Should Founders Build or Buy UX Expertise for Their Product?

When deciding between building an in-house UX team or hiring external experts, here’s what you need to know upfront:

• Internal Teams: Better for long-term projects, deep product knowledge, and frequent updates. Costs range from $90,000–$160,000 per designer annually (plus overhead). Time to hire and onboard is about 3–6 months.

• External Partners: Great for quick timelines, diverse expertise, and short-term or milestone-based projects. Costs range from $8,000–$100,000 per project or $4,000–$15,000 monthly retainers. They can start immediately or within 2 weeks.

Quick Comparison

Key takeaway: Choose internal teams for ongoing UX needs and alignment with company goals. Opt for external partners when speed, flexibility, or specialized skills are priorities. For many, a hybrid approach - starting with external experts and transitioning to an internal team - offers the best of both worlds.

Why Junior UX Designers Can’t Get Hired - And What To Do

1. Internal UX Teams

Creating an in-house UX team is no small feat - it demands a significant financial and strategic commitment. Recent trends show a shift in hiring patterns, with UX job postings in 2023 dropping to just 70% of what they were in 2021.

Cost Considerations

Building an internal UX team involves more than just paying salaries. Here's a breakdown of the typical annual costs:

While these investments can lead to twice the growth rate, the upfront setup can delay your time to market.

Team Structure Impact

How you organize your UX team can greatly influence its efficiency and output. Here’s a look at three common structures:

"High performance demands smart, sustainable work and robust communication".

Choosing the right structure not only impacts team workflows but also plays a key role in attracting and retaining top UX talent.

Talent Acquisition Reality

Globally, there are over 2 million UX professionals, giving companies a vast pool to draw from. Key skills to look for include critical thinking, creativity, strong communication, and business acumen. Companies that offer remote work, professional development opportunities, and competitive benefits are better positioned to attract top-tier talent. These perks also help reduce turnover - important when replacement costs can run between $4,000 and $5,000 per hire.

Hidden Costs and Benefits

Beyond the obvious expenses, in-house teams often deliver benefits like reduced communication barriers, faster iteration cycles, and better alignment across projects. These advantages can lead to stronger product outcomes. However, managing an internal team requires vigilance to avoid burnout, which tends to occur every 6–9 months. Striking the right balance is critical to maximizing the potential of your in-house UX team while preparing to weigh these factors against the pros and cons of working with external UX partners.

2. External UX Partners

Did you know that more than 68% of companies outsource some part of their design process? This trend highlights the growing appeal of external UX partnerships compared to in-house teams, which often demand higher upfront investments and longer onboarding times.

Cost Structure and Investment

When it comes to pricing, external UX partners typically operate under three models:

Addressing design issues during the development phase can cost up to 100 times more than fixing them early in the design process. While cost is a factor, the expertise and goal-oriented methods provided by external partners often justify the investment.

Expertise and Innovation

Expertise is where external UX partners truly shine. For instance, 88% of online consumers say they won’t return to a website after a poor user experience. This makes specialized knowledge and innovative solutions critical for success.

Project Timeline Impact

External partnerships can significantly streamline development timelines by leveraging:

• Dedicated Focus: Teams are fully committed to your project.

• Cross-Industry Knowledge: Proven solutions drawn from diverse industries.

• Pre-existing Workflows: They come prepared, eliminating the onboarding delays common with in-house teams.

Real-World Success Stories

Consider this: a mobile banking startup accelerated its app launch by collaborating with an external UX team. Similarly, an AI marketing startup achieved impressive results by partnering with a specialized agency. These examples highlight the tangible benefits of working with external experts.

Quality Assurance and Communication

Effective communication and strict quality control are the pillars of successful external partnerships.

"Project Management helps glue the many moving parts of a project to a shared understanding of what gets done, when, and by who. Without project management, such things may be compromised."

To ensure smooth collaboration and high-quality outcomes, external UX partnerships should incorporate:

Here’s a compelling stat: every $1 invested in UX can deliver a $100 return. This kind of return on investment underscores why external UX partnerships are a smart strategic choice for businesses aiming to enhance user experience and drive results.

Direct Comparison

When deciding between building an internal UX team or working with external specialists, the choice hinges on several important factors. Here's a breakdown of how these two approaches compare across key areas.

Core Differences

These differences highlight how each option impacts scalability and product strategy in unique ways.

Scalability Impact

Scalability is a critical factor for product development. While internal teams may face limits due to hiring and training constraints, external partners offer the ability to scale quickly. For instance, Alibaba outsourced its development in 1999 to achieve rapid growth, which eventually contributed to its $570 billion valuation.

Cost-Benefit and Implementation Analysis

Internal teams come with fixed costs, regardless of workload, but they provide stronger retention and alignment with company goals. Building an internal team also requires investment in tools, training, and benefits, but it helps develop long-term organizational knowledge.

On the other hand, external partners bring speed and flexibility, offering:

• Pay-as-you-go flexibility: No ongoing overhead costs.

• Diverse expertise: Access to a wide range of skills and perspectives.

• Faster delivery: Pre-established workflows enable quicker project completion.

"It's nearly impossible to say whether it's more cost-effective to hire in-house designers or engage with a UX agency."

Expertise Access

Cost and speed are important, but the depth and breadth of expertise also differ significantly between these two approaches.

Both options come with their own strengths. The right choice depends on your company's unique needs, the complexity of your product, and your long-term strategic goals.

Making the Right Choice

Deciding between building an in-house UX team or working with external experts depends on several factors. These go beyond just cost and timeline considerations, helping you refine your overall strategy.

Evaluate Your Investment Capacity

Your budget plays a major role in this decision. If your organization allocates less than 9% of revenue to marketing, external expertise might be the smarter choice. On the other hand, businesses investing over 15% may find it more practical to establish an internal team. The key is aligning your investment with your operational capabilities.

Assess Product Complexity and Timeline

Your product's demands shape the next set of criteria. Here's how to weigh your options:

Consider Your Growth Stage

If you're in the early stages of building your company, external experts can help you move faster and keep costs low. For instance, companies spend about $10,000 to $25,000 annually on software maintenance, making external partnerships a good fit during the validation phase.

Evaluate Long-Term Impact

User experience isn't just a nice-to-have - it's a revenue driver. Companies that prioritize design see 56% higher revenue on average. At the same time, 32% of customers will abandon a brand after just one poor experience. Whether you go internal or external, maintaining consistent, high-quality UX is crucial.

Match Resources with Requirements

Your decision should align with your immediate needs and future scalability:

• For Immediate Deployment: External partners can provide quick access to expertise without the $4,000 average cost of hiring a new employee. This is especially helpful for short-term projects or when you need specialized skills.

• For Long-Term Development: Building an internal team makes sense if you need ongoing UX support. Training costs, which range from $1,000 to $3,000 per employee annually, can be a worthwhile investment for better control and cultural alignment.

• For a Balanced Approach: A hybrid model can be effective. Start with external experts for your MVP (minimum viable product) and gradually build an internal team. This ensures you meet current demands while preparing for long-term growth.

FAQs

What should founders consider when choosing between building an in-house UX team or outsourcing to external experts?

When weighing the choice between building an in-house UX team or outsourcing to external specialists, it's essential to evaluate factors like budget, control, and expertise. An internal team often requires a larger long-term financial commitment due to salaries and benefits. However, it gives you more direct control over the design process and fosters easier collaboration with other departments. On the flip side, outsourcing can be a more affordable option for short-term projects, while also granting access to specialized skills and diverse experience that might not exist within your organization.

You should also consider timeline and scalability. External agencies can often deliver results more quickly by dedicating resources right away, whereas internal teams might encounter delays due to existing priorities. For projects with shifting demands, outsourcing offers the flexibility to scale resources up or down as needed. In contrast, in-house teams may find it harder to adjust to changing requirements. The final decision should align with your product goals, deadlines, and the overall user experience you aim to deliver.

How can a company successfully combine in-house and external UX expertise?

To bring together in-house and external UX expertise effectively, it's crucial to start with clear goals and well-defined roles for each team. Make sure both groups are on the same page regarding project objectives, and prioritize open communication to encourage smooth collaboration. Tools like project management software can be a great way to track progress and ensure everyone stays aligned.

It's also important to regularly assess the contributions of both internal and external teams. This helps confirm that the combined approach is achieving your product and user experience goals. By leveraging the unique strengths of each group, businesses can streamline their UX design process and make it more impactful.

What are some hidden costs and benefits of having an in-house UX team that founders should consider?

Building an in-house UX team brings both challenges and opportunities, some of which might catch you off guard. On the expense side, you’ll need to account for salaries, benefits, training, and equipment - costs that can quickly escalate beyond what you initially planned. Plus, employee turnover can throw a wrench into your operations, requiring time and money for recruitment and onboarding, which could slow down projects and stretch budgets even further.

That said, the advantages of an in-house team can be game-changing. These team members gain an intimate understanding of your product and work seamlessly with other departments. This synergy often results in designs that are perfectly aligned with your business objectives and your users’ needs. Moreover, having a dedicated team allows for quicker iterations and steady improvements based on user feedback, keeping your product sharp and focused on delivering a great user experience.

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