5 Mistakes Founders Make When Hiring a Software Company (and a Checklist to Avoid Them)

I run a software company, Creuto, so I know this decision from the other side of the table. This post is not about which company to pick. It is about the mistakes that lead founders to pick the wrong one. If you avoid these five, you are already ahead.

1. Choosing the lowest price

Price matters, especially when you are early. But the lowest quote is often low because something is missing: testing, design, project management, or support after launch. A cheap build that has to be rebuilt costs more than a fair one built once.

What to do: Ask each company what is included in the price. Compare the scope, not only the number. Ask what happens after launch, and which changes cost extra. Our guide to fixed price vs time and materials explains how different pricing models change what you pay for.

2. Not checking real past work

Many founders choose based on a good website and a friendly sales call. A website shows how a company wants to look. Past work shows what it can do.

What to do: Ask for two or three projects similar to yours. Open the apps or websites yourself. Ask to speak with a past client. Then check the company’s profile on a directory. On Edverise, you can browse software development companies by service and read each company’s profile before you reach out.

A note: I run Edverise, so take this as my own recommendation. Compare more than one directory, and trust your own checks most.

For an example of what to look for, our custom ERP case study shows the problem, the approach and what was delivered, which is the level of detail you should expect from any team you shortlist.

3. Starting without a clear scope

If you say “build me an app like this one”, every company will imagine something different, and the price will change later.

What to do: Write a one-page brief. Include who the users are, the main five to ten features, what must be ready for launch, and what can wait. A short, clear brief gets better quotes and fewer surprises. Then start with a small first version, called an MVP, and add more once real users give you feedback. If you want to go further, our guide on how to write a PRD turns that brief into a full requirements document.

4. Ignoring communication and the team

You will work with this team for months. Strong sales talk and weak daily communication is a common mix.

What to do: Ask who will actually work on your project, how often you will get updates, and who your single contact is. Ask how they handle time zones, changes, and bad news. If you can, start with a small paid discovery phase before you sign the full contract.

5. Forgetting ownership and life after launch

Founders often forget to ask who owns the code, the design files, and the accounts, such as the app stores, cloud and domain. They also forget that software needs fixes, updates and security work after launch.

What to do: Make sure the contract says you own the code and all accounts, and ask for documentation. Agree on a support plan and a monthly maintenance cost before you start. Have a lawyer check the contract.

A 10-point checklist before you sign

1. A written scope, and what is included in the price.
2. Two or three similar past projects that you opened yourself.
3. A call with at least one past client.
4. Named team members and one point of contact.
5. A fixed update schedule, such as weekly.
6. Payments tied to milestones, not everything upfront.
7. Code and accounts owned by you.
8. A support and maintenance plan after launch.
9. A clear process for changes and extra costs.
10. The company’s profile checked on a directory.

Want the questions to ask on each call? See how to choose a software development company: 12 questions.

Final thoughts

Choosing the right software partner is mostly about asking the right questions before you sign. Check real work, write a clear brief, look closely at communication, and agree on ownership and support.

If you are comparing companies, you can start with the vendor list on Edverise. If you are building a product and want a second opinion on your plan, get in touch with me.

Nihar Ranjan Rout is the Founder and CEO of Creuto, and also runs Edverise, a platform for finding technology companies.