the key take-aways from our collaboration?
The speed of execution, the technical expertise, the technical reliability and the user experience.
How did we help Neveo reach their business objectives?
A startup like us is not able to have a two- or three-person team assigned to the back end, the front end and design. It’s too costly. It's impossible to justify to investors that you need an in-house team unless you have a complex product to be developed, especially when you have a burn rate of €25,000 when you’ve still gone nowhere with the business or the product. That’s the strength of working with a team that is not made up of just freelancers because if someone gets sick, some things will fall into complete disarray. If someone at Belighted is out sick, there is always someone else to take their place, a solution is always found because our team is sufficiently big.”