This Decision Costs More Than You Think
Choosing the wrong development partner doesn’t just waste money. It wastes months. Sometimes years. You end up with a codebase nobody can maintain, a product that doesn’t match what you asked for, and the exhausting prospect of starting over.
72% of custom software projects that fail cite poor vendor selection as a contributing factor. Not bad requirements. Not insufficient budget. The wrong team.
We’ve seen it from both sides. As a development agency, we’ve inherited projects from failed partnerships. The pattern is remarkably consistent.
The Red Flags That Should End the Conversation
They promise everything, question nothing. Your first meeting should feel like an interrogation, not a sales pitch. A good partner challenges your assumptions, asks about budget constraints, and tells you when your scope is too ambitious.
If they agree to everything in the first call, they’ll disagree with everything by month three. Usually in the form of change orders.
They skip discovery. If their process jumps from “sign the contract” to “start coding,” run. Discovery exists to prevent expensive mistakes.
An agency that skips it either doesn’t know better or plans to charge for the mistakes later.
They can’t show previous work. Confidentiality covers some projects. It doesn’t cover all of them. If they can’t walk you through a single case study, anonymized or otherwise, that tells you something.
Ask about projects that went wrong. Every honest agency has them. How they handled failure tells you more than their portfolio of successes.
Their price is suspiciously low. Custom software development in Western Europe costs EUR 100-150/hour for experienced teams. If someone quotes you 40% below market rate, ask yourself why.
Either the team is junior, the estimate is unrealistically optimistic, or they plan to charge for everything “out of scope” later. Cheap development is rarely cheap. We wrote about this in detail: the hidden costs of cheap software development.
The Green Flags Worth Looking For
They help you scope before they sell. Good agencies invest time understanding your problem before proposing a solution. A paid discovery workshop (EUR 5,000-15,000 for 2-4 weeks) is a strong signal.
It means they’d rather get the scope right than close a deal fast.
They work in short iterations. Two-week sprints with demos after each one. You see working software every two weeks, not a final delivery after four months.
This protects you. If something goes wrong, you find out in week 2, not month 6.
They own the full lifecycle. Architecture, development, testing, deployment, maintenance. If they build it but someone else has to deploy and maintain it, you’ll spend months dealing with handoff friction.
They’re honest about trade-offs. “We could build this, but a SaaS tool would serve you better for this function.” An agency that talks you out of unnecessary custom development is one you can trust.
They have a clear communication process: weekly status updates, a shared project board, defined escalation paths. Ask what happens when something goes wrong. The answer should be specific, not vague.
Ten Questions to Ask Every Candidate
Not all questions are created equal. These ten separate the experienced from the pretenders.
- Walk me through your discovery process. What does it produce?
- Show me a project that went over budget. What happened and how did you handle it?
- Who will actually work on our project? Can I meet them?
- How do you handle scope changes mid-project?
- What’s your approach to testing and quality assurance?
- How do you handle project handoff if we part ways?
- What happens after launch? What does ongoing support look like?
- What technology stack would you recommend for this project, and why?
- Can you provide references from clients with similar project sizes?
- What’s your process for estimating project cost and timeline?
Pay attention to how they answer, not just what they say. Vague answers to specific questions are a red flag.
The Evaluation Matrix
Score each candidate on a 1-5 scale across these dimensions:
- Technical competence (demonstrated through case studies and technical discussions)
- Communication quality (responsiveness, clarity, proactiveness during the sales process)
- Process maturity (discovery, sprints, testing, deployment, documentation)
- Cultural fit (do they work the way you work? timezone, language, collaboration style)
- Pricing transparency (clear estimates, honest about what’s included and excluded)
- Post-launch support (maintenance plans, SLAs, availability)
Total the scores. But weight them based on what matters most to you.
A startup that needs speed should weight communication and process higher. A regulated business should weight technical competence and compliance experience higher.
Offshore, Nearshore, or Local?
The cheapest option isn’t always the best value. And the most expensive isn’t always the best quality.
Local agencies (same country) offer the easiest communication, cultural alignment, and legal simplicity. They also charge the most. German developers average EUR 90-150/hour.
Nearshore (Central/Eastern Europe) delivers 35-50% cost savings with minimal timezone friction. Poland, Romania, and the Czech Republic have strong engineering talent. Rates average EUR 50-70/hour.
Offshore (Asia, South America) offers the lowest hourly rates but adds communication overhead, timezone challenges, and sometimes quality variance. For well-defined projects with clear specs, it can work. For complex projects requiring close collaboration, the hidden costs often negate the savings.
Our recommendation: for your first custom software project, prioritize communication quality over cost savings. You can optimize for cost on future projects once you’ve learned what matters.
After You Choose: The First 30 Days
The first month sets the tone. Here’s what good partnerships look like in week one.
A kickoff meeting with all stakeholders, shared access to project management tools, a clear timeline with milestones. Defined communication cadence, minimum weekly syncs.
If your agency goes silent for two weeks after signing the contract, that’s not “ramping up.” That’s a warning sign. For more on what to expect, read our guide on the first 90 days working with a dev agency.
For the broader picture, our complete guide to custom software development covers the entire process from requirements to launch.
Looking for a development partner? Let’s start with a conversation. We’ll tell you honestly whether we’re the right fit for your project, and if we’re not, we’ll point you in the right direction.
