Startups considering outsourcing?

Posted: April 18, 2010 in Uncategorized

Just came across an insightful post on Techcrunch Should Tech Startups Outsource Product Development?

As an entrepreneur who has used outsourcing earlier,I will like to share my experiences and insights:

The very first question is should a startup outsource its product development?

One question leads to multiple:

  1. Does your core team need outside help in  converting your idea into a product?
  2. Do you have seed capital that can be put into outsourcing?
  3. Does your team have the ability to write the core intellectual property in your product?
  4. Do you have a dire need to get into the market really quick?

If answers to most of the above is YES, you may consider outsourcing.

Here are couple of inputs

Intellectual Property: Take pains to write your own algorithm. Keep the product core to yourself and your core team if possible. Identify the bulk of your app that will take you a lot of time to develop ,but can be developed by others. Examples are: user authentication system,payment processing integration , screen wireframes, graphics and multimedia, etc.

Thin slice approach: Before engaging outsourcing, give them a small chunk of your actual work and implement full life cycle on it(design,dev,coding,unit testing and documentation). Spend a good amount of time in analyzing the quality of work. Some pointers will be to look at code smells, use of patterns , use of standard coding practices. Always look at if the offshore team has taken extra step in applying creativity from their side than just delivering what they are told. I strongly believe that “running the extra mile” from the third party team shows that they are skilled and are hungry to do a better job

Monitoring: Always measure the progress through milestones and complete a chunk of work (.i.e a module) end to end before getting into a new set.  Do not kick start multiple modules in parallel. The simplest way is to use a google docs spreadsheet and track it every day for updates.

Legal Bindings: Legal bindings are different in different engagements, but they share some common terms around breaking and renewing the engagement. Be careful about the words there. You don’t have to be an attorney, but make sure you have room to break the contract if you are not satisfied with the work delivered. Also, see if you can define penalties for missed targets.
Be friendly: Remember that we are part of this ecosystem. “Treat them how you will like to be treated” creates an aura of respect and efficiency.

My 2c.

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