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I am trying to create a web and mobile application. But I am confused between hiring developers or just outsourcing the project.
Some people say it's better to outsource your project, but when I search about other companies like Facebook for example, they have hundreds of developers. Why they didn't outsource their project?
What is the key factor that makes it better to outsource a project instead of hiring developers?
If it’s a core business function — do it yourself, no matter what.
There's a wonderful essay written by Joel Spolsky called In Defense of not Invented Here Syndrome. I'll quote some of it here.
Indeed during the recent dotcom mania a bunch of quack business writers suggested that the company of the future would be totally virtual — just a trendy couple sipping Chardonnay in their living room outsourcing everything. What these hyperventilating “visionaries” overlooked is that the market pays for value added. Two yuppies in a living room buying an e-commerce engine from company A and selling merchandise made by company B and warehoused and shipped by company C, with customer service from company D, isn’t honestly adding much value. In fact, if you’ve ever had to outsource a critical business function, you realize that outsourcing is hell.
And it sounds like your website is entirely based on introducing cutting-edge, new features that no one else has. If you want to do that well, then you do it in-house.
And these principles and examples make sense intuitively. If a contractor could sell Apple's vision and direction, or Google's scalable technologies, or Salesforce's PR, well, that contractor would make more money just by being their own company.
But DDP that sounds hard and expensive.
Creating a successful business is hard and TANSTAAFL. That's why I don't do it.
I'll edit this answer to add one point.
Outsourcing can be fine as a short term measure, but any broad aspects of your customer's experience that are reliant on outsourced labor should be considered weaknesses that need to be addressed with appropriate levels of priority. Here are some examples when it's probably ok to trust a 3rd party.
It's mainly about the stability/ duration of your needs. If you know you will need a full-time person to work for you over the next years, it frequently makes sense to employ one. By employing someone directly your initial cost is higher. It includes onboarding, providing the person resources such as a laptop, etc. But the cost pays out when the person turns productive. You have a specialist on board and control over them.
If the amount of work is to vary significantly, for example you just need someone for a 4-month project, it frequently makes sense to outsource it since then you are more flexible. If done correctly, the initial costs will be lower. You just pay for what you get.
However, it's difficult to answer your question about employment-oursourcing in a general way since there are additional factors to be considered. These include the availability and cost of labor in your area, the labor legislation (e.g. is it possible to employ someone for just a day/week?) and also what kind of outsourcing you mean. For example, in Europe many companies are currently outsourcing to Asian countries. While this works in some cases, it frequently also impacts on the quality because of the cultural differences and coordination issues.
In some comments, the OP has stated that
I have no experience and idea about the project development needs after it successfully launched.
and
this is my first experience and don't know having such website application will need what requirements in future(after it launched successfully)
As a first time entrepreneur, you might think that you finish building a website and then start collecting money. That isn't how it works. Except for some very special occasions (when specifically the website has a finite lifespan tied to something else - like the launch of a new product, a countdown to some specific event, etc.) you are never finished building a website.
Every day you will need to tweak something, fix a bug, add a new feature, etc., so unless you are prepared to have a permanent engagement with the outsourcing firm, at a minimum, you'll need to have the in-house talent sufficient to take over the project once the outsourcing firm delivers the initial version to you.
From somebody who has done both:
Don't outsource to save money. Do it because you need more talent than you can find in your own location.
Outsourcing requires remarkable clarity on what you want, and it requires communicating that clear vision, by documents, talks, explanations.
If you outsource you need a strong product manager to keep in constant touch with your development team. In Agile parlance, you need a daily scrum, and the product owner needs to participate (conference call, skype) pretty much every day for the first year or so you work with your contractors.
You should plan on visiting your contractors at least once in the first year, That's easy if they're a job shop in the next town over, and hard if they're in Asia. But you have to do it, to get a good quality product.
Outsourcing gives you less control and even less knowledge of the people usually.
The big advantage is cost and if you don't have enough ongoing work to keep full time devs productive.
So the bigger the company and product line, the more sense it makes to do inhouse.
Things like product or information security are factors as well. Handing your product to unknowns is a leap of faith. If it gathers client information or anything like that it's also best to do inhouse.
I'd say only outsource if you have a very clear definition of what you want, so you can give them a specification, and you can both see and agree when it's done.
If you don't have this, you'll spend more time haggling over whether something is a bug (i.e. already paid for) or an enhancement (i.e. more money) than on actual work.
Another option is a contract worker, where you pay for an agreed number of weeks or months instead of by the feature. That way you don't have to worry about making an employee redundant at the end of the project.
My take is this:
The main argument for outsourcing is that you don't have to take on staff, which is a long-term investment. If you do a one-off software development thing, you probably want to outsource, because those developers wouldn't have anything to do afterwards (most of them, you'll probably need one for bugfixing and updates).
The main argument for in-house development is that you get to keep all the expertise and knowledge that was built during the development and can leverage it to other projects. I'm not talking about coding skills, but domain know-how, business understanding, etc. It also means all that knowledge stays in the company, which can be a factor if you have any trade secrets or other protection-worthy know-how involved. Yes, you can sign NDAs, but even if they don't intentionally blab about it, the external developers will use their gained knowledge in the next project, and that could be for your competitor.
Insourcing is also the correct decision if you need to be sure that you can still update and support that software some years down the road. There are so many pieces of software out there which are now unmaintained or badly maintained by someone who barely understands what they do simply because the original developer went bancrupt, or to retirement or the contract was simply over.
What Kilisi and BigMadAndy said, but it's worth considering another angle.
If you're involved in a product that will have a warranty and customer support period, it makes sense to have people in house who are familiar with the development and can suggest solutions. If you're planning a version 2.0, in house development will save you time teaching a [possibly new] external provider about version 1.0.
If you can consider a job completed the moment development ends, external sourcing makes sense. If you're thinking longer term, in house is the way to go.
