What should you outsource? 'Non-core' is the classic response." - Jim Franklin, Former CEO of SendGrid and Startup Advisor
With so many things going on in a startup, doing everything in-house is often infeasible. Jim Franklin, Mentor for the Denver Founder Institute and the former CEO of SendGrid, suggests that a startup should outsource tasks that are not core to the business. If you haven’t identified the core of your business, read an article we have posted last week that covers this topic.
The easiest way to find trusted vendors is to ask your network for recommendations. After you have collated a list, here are three factors Jim suggests that you consider while selecting a vendor.
Prioritize Flexibility Over Price
A lot of founders underestimate the value of optionality when it comes to outsourcing. Being in an environment with high uncertainty, like that of a tech startup, you have no idea where the road forks. Hence it’s a mistake to focus on minimizing costs instead of maximizing flexibility - you may be paying less for getting a fixed set of tasks done, but you may very well find all the work done to be useless for your startup as you learn more about your customers.
When it comes to choosing a vendor, pick one that is flexible and is able to communicate effectively with you.
Find One With Similar Values
When your startup is small, your vendors are your extended team. So chose your vendors as if you are hiring co-founders or team members and make sure both parties share similar values.
Having similar values set the foundation for a great working relationship. Jim shared a story about a vendor that he had worked with for more than 10 years because they shared common values. This rapport has helped Jim to move things quickly when he needed instead of waiting on formal documents.
Don't Tolerate Bad Behavior
Your startup may be small, or you may have tight deadlines to meet, but Jim advises that you never tolerate bad behavior from vendors. He once had a big-name vendor who tried to poach his head of support, backend engineers, and marketers. This obviously was a bad experience, and their partnership didn’t last long.
When you are asking your network for vendors to recommend, do also ask them how the vendors work. If you only notice bad behavior from your vendors after you have started working together, just remember to apply this startup rule – fire fast.
What’s your best tip for selecting vendors?
In your experience, what worked for you when you were hiring a vendor? Share them in the comments section below.
