Founder Insight gives you feedback from the startup trenches.
The question of whether or not your startup should outsource is one every founder will have to ask themselves at some point or another. According to Ashwin Ramasamy, he believes outsourcing really depends on who you are and where you are in your startup pursuit.
Ashwin is a graduate of the Singapore Founder Institute and the Founder of the outsourcing startup, ContractIQ a service where startups discover, evaluate and engage with web/mobile dev agencies, based on feedback from peers. In the post below, Ashwin outlines the do's and don'ts of outsourcing, and shares the secret of how to get exactly what you need from contractors if you decide to go that route.
Should your startup outsource product development?
This topic has been beaten to death several times. Opinions vary from "Emphatic No" to "May be Yes". If the opinion is from a service provider, it's, obviously, "Obviously, Yes!".
So, should you? Like all classic conundrums in the world, the answer is "It depends!". It actually depends a lot on who you are and where you are in your startup pursuit.
When is outsourcing a bad strategy to pursue?
1. When you got an idea flash in the restroom and you decide to build a product before someone else does! - Often, your idea can be tested without a product.
2. When you have lesser money than it takes to build a respectable version - Equity doesn't sway may a dev shop. They've made a choice to be in a different business than building a startup!
3. When you can't visually present what your final output would be like - Try typing a 30 page requirement document and sending it to a vendor. You'd know what I mean.
4. When you can not spend time with the development team (almost) whenever they want! - Product thinking and design are the two most important functions of the founder of an early stage startup (apart from market development). The time spent with your dev team is the time you spend on product development.
5. When you need 'by the hour' updates across time zones (a.k.a control freak) - Weekly updates are too spaced out. Hourly updates are an overkill. Plan for a 10 minutes standup meeting every day and a demo every 4th day or a week.
6. When you don't have an in-house person or someone in your network to help you recommend or evaluate vendors - - Trusting the written references on online marketplaces or testimonial pages of the dev shops would be a very shallow way of evaluation.
7. If you don't understand how the business of outsourcing works ( Pricing Models and how they handle scope creeps, Estimation Models, Delivery Approaches etc.) - Be prepared to read up on these topics or seek an office hour with an industry insider. Outsourcing negotiations are far less sophisticated than funding negotiations. You can master them.
8. If you can not spend time explaining all use cases and personally test all the scenarios - Most founders who failed in their outsourcing initiatives do not agree that they've been lazy with explaining their expectations or did not spend adequate time to think through all the test cases. The most mundane act of running through the test cases would also be your final chance to catch a flawed or missed-out user interaction before your launch!
9. If you can easily get angry and impatient - A good leader should be able to interact up and down the food chain with ease. When you interact with developers that are not as articulate or business savvy as you are, remember that condescension builds a wall between you and them. If the atmosphere is vitiated with impatience and anger, teams relegate to 'carrying out orders' than 'working for the pride of doing something great'.
10. If you can not play the role of a project manager. It finally is your project to manage! - Ego. We've seen founders who do not call the dev team when it's time for a weekly call and then go back to point it out. It's never you vs them. Place yourself as a resource that the team has at their disposal. Let the team put you to the best use.
This list was made based on my going back through the emails to see which startup handled outsourcing how. What has been your experience as a startup? What mistakes have you made and which ones have you avoided?
Ashwin is a graduate of the Singapore Founder Institute and the Founder of the outsourcing startup, ContractIQ, a service where startups discover, evaluate and engage with web/mobile dev agencies, based on feedback from peers. If you could use a hand to find the best software development agency for your project, check out ContractIQ and see what they can do for your business.