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Whether you need to create a new product from scratch or delegate some of the company’s tasks, it’s always about hiring new people. And this is where the question of the employment model comes into the scene. If you don’t want to go through all the hassle of interviewing and employing in-house, you have two main options: outsourcing and outstaffing. What’s the difference, and which one to choose for your specific case? We’ll try to find the answers in this outsourcing vs. outstaffing battle.
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What is an IT Outsourcing Model?
In very short terms, outsourcing means delegating the whole project to another company. In this case, you can be minimally involved in the process and only communicate with the project manager to share your requirements, ideas, and suggestions. With the outsourcing model, the people working on your project might be working on other projects as well, there might be rotations in the team, and you most likely won’t have direct access to the people. However, you won’t need to deal with any people-related issues in return.
Real-life outsourcing example: A small business needs to set up a new website and delegates the task to an outsourcing web development company. The web development company designs and builds the website, ensures it runs smoothly and securely, and handles any ongoing maintenance and updates. The small business focuses on its core competencies and leaves the technical aspects of the website to the experts. No direct communication with website developers, designers, or testers is going on, a PM is a person of contact responsible for translating the client’s needs to the outsourced team. The project is not that large, so developers also work on a website for another small company.
Pros and Cons of Outsourcing
Outsourcing is a prevalent employment model. Inn 2019, at least 37% of small businesses outsourced at least one business process, and this number only rises every year. However, it’s not a one-fits-all solution — there are advantages and disadvantages that a business needs to consider before opting for this model.
Outsourcing pros:

Lower overhead costs. Outsourcing can help reduce overhead costs associated with hiring and training employees, purchasing equipment, and maintaining infrastructure.
Access to technology. Outsourcing can provide access to the latest technologies and tools that may not be available in-house or may be too expensive to implement.
Access to a talent pool. Outsourcing to external service providers can provide access to a more extensive and diverse talent pool than in-house hiring, especially for companies located in areas with limited talent availability.
Risk sharing. Outsourcing allows companies to share the risks associated with a project or service with the external provider. It can be especially beneficial for high-risk projects with significant potential losses.
Focus on core competencies. Outsourcing non-essential tasks allows businesses to concentrate on their strategic goals and core competencies.
Reduced legal burden. Outsourcing can reduce the legal and regulatory compliance burden for companies operating in different countries, as the external service provider would be responsible for compliance in their respective jurisdictions.

Outsourcing cons:

Communication challenges. Outsourcing may create communication challenges due to language barriers, cultural differences, and time zone differences.
Security risks. Outsourcing may create security risks, especially when sensitive data is involved. External service providers may not have the same security protocols or standards as your business, leaving the data vulnerable.
Limited customization. Outsourcing may limit the customization options available to clients, as external service providers may have standard processes and procedures that do not align with the client’s specific needs.
Contractual obligations. Outsourcing contracts may have strict contractual obligations that can be difficult to modify or terminate if the project or service needs changes.
Dependency on the external provider. Outsourcing may create a reliance on the external service provider, making it difficult to bring the work in-house or switch to a different provider if needed.

What is an IT Outstaffing Model?
You can think of outstaffing as extending your team with (usually remote) specialists but without employing them in-house. With an outstaffing model, your extended team is employed by an outstaffing agency. They deal with documents, wages, bonuses, equipment, and other operational issues, while you are responsible for the tasks, assignments, and communication with your new employees. So, you get a software development team fully at your disposal, but some other people are dealing with all the boring stuff.
Real-life outstaffing example: A company needs to expand its in-house development team to work on a new mobile app project. They hire a team of developers and testers through an outstaffing company who work remotely but are integrated into the company’s existing team. The company retains complete control over the project, setting the priorities and tasks for the outstaffed team, and communicating with them directly. The outstaffed team members work exclusively for the company and are fully dedicated to the project, ensuring consistency and quality. The company pays the outstaffing company a monthly fee for the services provided by the team members, and the outstaffing company takes care of HR, payroll, and legal compliance.
Pros and Cons of Outstaffing
As we already said, both outsourcing and outstaffing have their pros and cons. Outstaffing might be a perfect solution for those seeking more control over everyday tasks. But will it be as good for the businesses willing to concentrate on their core competencies without diving into the development routine? Let’s take a look at the advantages and disadvantages of the outstaffing model for your company.
Outstaffing pros:

Flexibility. With outstaffing, companies have the flexibility to scale their team up or down depending on the project requirements. It allows them to adapt quickly to changes in the market and avoid the cost and time associated with hiring and training new employees.
Cost savings. Outstaffing can be a cost-effective option for companies as they only pay for the services provided by the outstaffing company. It eliminates the need for additional costs such as employee benefits, office space, and equipment.
More control. With outstaffing, companies can communicate directly with the outstaffed team members, set priorities and tasks, and control the entire project workflow. It guarantees a higher level of transparency and control than outsourcing, where companies have less direct contact with the outsourced team.
Better integration with the in-house team. Outstaffed team members work exclusively for the company and are fully integrated into the company’s existing unit. It allows for better collaboration and teamwork compared to outsourcing, where the outsourced team may work independently.
Cultural fit. With an outstaffing model, companies have more control over the hiring process and can select team members who are a good cultural fit. It can lead to better collaboration and teamwork.
Long-term partnership. Outstaffing can lead to a long-term partnership between the company and the outstaffing provider, with the provider becoming an extension of the company’s team. It helps gain greater consistency and reliability compared to other hiring models.

Outstaffing cons:

Management challenges. Business owners may find it challenging to manage an outstaffed team member remotely, especially if they lack experience managing remote teams.
Communication challenges. Outstaffed team members may be located in a different region or time zone, making communication challenging. The company may have to adjust its work hours to accommodate for the outstaffed team member’s schedule or deal with communication delays.
Increased costs. Outstaffing can be more expensive than outsourcing, especially if business owners need to provide outstaffed team members with equipment, training, and benefits.
Potential for misalignment with company culture. Outstaffed team members may not be fully integrated into the company’s culture, leading to potential misalignment and communication issues. It can be especially true for long-term projects, where outstaffed team members may not have the same level of commitment or engagement as in-house team members.

Outsourcing and Outstaffing: Main Differences
Still can’t decide which employment model suits your company — outsourcing or outstaffing? Here is a detailed breakdown of every aspect of the development process within these two models. Please note that these are general aspects that might differ between outsourcing/outstaffing companies you’ll work with.

Aspect
Outsourcing
Outstaffing

Scope of work
The entire project/task is delegated
Specific roles/positions are delegated

Responsibility
The service provider manages the project/task
The business owner manages the outstaffed team members

Communication
Direct communication with the project manager
Direct communication with outstaffed team members

Scalability
Highly scalable, can handle larger projects
Limited scalability, better suited for smaller projects

Expertise
The service provider brings specialized expertise
The business owner has more control over the skillset of the outstaffed team members

Control
Less control over the work of the service provider
More control over the work of the outstaffed team

Flexibility
More rigid, changes to project scope may be challenging
More flexible, can adjust the outstaffed team member’s role as needed

Legal responsibility
The service provider is responsible for legal compliance
The business owner is responsible for legal compliance

Time zones
Can work with service providers in different time zones
Time zone differences may lead to communication challenges with outsourced team members

Outstaffing vs. Outsourcing: What to Choose?
Choosing between software outsourcing and outstaffing largely depends on the specifics of your business, available resources, and your personal preferences. The best way to make a decision is to contact outsourcing and outstaffing companies, and see what they have to offer and how it aligns with your company’s goals. Need to make a decision right now? Here’s some general advice:
Go for outsourcing if:

You need to complete a specific project or task that requires specialized skills that are not available in-house.
You want to reduce overhead costs.
You prefer a hands-off approach to managing projects and want to focus on your core business functions.
You need to scale your operations up or down quickly without investing in additional infrastructure or personnel.

Go for outstaffing if:

You need a dedicated team of professionals to work exclusively for your business.
You want more control over the hiring and management process for your staff.
You need a flexible, long-term staffing solution that can adapt to your changing needs over time.
You want to build a strong working relationship with your team members and foster a culture of collaboration and teamwork.

Both of the models offer a number of advantages to IT business owners, it’s a fact. Just weigh them out together with your personal interests and the unique goals and needs of your business, and you’ll have your perfect development team hired in the most effective and suitable way.
FAQs
What does IT mean to be outstaffed?
Outstaffing is a business model where a company hires an external team of professionals to work exclusively on its projects. The outstaffing company provides HR, administrative, and other support services to the external team, while the business is responsible for managing the team’s work and tasks.
What are the two 2 types of outsourcing?
There are two main types of outsourcing: onshore and offshore. Onshore outsourcing involves hiring an external team of professionals from the same country as the hiring company. Offshore outsourcing, on the other hand, involves hiring a team of professionals from a different country, usually with lower labor costs.
What is the difference between sourcing and outsourcing?
Sourcing refers to finding and selecting suppliers, vendors, or service providers for a particular business function or activity. Outsourcing, on the other hand, refers to the process of delegating a specific business function or activity to an external service provider. In other words, when you source — you look for service providers, employees, or suppliers. When you outsource, you delegate tasks or projects to the already-found service provider.

Update: 2023-04-27

Remember that shameful moment when you were talking with startup founders without understanding a single word they were saying? Don’t let it keep you awake at night anymore. Whether you’re just interested in startup culture or have already started your own company and want to better understand your position on the market — we’ll explain some theory in this guide to the startup stages of development.
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What Are Startup Growth Stages?
So what are the startup development phases at all? A company is not a flower, yet it still grows — or fails, in the worst-case scenario. It goes through different stages, and understanding where you’re at exactly with your business will help you define the actions needed for it to survive. Just like a flower needs to be watered and fertilized at specific times, your company does too. Not exactly with water or Supersoil, but you got the analogy.
According to statistics, 80% of companies fail within their first year. However, startups that make it past the early stages of development have a much higher chance of success. Understand the different stages of startup growth, and you’ll be able to identify weak areas and take steps to improve the company’s chances of survival.
6 Startup Growth Stages
Without further ado, let’s take a look at the six main stages of startup development. Take a mental note of the one that seems familiar if defining your business’s position is your goal here.
Pre-Seed Stage
In the pre-seed stage, the founders are focused on refining their idea and determining its potential market fit. They may be conducting market research and gathering feedback from potential customers to gain insight into the viability of their concept. This stage is usually characterized by a high level of uncertainty, as the founders are still in the process of developing their idea and figuring out the best way to bring it to market. So yeah, this is the stage where you’re going around telling everyone about your idea and seeing how people would react.
During this stage, founders may be working on developing a prototype or proof of concept, but they have not yet launched a product or service. The startup is not generating any revenue at this point, and the focus is on laying the groundwork for the company’s future success.
In addition to market research, founders may also be networking and seeking out potential advisors or mentors who can offer guidance and support as they navigate the early stages of building their startup. This stage is critical for setting the foundation of the company and developing a strong business plan that will guide the startup through the next stages of growth.
Here are some signs that a startup is in the pre-seed stage:

The founder is still working on their idea and hasn’t yet launched a product or service.
The startup is not generating any revenue.
The founder is focused on researching the market and determining the viability of their idea.

Seed Stage
The next stage for the startup is the seed stage. It’s not just an idea anymore, the growth process has started, and we’re waiting for the sprouts to show up. At this stage, the startup has a product or service that has been launched. However, the company is still in the process of building its customer base and refining its offerings. The founder is focused on ensuring that the product or service is meeting the needs of its customers and making necessary adjustments based on customer feedback.
At this stage, the startup is likely to be seeking funding from investors to help fuel its growth. The seed stage is crucial as it sets the foundation for the startup’s future growth and success, and the decisions made during this stage can have a significant impact on the startup’s trajectory.
Here are some signs that a startup is in the seed stage:

The startup has launched its product or service but is not yet generating significant revenue.
The founder is focused on building their customer base and refining their product or service.
The startup is likely to be seeking funding from investors.

Series A Stage
In the Series A stage, the startup has moved past the early stages and has demonstrated some level of success. The company is generating significant revenue and has a proven business model that has been validated by the market. With a solid foundation, the founder’s focus shifts to scaling the business and expanding the customer base. At this stage, the startup has likely already secured some level of funding from investors who see the potential for growth and success — if this is the case, congratulations on your first round of venture capital financing.
In order to attract larger investments, the company will need to show consistent revenue growth and a clear plan for future expansion. The founder’s attention will be on building a strong team, optimizing the product or service, and developing a solid marketing and sales strategy to drive growth.
Here are some signs that a startup is in the series A stage:

The startup is generating significant revenue and has a proven business model.
The founder is focused on scaling the business and expanding its customer base.
The startup has likely already secured some level of funding from investors.

Growth Stage
During the growth stage, a startup has established a solid foothold in the market and is looking to grow at an accelerated rate — as well as to get series B and C funding. This is a critical point in the startup’s journey, where rapid expansion is necessary to take advantage of the opportunities presented by the market.
In the growth stage, the company is likely to be focused on increasing its customer base, improving its product or service, and developing new markets. The founder’s attention will be on scaling the business and expanding its operations to meet the growing demand for their product or service. This may involve expanding the team, increasing marketing efforts, and exploring new distribution channels.
Some additional signs that a startup is in the growth stage include:

The company has a clear vision for its future growth and a roadmap to get there.
The startup is experiencing strong demand for its product or service.
The startup is likely to be profitable or close to profitability.

Expansion Stage
At the expansion stage, the startup has already achieved a significant level of success and is now looking to solidify its position as a market leader. The founder is focused on expanding into new markets and diversifying revenue streams to sustain the company’s growth. At this stage, the startup may also consider strategic partnerships or acquisitions to strengthen its position in the market.
Here are some signs that a startup is in the expansion stage:

The company has a proven track record of generating significant revenue.
The business is focused on expanding into new markets and verticals.
The startup is exploring new products or services to diversify its revenue streams.
The startup may be considering partnerships or acquisitions to accelerate its growth.

Exit Stage (Optional)
At this stage, the founder or investors are evaluating different options for the future of the company, such as mergers and acquisitions or an initial public offering (IPO). An IPO is a process through which a company goes public by selling shares of its stock to the general public. This can provide significant funding for the company and can also increase its visibility and credibility in the market. However, going public also requires the company to comply with regulations and to disclose financial information to the public.
Here are some additional signs that a startup is in the exit stage:

The startup is working with investment banks or other advisors to prepare for a potential sale or IPO.
The startup is disclosing financial information and other details about the company to potential buyers or investors.
The startup may be engaging in negotiations with potential buyers or underwriters for an IPO.

Final Word
Understanding the stages of startup growth is crucial for any entrepreneur to identify the position of their business and take the necessary steps to achieve success. With the majority of startups failing within the first year, being aware of the different stages of startup development can help founders identify weak areas and improve their chances of survival. Each stage requires a unique set of strategies, including market research, product development, customer acquisition, funding, and scaling the business. By recognizing the signs of each stage, founders can make informed decisions that will help them grow and succeed in the competitive world of startups.
In addition to the strategies mentioned, it is important for founders to focus on building a strong team that can help them navigate the different stages of startup growth. This team can include not only employees but also mentors, advisors, and investors who can provide valuable guidance and support. It is also worth noting that while the stages of startup growth may seem linear, the reality is often more complex, with businesses moving back and forth between stages as they face new challenges and opportunities. As such, it is important for founders to remain adaptable and open to change in order to successfully navigate the journey from startup to established business.
FAQ
What is a development startup?
A development startup is a company that is focused on creating and developing a new product, technology, or service that has the potential to disrupt the market or meet a previously unmet need. These startups often operate in the technology sector and are characterized by their innovative and agile approach to problem-solving.
What does the startup development stage mean?
The startup development stage refers to the phase in which a startup is focused on developing its product or service. This typically involves a lot of experimentation, trial, and error, and iterative design to create a product that meets the needs of its target market. During this stage, the startup is also typically focused on securing funding and building its team as it works to create a viable business model.
What is seed funding?
Seed funding is an initial round of investment that is typically provided to a startup to help it develop its product or service, validate its market, and build its team. This funding is typically provided by angel investors or venture capitalists and is used to cover early-stage expenses such as research and development, hiring, and marketing. Seed funding is usually provided in exchange for equity in the company, meaning that investors receive a percentage of ownership in the startup in exchange for their investment.

Update: 2023-05-05

Everyone knows that launching a startup may be extremely risky. It is not an easy process, but if you need to survive this initial scaling phase of your business from the start, the need to scale will not be long in coming. Unfortunately, a bad scaling strategy can undermine all your previous work. Some studies even suggest poor scaling is a likely reason a startup fails. So, let’s see how a scaling startup can skyrocket, succeed, survive, and grow.
Unleash Your Creativity With Fireart Studio Startup Launching Services
Differences Between Growing & Scaling a Startup
The link between resources and revenue is the primary distinction between growth and scaling. Scaling entails finding ways to raise income while lowering costs, as opposed to growth, which often includes investing in more resources to drive revenue.
What is Startup Growth?
People from Nexea say that a growing business needs lots of resources in order to increase sales. A business may need to add people to boost production or customer service, increase the cost of marketing and sales, or add resources like raw materials or employees’ equipment. In other words, while growth can result in higher revenue, it can also mean higher expenses as the business invests in resources to support its growth.
What is The Startup Scale?
Startup scaling is all about expanding and revitalizing the business. A new period during which the company increases sales, profits, employees, etc.
On the other hand, scaling refers to the capacity to raise output or service delivery while keeping costs constant. A business may need to make technology investments, simplify its processes, or discover other ways to become more efficient to grow. By reducing expenses and increasing efficiency, businesses can increase earnings and experience sustainable growth.
How to Scale a Startup
Startup scaling is a science. A growing startup often requires additional investment in both staff and product, but if you can’t keep up with your growing team and cash flow, you risk losing the business altogether. That’s why how to scale a startup means a lot of wisdom and business skill.
Invest in Technology
First, you must take care of your product quality and reliability. So, you need to invest in technology and then dwell on. Information technology can help firms of all sizes run more efficiently. Additionally, it might lower expenses and increase profitability.
Improve Marketing
Your marketing approach enables you to create the ideal products for your target market, stay in touch with the users, and choose how to share information about those products. Without a clear plan, you won’t be able to identify your target market, create the correct products, or effectively market them. For startups, it is very important to stay data-driven. To better target your strategy and advertising, data-driven marketing enables you to collect data and metrics that will assist you in understanding your target audience. Making a targeted marketing strategy based on client data is one of the finest ways to generate several revenue streams from segmented audiences.
Solve Your Customers’ Problems
Customer growth is one thing, but it’s only some of it takes to scale successfully. You need to have the right infrastructure in place to continue providing a positive experience for each of your customers. You still need to be open to new ideas, but at the same time, you need to have a baseline where there are clear measures for everything – from resolving customer complaints to managing the delivery of your product or service. This way you will continue to maintain quality even as you start to expand.
Make The Startup Run Without You
Fortunately, there are many opportunities for small businesses today. You don’t have enough time to keep track of everything on your own. But that doesn’t mean you have to hire full-time employees for every possible position.
SaaS tools can help with everything from email marketing to payroll management, and remote professionals can be a great option for one-off projects. There are plenty of tools and effective infrastructure for that.
To encourage startups, look for more affordable scaling options like contractors and outsourcing services that help save time and money by completing vital business tasks that don’t require day-to-day attention.
Hiring contractors are a great alternative to help you manage one-off projects with a clear deadline. For example, implement an affiliate program. By using less costly resources for essential tasks, you can devote more of your efforts to projects where you will directly contribute to your startup’s growth.
Reconsider Processes That Are no Longer Effective
Redesigning a company’s essential business processes is known as business process redesign. Entrepreneurs at startups quickly rearrange things if they no longer work. That’s a must. A tech startup increases efficiency by eliminating waste and excess, decreasing costs, and sharpening management. It’s common practice to gauge success using data and correct financial measurements.
Learn to Delegate
Scaling for a technology company is all about the ability and willingness to invest, realign and focus on what matters most without losing momentum and delegate if we speak about the staff management. Your staff will be more empowered by delegation, and it will also foster trust and professional growth. Additionally, it teaches leaders how to choose those who are most qualified to take on particular jobs or projects. Of sure, assigning responsibilities to others might reduce your workload.
Select The Right Staff
At the scaling stage, the team selection focuses on people with managerial competencies and are not afraid of incomprehensible tasks. At the same time, when growing a team, it is important to understand that turbulence, super-high development speed and multitasking are the basic business development conditions for which both the team and people must be prepared.
Invest in Management and Culture
Spending time and money to promote a positive workplace culture can create a more productive and profitable work environment. Workplace culture strategy directly impacts a company bottom line through increasing staff productivity, revenue and lowering attrition rates, etc.
Improve the Reputation
For a startup, to draw in and keep customers as well as staff is even more critical to uphold a stellar reputation than for an old organisation with the history. Understanding what influences a company’s reputation and how to enhance your own reputation can help you achieve your platform expansion goals, build your brand, and boost sales.
When Should You Scale Your Startup?
When they begin to experience strong product traction, most tech businesses scale. This is the key to understanding when to scale: when your current procedures begin to seem inadequate, when your clients demand more of you, and when you notice fresh opportunities in the distance.
Challenges You May Face While Scaling a Startup Business
Of course, at an early stage of business development, entrepreneurs, inspired by their first success, risk breaking away from reality and believing in their limitless abilities. The consequence may be a series of errors that accumulate and pull the company down, though no one notices it immediately. The challenges common in such high-growth startups during scaling are described below.
Wrong business model
Before you start scaling make sure your business model is viable. Once they get two or three customers, many companies think they can easily handle 20 to 30 customers. However, this is only possible if you have enough resources, infrastructure and financial capital. At the same time, the entrepreneur must be sure that attracting each new consumer really brings profit, and does not waste the resources of the organization.
Lack of strategy
When a company is gaining momentum, management’s daily tasks become ever more complex. Under psychological pressure, managers can make poor decisions, which leads to slower growth. The organization must have a clear goal to cope with the increased workload and not waste any energy. Focus on one product, in one market, for a peculiar audience.
Poor recruitment
One of the common mistakes start-up companies make during a period of rapid growth is poor recruitment. When your startup is growing rapidly, you try to find as many new employees as possible to cope with the increased workload. However, if you hire someone quickly, you run the danger of their not fitting the company’s culture or, even worse, having a detrimental impact on productivity , etc. or even worse.
Lack of long-term planning
Most startups set themselves short-term goals, for a maximum of one year, and at best for 3-5 years in advance. Most often this happens because businessmen do not want to be tied to large tasks and strive to free themselves as much room for maneuver as possible. In fact, all your goals should be based on a long-term strategy based on the mission and values of the company. Having chosen the main direction, you must subordinate all your actions to it and go ahead.
Ignoring Marketing
The sooner you start investing in advertising, the easier it will be for you to win new customers. You need to use as many communication channels as possible. If you always try one direction, you can quickly exhaust, and then spend a lot of time mastering a new one, etc. Vary them from the start.
Lack of infrastructure
Scaling comes with many challenges, one of which is infrastructure expansion. At some stage, you may need, for example, a larger office, new equipment and modern computer programs. At the same time, the absence of one of the important components can lead to a decrease in performance. Pay attention to the IT infrastructure that provides process automation, data storage and communication between employees. Artificial intelligence controls almost all work functionality today, so the company’s cyber system must be well configured and protected. Use all means to stay data driven even after you grow.
Total control & micromanagement
The fear of letting go is huge during scaling. Nevertheless, instead of controlling everything and everyone, it’s better to focus on the company’s strategic management. At the same time, appoint employees who will be responsible for the work of a particular direction. Delegate things you can’t do and especially control. So you can support the organization’s management and get first-hand information about what is happening within the team and allow them to participate and solve.
Dogmatism
Of course, long-term strategy is important for a company, but you should not treat it as a dogma. The modern market is unpredictable. Today you feel comfortable, and tomorrow you may face a crisis or a new innovative competitor. In a critical situation, you do not need to become a hostage to your own rules, simply vary and adjust them depending on the micro & macro situations.
FAQs
Why scaling is essential for startups?
Roughly speaking, scaling up allows entrepreneurs and business owners to make more money with less investment. Anyway, effective scaling is always used to boost revenue and profit margins while cutting costs.
What are some common mistakes to avoid when scaling a startup?
To avoid mistakes related to scaling like spending money on inappropriate purchases, hiring and onboarding procedures being hurried, action without preparation, operating without a brand character or style guide, fear of losing control, testing and education, collaborating with the incorrect investors, etc should be considered.
What are some financial considerations to keep in mind when scaling a startup?
Does the company’s profitability rise, stay the same, or fall? Does the effectiveness of conducting business grow, stay the same, or decline? The answers will serve as the foundation for scalability measurements in all contexts, including customer, business and finances.
Conclusion
Scalability is thought to be a crucial component of any start-up business. Scalable company concepts are beautiful to investors worldwide, who favor investing in them. But a lot of individuals in the startup ecosystem still need to understand what scalability is. So, move on to the next round of funding, invest in technology, implement a new marketing plan, evaluate current procedures, think about hiring experienced management, and make the firm self-sufficient. Overall, if done carefully and strategically, growing a team may be an excellent method to reduce risk and boost the chances of success. Learn how to scale your startup with us.
Update: 2023-05-08

Fireart Studio, an award-winning UX/UI design & product development company, has released its next product design case. This is a baggage repair service platform design case for Dolfi, a company that specializes in repairing baggage. The project activities also cover airline claims, warranty repairs, and personal cases.
Dolfi
Dolfi is a company whose deal is to operate from 5 European repair hubs. Their managers and support specialists, as well as craftsmen, help each and every client individually by using their unique resources like door-to-door services, time-proven repair techniques, etc., to solve the users’ baggage issues.
“Our task was to develop a complex seamless service for 3 groups of users.” – admits the project team.
As a result, the services for the following three groups of users were developed: Dolfi’s customers who wanted to claim their damaged baggage, accessors who received their claims and needed to elaborate them, and airlines who wanted to manage and control all the processes.
User Flow fragments
The whole digital product development process was long and included various stages of research and development. Several groups of User Personals were created during the study: The Customer side, the Assessors team, and the Airlines. Detailed User Flows based on Personas were deliberately developed to find and eliminate all the roadblocks to simplify the claiming process as much as possible.
Among the other product design artifacts, Wireframes were developed to showcase the user interface design and functionality.
Dolfi wireframe illustration
As a result, the team developed a user-friendly chat-based interface, allowing users to claim damaged luggage in a few clicks and receive monetary compensation or a new suitcase in less than 2 minutes. Now users can achieve their goals without any complicated bureaucratic procedures and endless waiting on the airline phone call lines.
App design concepts
About Us:
Fireart Studio keeps its position as a leading UX/UI design studio with a proven reputation both in Poland and expert overseas. After dealing with unusual and challenging design issues for more than ten years, the team can successfully demonstrate its top-notch software design services in any niche. They help to produce exquisite and highly functional designs for corporate companies, small businesses, and individuals who open doors for the digital world.
Fireart Studio has already managed to cater to both the giants like Google, Atlassian, Huawei, or Swisscom and the most promising startups or business newborns. The possibilities are endless, with more than 80 highly qualified IT specialists on board and years of company experience. Do not hesitate to get in touch each time you need expert design solutions for good.

Update: 2023-05-10

Lending as a service (LaaS), which is subtly complicated, has many layers, and can be frightening to approach, having no method that works for everyone. This financial services industry trend emerged around the same time with the peer-to-peer lending or white-label private lending, and is relatively new. A couple of factors to take into account whether you are a financial institution seeking for alternative distribution channels or a supplier of a digital experience looking to offer financing in using LaaS technology. We often produce finance platforms and laas may be one of them. Below you will find all you need to know about Lending as a Service and why fintech businesses often need some effective software solutions in the niche.
Investment, lending, banking, and other financial technologies from Fireart
What is LaaS?
An alternative to traditional lending is lending-as-a-service, which gives lenders the technology they need to conduct their operations online. It’s more complicated than just disbursing loans online. The financing process is streamlined and automated by the LaaS system. As a result, consumers can now obtain loans in a matter of minutes.
Lending as a service, which is any credit extension that takes place outside of a normal bank or lender channel, was one of the first popular applications of LaaS. It is the capacity to simplify and make consumable what is typically a complex financial product through new channels and integrated experiences. LaaS is merely one component of embedded finance, which also includes services like cards as a service (CaaS) and banking as a service (BaaS).
Banking as a Service (BaaS), which includes LaaS, provides financial institutions with the technology, operational support, and risk management needed to provide business loans via cloud-based third-party platforms as opposed to the traditional banking channels.
Utilizing financial technology, such as APIs, to assist lenders in making quicker, more informed loan choices is known as fintech lending. This can involve weighing loan risk using different data sources and linking digital platforms to increase the pace of data sharing.
LaaS and its possibilities
LaaS is now mostly utilized for development and test environments, websites and web applications that are accessed by consumers, data storage, analytics, and data warehousing workloads, as well as backup and recovery, notably for on-premises workloads.
LaaS solutions can transform obstacles into chances for today’s financial service providers. Financial institutions can meet growing customer expectations for quick loan origination, more individualized product offers, and seamless service by modernizing the entire loan process with the aid of a best-of-breed platform provided by a domain expert — all while remaining compliant with a growing number of industry regulations.
Benefits of LaaS
LaaS solutions can benefit financial services companies in a variety of ways. Here are the top five advantages that lenders can experience:
Reduced IT overhead
Building bespoke solutions in-house can be very expensive and need teams of scarce IT specialists, data scientists, and security experts. Lenders can spend up to 80% less on loan acquisition, decision-making, and servicing thanks to a LaaS platforms. Furthermore, because processing capability may be scaled up or down as needed, financial organizations may no longer be compelled to pay for computing resources they don’t require.
Security & compliance
More than virtually any other, the financial services business has stricter security, compliance, and governance requirements. LaaS providers create solutions with industry-standard data security and compliance in mind because they are keenly aware of industry requirements.
Faster deployments
LaaS solutions may be a quick and affordable alternative to traditional already existing methods. IT teams may easily have access to a broad range of services, all of which are controlled by their LaaS supplier and cover operations like pricing, pricing verification, and data communication.
Faster digitalization
LaaS can help change your business by integrating end-to-end lending procedures onto a single digital platform. Additionally, it gives lenders simple access to cutting-edge digital tools like AI and machine learning, which can speed up loan origination timelines by automating crucial procedures and workflows.
Wider innovation capabilities
Financial institutions may quickly implement new features thanks to LaaS, which gives them access to the newest software. In rare circumstances, low-code drag-and-drop features can even assist teams in swiftly and successfully launching complete new products, allowing them to react to market developments as they occur and offer distinctive, need-aligned client journeys.
Types of lending solutions
One of the most intricate and valuable aspects of the financial ecology is lending. It’s what advances the economy and enables corporate expansion. Opportunities are opening up as embedded finance disrupts the status quo. How your company engage in this fascinating new environment is the question. The response is that we’re only getting started. When the traditional banking system says “No,” alternative financing may be the solution. And here are some of the key types of such solutions:
Online Loans
For online loans, there are many developing internet-based lending services. Some focus on meeting the short-term capital requirements of small businesses that banks do not or cannot adequately fulfil. These loans are frequently given out without collateral. Other websites that provide term loans that can replace bank loans are referred to as marketplace lenders (also known as “peer-to-peer” lenders, though the phrase can be a bit misleading).
IP Financing
Finance backed by intellectual property is a growing subset of alternative financing. Intellectual property (such as trademarks, trade names, and patents) may have significant value that its owner may need to fully comprehend. Of course, these kinds of asset valuation can call for specific understanding. Additionally, startups and small firms could find it difficult to prove that their intellectual property is valuable on its own, distinct from the whole reputation of the business.
Cash Advances
Cash advances are occasionally given by merchants that a company does business with frequently. These loans sometimes include the borrower receiving money from the merchant in exchange for a guaranteed portion of future sales.
For instance, the business might grant a loan in return for a predetermined portion of the borrower’s daily credit card receipts. These are small-scale, short-term loans with an average period of less than a year. The average loan amount with this kind of alternative lending is often around $100,000.
Factoring
Factoring is an additional financing choice. In this case, a factor gives the company money in exchange for possession of its accounts receivable. The only assets a borrower has that are not secured by the lien of another lender may be the accounts receivable. Factors offer financing to businesses that traditional lenders won’t, as they emphasize the creditworthiness of the borrower’s consumers more than the borrower.
Hard Money Loans
Although some businesses and wealthy individuals have access to bank loans, those loans do not complete soon enough, so they borrow from alternative sources instead and repay with the money from the resulting bank loan. Different lenders may make loans based on particular assets or the total assets of an unencumbered business. Alternative lending companies frequently offer short-term finance with a very quick turnaround and loans up to $350,000. The business requests the possession of the titles to the ownership of expensive personal items, such as diamonds, vehicles, or boats, in exchange. The company stores these assets and returns them after receiving payment.
Conclusion
The expansion of an economy’s total money supply and fostering competition are made possible by loans to new enterprises. Many banks and certain retailers who utilize credit facilities and credit cards as part of their payment methods rely heavily on the interest and fees on loans as their main source of income. This landscape is rapidly changing while traditional financial institutions tighten their lending criteria; total transaction value in the alternative financing sector is anticipated to exceed.
That’s why alternative finance solutions like LaaS is a form of unorthodox lending that tries to ease the suffering of small business owners who have limited options for obtaining capital. Businesses can use LaaS to brand and customize already-existing technology as if it were their own. This financial services industry trend, which began around the same time as peer-to-peer lending or white label private lending, is relatively new but is gaining momentum in the existing global financial situation. That’s why there’s demand for LaaS apps and platfroms development and more companies focus on their possibilities and benefits with time.
As you might think, developing a lending platform is a time-consuming process that calls for meticulous research into the market and competing products as well as collaboration with highly qualified developers who will spare you from running into the issues mentioned above.
The most typical queries about launching a platform for lending are addressed below. Also, feel free to contact the Fireart team anytime for a thorough consultation.
FAQs
What are the three main types of lending?
It can be divided into three basic groups: conventional, open-end and closed-end loans, and unsecured and secured loans as per the three basic principles of lending: safety, stability, and profitability.
What is white label lending?
Similar to the home-branded goods you see in the supermarket areas, a white-label loan is effectively a home-branded loan. White-label loans strive to offer many of the same fantastic benefits as home loans with bank branding, but at a reduced cost to you, the consumer.
In recent years, supermarkets have noticed a trend in which the variety of white-label items available has grown along with the quality of those products. This pattern has persisted to the point where white-label goods are now routinely on level with or almost on par with their branded equivalents in terms of quality.
Similar to this, banks all across the world offer ‘unbranded’ mortgage products to brokers, expanding the market’s alternatives and giving customer’s access to competitive rates that can result in significant savings. In the end, it’s still a high-quality good or service; it’s just been given a new white label. White label apps are also created for these types of alternative lending solutions.
The Banking da Dock is an illustration of a white-label digital banking platform. It enables any company or organization to provide financial services by using technology in a “plug-and-play” structure and just designing the front-end with its brand.
How to create a lending platform?
Here’s how the development of a platform for lending may be organized:

Selecting a method for registering a legal entity

You must decide, in particular, whether your future business will be an LLC or a corporation. This will have an impact on the taxes that are due, how earnings and losses are allocated, and how your company should behave toward its clients if it declares bankruptcy.

Registering the name of your business

At this point, you need to register your company’s name in the state where it will operate. Check to see if the chosen name is available. You must also take into account the fact that different states may have different requirements for company formation.

Selecting a domain

In fact, you need to register your site at this stage. Make sure the name of your company is distinctive, memorable, and succinct; possibly the complete long name must be shortened.

Gathering a team of specialists

Including software developers, one of the key elements for the success of your business idea is a solid team because they are in charge of producing the goods on schedule and to the highest standards. In order to accomplish each stage of project creation, attempt to obtain the top specialists, from marketers to software engineers. Using the services of outstaffing firms makes sense if you want to save money.

Allocating the budget for the project

Since investors are typically not interested in such ventures at this early stage of development, it is preferable to immediately turn to the three Fs (family, friends, and fool) instead. These folks (often friends or family members) can provide financial assistance for you when all you have is a concept. And only then, when you already have an MVP or a product has been made available to your intended market, can you turn to business angels for assistance.

Creating and launching a platform

The final decision about a technology stack—whether it be tools for bespoke development or a pre-built platform that only requires configuration—depends on various elements, including speed to market, the need for future scaling, the necessity for cost savings in the early phases of development, etc.

End-To-End Testing

Naturally, the testing team will test your platform at every level of development. This needs to be improved, though, and your company still needs the endorsement of members of your target market before it can start operating effectively.

Support technology

Even after careful testing, initial issues will inevitably be with your platform’s functionality. You must thus work with the service team before it begins. The IT professionals that offer these services are frequently the same ones who worked on the platform’s creation. So, feel free to rely on the team.

Update: 2023-05-12