When taking a new product from the idea phase to the manufacturing phase, prototyping is essential to your business’s success. While it is cheaper than launching a product that ends up being a failure, it is still a time-consuming process. Creating a prototype is also not cheap, and may require multiple iterations before you have a finished product.

Due to the time and expense, you might be considering outsourcing. Many companies, such as Plethora, specialise in designing prototypes for other companies, producing them at high quality yet in short order.

The decision whether to create your prototype in-house or not comes down to numerous factors, and we will look at the benefits and risks associated with both.

In-House Prototyping

Pros

When you decide to prototype in-house, it gives you a lot more flexibility than you would normally have. If you come up with a new idea or new concept you wish to try out before your first prototype is finished, it is easier to pivot with an in-house team than an outsourcer. Communicating shifts in priorities or new data is also much easier when you can walk up to the person leading the project and inform them of the changes.

Prototyping in-house also helps in terms of quality control with the prototype. While there might be multiple eyes on the design already, a contractor only knows what they’re given. Only you and your team understand the vision fully, and a contractor might not catch a mistake in the design that your team is unaware of.

Cons

The biggest con to working in-house is the cost. While you might think of your employees as a sunk cost, remember that having them work on the prototype is an opportunity cost. Time spent developing the prototype is time they cannot spend on anything else.

The opportunity costs associated with in-house prototype means that to meet other business obligations, in-house prototyping may require you to hire additional personnel. The costs associated in locating, recruiting, training, and equipping these new employees is not trivial, and can quickly add to your prototyping costs. It also does not help that the skills you need in the prototype phase might not be needed in the final stages. This could very easily leave you with redundant staff and equipment.

Outsourced Prototyping

Pros

One of the major benefits to outsourcing your prototyping is in the cost. You reduce the opportunity costs for your business, allowing your team to focus on the design, research, and marketing aspects. This can take an enormous burden off your team, especially important if you are running a small startup with less than a dozen employees on the payroll.

Another benefit is in turnaround time. Outsourcers who specialize in prototyping are primarily concerned with delivering the best product possible in the shortest amount of time. They would have optimized techniques and processes exclusively for this single business function, meaning they are likely to get a prototype delivered faster than you could hope to accomplish in-house.

Cons

Communication is likely to be a major con. Being contractors, once they get the specifications you send it is harder for them to change the job on the fly. Furthermore, attempting to change the project due to shifting demands may incur additional costs if the contractor has already started work. This con can be especially troubling if you catch a mistake in your design after the contractor has already completed work.

Working Around Your Needs

As with any other business decision, the choice around whether to prototyping in-house or outsource comes down to the unique needs of your business. Some companies can dedicate the time and resources to an internal prototyping team, and might even be capable of supporting this team full time. For most smaller businesses attempting to get their one big idea off the ground, however, outsourcing is typically the better option.

By understanding the pros and cons of each option, you can select the best option to fit the needs of your business.