Hire an engineer or work with a studio?

Hire in-house if...

You have 18+ months of runway and a clear product vision. In-house engineers are an investment: 6 months to onboard and become productive. If you're pre-seed with 6 months of runway, you'll run out of money before they're useful.

You expect to hire 3+ engineers. The overhead of managing 1–2 engineers is brutal.

Your product is complex and requires deep domain knowledge. Healthcare, fintech, and native AI-powered products benefit from domain experts.

Cost: $100,000–200,000/year per engineer (salary + benefits + equipment + overhead). Add 30% for recruiting, onboarding, and management.

Work with a studio if...

You're pre-seed or early and need to prove product-market fit before hiring. A studio gets you to an MVP in 4–8 weeks for $20,000–60,000. You can test the market without committing to fixed costs.

You have a scoped project (a redesign, a landing page, a specific feature). Studios excel at fixed-scope work.

You want flexibility. In-house staff are inflexible: layoffs are hard and expensive.

You want ownership of the codebase. Most studios hand over the full source code. You own it.

Cost: $15,000–100,000 per project. Fixed timeline and scope.

The hidden costs of hiring

Salary + benefits are only 50% of the cost. Add: recruiting (30–40 days of executive time), onboarding (1–2 months of ramp-up time), management (5 hours/week for a CTO or eng manager), equipment ($2,000/year per engineer).

The real cost of a $150,000 engineer: $150,000 + $45,000 benefits + $20,000 recruiting + $15,000 equipment + $60,000 management overhead = $290,000/year.

That's the true fully loaded cost. Most founders think "$150,000 salary," then get a shock when it's double that.

The real cost of working with a studio

Studios charge $100–300/hour or $15,000–100,000 per project. On the surface, expensive.

But: you get a team (design, frontend, backend, QA). One in-house engineer = $100,000/year. A team of 3 on a project = $60,000/project.

Also: quality. Studios employ senior engineers. Your first in-house hire might be junior. Juniors are slower and make more mistakes.

Also: speed. A studio ships in 4 weeks. In-house? Hiring (a month) → onboarding (4 weeks) → real progress (week 8).

Also: no layoff risk.

The hybrid approach (usually best)

Start with a studio: build an MVP in 4–8 weeks for $30,000. Learn from users. Validate product-market fit.

Then hire in-house: once you raise funding ($500,000+), hire one senior engineer + one junior. They own the product and the long-term vision. The studio handles big feature builds.

The benefit: you validate before committing to staff. You hire the right person (for a proven product) instead of gambling on a hire for an unproven idea.

For most SaaS: a studio for the MVP, in-house at the growth stage.

Warning signs when contracting agencies

Warning sign: "We'll build your app for a fixed price." Translation: we'll scope-creep you or ship low-quality work to hit the deadline.

Warning sign: "We handle everything, including your business decisions." You're ceding product decisions to vendors.

Warning sign: "You won't understand the code we write." If they can't explain it simply, it's over-engineered.

Signs of a good agency: they ask 50 questions before estimating. They hand over source code and documentation. They involve you in design and specs. They're transparent about risks and timelines.