Your own development team or an agency?
The basic rule is simple: build an in-house team when the digital product is the business itself, and hire an agency when the product supports the business. An agency delivers from week one; an in-house team often takes a year to build. Many choose the hybrid: an agency as a start, with gradual handover to a growing internal team.
The question is bigger than a single hire: should software development be a core competency in your company, or something you buy? The answer shapes organization, budget, and pace for years. Here’s the reasoning that leads to the right answer.
The strategy rule: is the product the business – or does it support the business?
The most useful rule of thumb reads: build in-house when the digital product is the business itself, hire an agency when the product supports the business.
If you’re a SaaS company or a digital service, the product is your competitive advantage. Then the learning about users, technology, and domain should accumulate within your own company – over time, an in-house team is both strategically and economically the right call.
If the product supports the core business – a customer portal for a logistics company, an app that complements physical retail – development is rarely what you should aim to become the best in Sweden at. Then you buy the capability and put your own energy into client-side competence: knowing what to build and why.
The time factor: the agency delivers week one, the team takes a year
An established agency comes with a ready-made team, established processes, and breadth of expertise – development, design, architecture – from the start. An in-house team is built person by person: hires take three to six months each, the first developer is alone and vulnerable, and the group needs time to find its working rhythm. Going from zero to a functioning team of four or five people often takes, in practice, a year.
If the product has a market window, that year is expensive. Many companies lose more from a delayed launch than they save on a lower hourly cost.
The economics: fixed cost vs. variable
A team of four developers, using the 1.5x rule, often costs SEK 4–5 million a year – regardless of whether you’re building at full tilt or mostly maintaining. The agency cost is variable: you pay for what’s ordered and can scale up and down between quarters.
The rule of thumb follows utilization. With continuously high development demand, the in-house team becomes cheaper per hour. With uneven or uncertain demand, the agency becomes cheaper overall, since you avoid paying for unused capacity. Also factor in what rarely shows up in the calculation: recruitment, management, tools, and the cost when someone leaves.
The hybrid model: agency as the start, in-house team as the goal
For growing companies, the choice is rarely either-or. A proven path:
- The agency builds version one and provides speed, breadth, and architecture.
- You recruit at a steady pace – often a product owner first, then developers.
- Gradual handover: a shared codebase, pair programming, and documentation until your team owns day-to-day work.
- The agency scales down to specialist input and peaks instead of full ownership.
Set requirements for the agency already in the contract: standard technology, continuous documentation, and no lock-in. An agency that builds with handover in mind is the right partner for this model. Also set a timeline for the handover with defined steps – otherwise “gradual” ends up being another word for never.
Scenario: two companies, two right answers
A logistics company builds a customer portal that streamlines bookings. The portal supports the business but isn’t the business – the company chooses an agency plus a maintenance contract and keeps a client-side role internally. The right call.
A startup builds a consumer app that is the entire business idea. They let an agency build the first version to reach the market in time, recruit in parallel, and take over development after a year. Also the right call – the rule just pointed in a different direction.
One-minute decision support
- Will development be your core competency in three years? If yes: start building the team now, possibly with an agency as a bridge.
- Can you recruit, lead, and retain developers? If no: buy the capability until you can.
- How fast do you need to deliver? A window of months points toward an agency.
- Can you absorb SEK 4–5 million in fixed annual cost? If no: keep the cost variable.
At Weapp, we work across all three setups – full-service vendor, reinforcement for internal teams, and a bridge in the hybrid model. Want to talk through which fits you? Get in touch.
Frequently asked questions
How many people does an in-house development team need?
A robust minimum is three to four developers plus access to design and product leadership. A single developer isn't an organization but a point of risk – with illness, vacation, or resignation, the product stalls and all the knowledge sits in one head.
What does an in-house development team cost per year?
With the rule of thumb that an employee costs about 1.5 times their salary, a team of four developers often lands at SEK 4–5 million a year, before management, tools, and recruitment costs. The cost is fixed and runs regardless of how much you actually build.
Can an agency and an internal team work together?
Yes, it's a very common setup. The internal team owns the product and day-to-day development, while the agency adds specialist expertise – design, architecture, AI – or extra capacity during peaks. Clear ownership of the codebase is the key.
How long does it take to take over a product from an agency?
With good documentation and a planned overlap period, an internal team can take over within a few months. Without documentation, or if the handover happens abruptly, it takes considerably longer. Agree on the handover when the agency collaboration begins, not when it ends.
When is it the wrong call to build in-house?
When the need swings sharply between quarters, when you lack the ability to recruit and lead developers, or when the product supports the business rather than being the business. Then an in-house team locks in fixed cost without creating equivalent strategic value.