The Cost of Setting Up a Remote Software Development Team in India: A Practical Guide for Non-Tech Founders in the UK and Australia

For non-tech founders embarking on the journey of building a software product, the question of where to set up a software development team often arises. While setting up a team locally in Australia or the UK might seem like the obvious choice, the significant cost advantage of setting up a team in India cannot be overlooked. However, it’s not a one-size-fits-all solution, and the decision ultimately depends on your specific business needs, the complexity of your software, and the stage of your startup.

This white paper provides a practical guide to understanding the cost-benefit analysis of setting up a remote software development team in India compared to hiring locally in Australia or the UK. We’ll also explain why owning your team (rather than outsourcing) is a superior approach and how Fika can guide you through this process.

Why India?

India has become a global hub for software development, thanks to its strong focus on engineering education and a large pool of talented developers. Companies like Google, Microsoft, and countless others have set up their development centers in India, leveraging this expertise.

Key Advantages:

Cost-Effectiveness: The cost of hiring software professionals in India is significantly lower than in Australia or the UK.
Talent Availability: India produces millions of engineering graduates annually, providing a deep pool of talent.
Quality: Contrary to the myth that lower cost equals lower quality, we found the talent to be the same everywhere, if you know what to look for. The lower cost is simply a result of the economic disparity between India and the west.

Owning Your Team vs. Outsourcing

While setting up a remote team is advantageous, it’s important to avoid traditional outsourcing models. Outsourcing involves a middleman, which means the team is not truly yours. This often leads to misaligned goals, lack of ownership, and reduced efficiency.

Instead, we recommend hiring a Fractional CTO through Fika to guide the setup of a dedicated team. This approach ensures:

• Direct reporting and supervision.

• A strong alignment with your company’s vision.

• A collaborative work environment between the team and the founders.

The Essential Team Structure

Developing software isn’t just about hiring a couple of developers. To create a production-ready product, you need a well-rounded tribe—a team with all the essential skills. This typically includes:

Product Manager: To manage requirements and prioritize tasks.
UI/UX Designer: To create intuitive and attractive designs.
Developers: At least three to four developers to ensure adequate coding bandwidth.
Tech Lead: To oversee technical decisions and architecture.
QA Engineer: To ensure the product is tested thoroughly before release.

Cost Comparison: Australia vs. India

If you hire two full-time developers locally in Australia, you would spend at least $150,000 per developer annually, totalling $300,000 for just two developers. While two developers may seem like a sufficient start, this approach often overlooks the need for additional critical roles such as a Product Manager, UI/UX Designer, Tech Lead, and QA Engineer—roles that are essential for building a production-ready software product.

In contrast, for the same $300,000, you could set up a complete tribe in India. This tribe would include all the critical roles—a Product Manager, UI/UX Designer, 3-4 developers, a Tech Lead, and a QA Engineer—providing you with a full-stack team capable of turning your vision into a viable product.

This structure not only ensures that your product is developed efficiently but also offers better value for your investment, especially for an early-stage lean startup.

The Case for a Lean Startup

In the early stages of a startup, the focus is on rapidly building and iterating the product. This requires a cost-effective yet high-quality team, which is why a remote team in India is often the best choice. For the same budget that would hire two developers locally, you can build a complete tribe in India with all the essential roles covered.

Why Fika?

Fika simplifies the process of setting up a remote team in India. By providing a Fractional CTO who understands your vision and handles the complexities of team setup, Fika ensures you get a dedicated, high-quality team that works directly for your company—not through an intermediary.

Conclusion

While there’s no universal answer to whether you should set up a software development team locally or remotely, the cost advantage of building a team in India is clear. With the right guidance and team structure, your startup can gain a competitive edge without compromising on quality.

Fika’s Practical CTO Service can help you navigate this process, ensuring your team is aligned with your goals and positioned for success.