Should I hire a dev team or work with an agency?

There is no universal right answer, but the calculus has shifted a lot in the last 18 months. Here is how to think about it for your specific situation. Hire in-house when you are past product-market fit, you are going to be building this product for at least three years, you have someone technical on the founding team who can hire and onboard, and you have at least 12 months of runway after the new hire is on payroll. Work with an agency when you are pre-PMF and need to ship the next version yesterday, when you are a non-technical founder who has no idea what "good" looks like for an engineer, when the build is well-defined (a working MVP, a v2, a specific feature set), and when you do not want to be a full-time recruiter for the next three months. The cost gap matters more than people admit. A senior US engineer is around $300K year one once you add benefits, recruiter fees, and the three-month ramp. That same money buys you 18 to 24 months of agency work on a focused build. If you are not sure the product will even exist in 18 months, paying for the option-value of in-house hiring is wasted runway. The other thing in-house gives you that agencies do not: institutional memory. By month nine the in-house person knows every quirk of the codebase, every customer, every weird edge case. Agencies churn through that knowledge when the contract ends. If your product is going to be deeply differentiated through engineering, you need that institutional layer eventually. Here is the part founders miss: you can stage it. Start with an agency to ship the first usable version. Hire the first in-house engineer when you have revenue or signed letters of intent. Hand over the codebase. Do not try to bridge "no engineers" to "five-person team" in one move. It almost always fails. The worst version is hybrid done wrong: hiring one junior plus an agency, where the junior is a bottleneck that nobody trusts. Either own the build with senior in-house, or own it with the agency. Not both at the same time on the same scope. If you go with an agency, the next two questions matter more than price. First, who specifically writes the code: a senior with skin in the game, or an offshore team you will never meet. Second, what happens when the contract ends: do you get the code, the deploy access, the documentation that a future engineer can actually pick up. A practical decision tree for the next 90 days: If you have zero technical co-founder and less than $250K in cash, go agency, fixed-price, narrow scope. Do not hire. If you have a technical co-founder and you already shipped a v0 that 10 people use, hire your first engineer. Skip the agency. The product is yours to build. If you raised a seed round of $1-3M, hybrid is tempting but rarely the right call. Use the agency to ship the next milestone three to six months out, and in parallel start interviewing for engineer one to start once the contract winds down. If you are at Series A with one or two engineers who are drowning, that is exactly when an agency adds capacity without forcing another hiring cycle. The agency owns a specific feature or service. Your in-house team owns the core. The question is never agency vs. team in the abstract. It is what stage you are at, what cash you have, and what you are trying to learn next.