When to Hire a Product Design Agency vs In-House Designer for Your SaaS

You’ve validated your SaaS idea. You have some funding or revenue. Now you need someone to design your product. The question every founder faces: should you hire an in-house designer or work with a product design agency?

This isn’t just a hiring decision. It’s a strategic choice that affects your timeline, budget, product quality, and ability to scale. Get it wrong and you’ll either burn cash on talent you don’t fully utilize or end up with a product that looks amateur compared to competitors.

This guide breaks down exactly when each option makes sense, what the real costs look like, and how to make the right choice for your specific stage and situation.

The Core Difference Most Founders Miss

An in-house designer and a product design agency aren’t just different price points. They’re fundamentally different resources solving different problems.

An in-house designer is a team member who lives inside your product daily. They understand your users deeply, evolve the product iteratively, and align perfectly with your long-term vision.

A product design agency is a specialized team that brings cross-industry experience, complete design systems, faster execution on defined projects, and the ability to scale resources up or down.

The mistake? Treating them as direct substitutes. They’re not. Each excels in specific scenarios and fails in others.

When a Product Design Agency Makes Perfect Sense

You’re Building Your First Version (Pre-Product or MVP Stage)

If you don’t have a product yet, an agency is almost always the right choice.

Why agencies win here: They’ve built dozens of similar products and know exactly what works. They can move from concept to designed MVP in 4-6 weeks instead of the 3-4 months it takes to hire, onboard, and ramp up an in-house designer.

You get a complete team (UX designer, UI designer, sometimes researcher) for the price of one senior hire. They deliver everything you need to start development without you managing the design process.

Real scenario: You’re a non-technical founder with €50,000 in pre-seed funding. You need designs for your MVP in 6 weeks to give to developers. An agency can deliver complete, developer-ready designs. A single in-house designer would still be ramping up.

You Have Specific, Time-Bound Projects

Maybe you already have a product but need a major redesign, a new feature set, or a complete rebrand.

Why agencies win here: They can dedicate 2-3 designers to your project for 8-12 weeks, then you’re done. No long-term commitment, no overhead when the project ends.

You’re not paying salary, benefits, and equipment for a full-time role when you only need intensive design work for a quarter.

Real scenario: Your SaaS has been live for a year with functional but ugly design. You’ve raised Series A and need to completely redesign the product to compete. An agency can deliver this in 10-12 weeks with a dedicated team.

You’re Pre-Revenue or Early Revenue (Under €20K MRR)

At this stage, every euro matters. You can’t afford to pay a senior product designer €60,000-€80,000 per year when you’re not even sure what features will stick.

Why agencies win here: You pay only for what you need. €25,000-€40,000 gets you complete MVP designs. Then you pause the relationship until you need the next phase.

No ongoing salary costs, no benefits, no management overhead. You stay lean while getting professional design work.

Real scenario: You have €100,000 runway. Hiring a full-time designer at €70,000/year (including costs) eats 70% of your runway. An agency project at €30,000 leaves you capital for development and marketing.

You Need Specialized Expertise You Can’t Hire Full-Time

Maybe you need motion design for your product videos, illustration for your brand, or specialized UX research for a complex workflow.

Why agencies win here: Good agencies have specialists on staff. You get access to motion designers, illustrators, researchers, and brand designers without hiring each one individually.

Real scenario: You’re building a fintech product and need someone who understands regulatory compliance UX patterns. An agency that specializes in fintech brings that expertise immediately.

You Don’t Have Design Leadership in Place

If you’re a technical or business founder and don’t know how to evaluate, manage, or direct a designer’s work, hiring in-house is risky.

Why agencies win here: They manage themselves. They come with processes, quality control, and experience knowing what questions to ask you. You don’t need to figure out design sprints, critique sessions, or tool workflows.

Real scenario: You’re a solo technical founder. You’ve never managed a designer. An agency asks the right questions, presents options, and delivers work without you needing to understand Figma or design systems.

When an In-House Designer Makes Perfect Sense

You Have Product-Market Fit and Steady Revenue (€30K+ MRR)

Once you’re past the initial validation phase and have paying customers who use your product daily, the calculus changes completely.

Why in-house wins here: Your product needs constant iteration based on user feedback, analytics, and evolving features. An in-house designer can make daily improvements, run quick experiments, and deeply understand your users in ways an agency never will.

The cost of a designer (€5,000-€7,000/month) is now a small percentage of revenue and pays for itself in better conversion rates and user retention.

Real scenario: You’re at €50,000 MRR with 200 active customers. Your designer ships small UX improvements weekly, redesigns onboarding based on drop-off data, and works directly with your developer. This iterative improvement drives your activation rate from 35% to 52% over 6 months.

Design Is Core to Your Product’s Value

If your competitive advantage is user experience, you can’t outsource your differentiator.

Why in-house wins here: Products like Notion, Figma, or Linear win because of exceptional design execution. That doesn’t come from project-based agency work. It comes from obsessive daily attention from someone who owns the experience end-to-end.

Real scenario: You’re building a design tool or collaboration platform where UX is the product. Your designer needs to use the product daily, understand edge cases, and care about pixel-level details that determine whether designers choose your tool over competitors.

You’re Shipping Features Continuously

If you’re releasing new features every sprint or doing constant A/B testing, you need someone embedded in your development process.

Why in-house wins here: Agencies work in projects with defined scopes. They’re not structured for ongoing weekly feature design. An in-house designer sits in standups, works directly with engineers, and designs alongside development.

Real scenario: Your product roadmap has 3-4 new features shipping each month. Your designer is in daily standups, creates specs for developers, and iterates based on immediate feedback. Agency turnaround times would slow everything down.

You Need Deep User Understanding

If your product serves a complex workflow or niche industry, surface-level user research won’t cut it.

Why in-house wins here: An in-house designer can spend months really understanding your users. They join customer calls, watch session recordings, analyze support tickets, and build institutional knowledge an agency can never match.

Real scenario: You’re building project management software for construction teams. Your designer spends time on construction sites, understands the terminology, knows the pain points intimately, and designs solutions based on deep domain expertise.

You’re Post-Series A with a Growing Team

Once you have 10+ employees and serious funding, not having design leadership becomes a bottleneck.

Why in-house wins here: You need someone who can build design systems, maintain consistency across features, mentor other team members, and scale design operations as you grow.

Real scenario: You’ve raised €2 million, hired 5 developers, and are planning to 3x the team in 12 months. You need a design lead who can establish processes, build a component library, and eventually hire more designers as you scale.

The Real Cost Comparison

Most founders only compare surface-level numbers. Here’s what it actually costs:

Product Design Agency

Upfront project costs:

Project type	Cost with Inity
MVP design (4-6 weeks)	€4,400-€6,600
Major redesign (10-12 weeks)	€11,000-€13,200
Feature set design (2-4 weeks)	€2,200-€4,400

 

What’s included:

• Multiple designers (UX + UI)
• Project management
• Design systems and documentation
• Developer handoff
• Revisions within scope
• No long-term commitment

Hidden costs:

• Less context over time (they’re not using your product daily)
• Communication overhead (explaining context for each project)
• Potential need for another agency or designer for ongoing work

In-House Product Designer

Annual costs:

Seniority level	Salary cost
Junior designer (1-3 years)	€40,000-€55,000/year
Mid-level designer (3-5 years)	€55,000-€75,000/year
Senior designer (5+ years)	€75,000-€95,000/year
Design lead (7+ years)	€90,000-€120,000/year

Additional costs:

• Recruitment (€5,000-€15,000)
• Benefits and taxes (add 30-40% to salary)
• Equipment and tools (€3,000-€5,000)
• Onboarding time (1-2 months at reduced productivity)

What you get:

• Daily availability and fast turnaround
• Deep product and user knowledge
• Alignment with company culture and vision
• Flexibility to work on whatever’s most important
• Long-term institutional knowledge

Hidden costs:

• Management time and overhead
• Risk of bad hire (expensive to replace)
• Utilization gaps (paying for full-time when work is part-time)
• Single perspective (no diverse experience)

The Hybrid Approach (What Smart Founders Actually Do)

The best answer for many SaaS companies isn’t choosing one or the other. It’s using both strategically at different stages.

Stage 1 (Pre-Product): Use an agency to design and launch your MVP. Get to market in 8-12 weeks with professional designs without the commitment of a full-time hire.

Stage 2 (Early Traction, €10K-€30K MRR): Continue with agency for major feature additions or redesigns, but start bringing on a junior in-house designer for daily iterations, marketing pages, and small improvements.

Stage 3 (Product-Market Fit, €30K-€100K MRR): Hire a senior in-house designer to own the product experience. Use agencies for specialized projects (branding, marketing site redesign, illustration work).

Stage 4 (Scaling, €100K+ MRR): Build an in-house design team with a design lead. Agencies become specialists for overflow work, very specific expertise, or rapid scaling when needed.

This staged approach lets you move fast early, transition to deep product thinking as you grow, and maintain flexibility throughout.

Red Flags for Each Option

Don’t hire an agency if:

• You need someone available for daily questions and quick iterations
• Your product requires deep industry expertise they don’t have
• You’re already at €50K+ MRR and need ongoing design work
• You can’t clearly define project scope (agencies need defined deliverables)
• Communication and responsiveness are more important than specialized skills

Don’t hire in-house if:

• You’re pre-revenue with limited runway
• You can’t commit to at least 12 months of employment
• You don’t have enough work to keep a designer busy full-time
• You’re a non-technical founder who can’t evaluate or manage design work
• You need the project done in under 8 weeks (hiring + onboarding takes longer)

How to Make the Decision

Ask yourself these five questions:

1. What’s my current MRR?

• Under €20K → Agency
• €20K-€50K → Agency for projects, consider junior in-house
• €50K+ → Time for senior in-house

2. Do I need ongoing daily design work or project-based work?

• Project-based → Agency
• Ongoing daily → In-house

3. How much runway do I have?

• Under 12 months → Agency (preserve cash)
• 12+ months with growing revenue → Can afford in-house

4. Is design a core differentiator for my product?

• Yes → Must be in-house long-term
• No → Agency can work

5. Do I have the ability to manage and evaluate design work?

• No → Agency (they’re self-directed)
• Yes → Either works

What Happens If You Choose Wrong

Choosing agency when you needed in-house: Your product feels disjointed because different projects were designed at different times. Small UX issues never get fixed because they’re not worth a full agency project. User feedback takes weeks to translate into design changes.

Choosing in-house when you needed agency: You burn through runway paying someone €6,000/month when you only have 10-15 hours of work per week for them. You get one perspective instead of diverse cross-industry experience. Major projects take 3-4 months instead of 6-8 weeks.

The good news? Neither choice is permanent. Many successful SaaS companies start with agencies and transition to in-house as they grow.

The Bottom Line

Use a product design agency when: you’re pre-revenue, have defined projects, need speed and expertise without long-term commitment, or don’t have design leadership to manage an in-house hire.

Hire an in-house designer when: you have steady revenue (€30K+ MRR), need ongoing daily design work, design is core to your value, or you’re ready to build long-term design capability.

Use both strategically as you grow through different stages. Start with an agency to move fast and preserve cash. Transition to in-house as you find product-market fit and need deeper product thinking.

The right choice isn’t about which is “better.” It’s about which matches your stage, resources, and needs right now. Make that decision deliberately, not by default, and you’ll build a better product faster.