Tech Startups and Outsourcing

How some startups failed and some other succeeded using outsourcing

Failed startups and their lessons from Outsourcing!

“Outsource developers typically work on various projects at the same time and simply cannot proceed at the speed you need them to during this stage.”

“Outsourcing your core competency and relying on a third party to execute on the quality of your product can be a dangerous proposition. Think of it as a restaurant that outsources it’s cooking.” -Luis Montes

“Before hiring a fantastic iOS dev to our team, we relied on two mobile development firms to build out versions of Nextt on the iPhone. We ended up wasting time and money.”

“If you are building a software company, get your dev team in house from day one or you will take one step forward and two steps back.” -Mark McGuire

“We outsourced to a big-company 3PL way too early”

“Scale only when absolutely necessary”

-Sarah Brayar

“While my blood pressure grew each time I had to explain some changes in design, functionality or screenflow.”

“I would have never thought that the Muslim holidays would actually affect my daily business so soon.”

“Our Pakistan H.Q. was evacuated and secured for the arriving cyclone. “

“We asked for a detailed list of devices the app was thoroughly tested on, which was ultimately replied to with “Our hardware is from stone age, but our software is up to date.”

"Outsourcing makes only sense in case you can clearly define your project before hand”

“Do constant code controlling by an expert.”

-Kevin Linser, Nauapp

“We wanted to move faster and we outsourced some parts of our product. It was a bad decision that cost us time and money.”

“If you have to outsource, never never never outsource anything that’s core to your business.”

-Gil Sadis

Successful startups and their lessons from Outsourcing!

“I outsourced myself and stayed with my team (sleeping on one of the developers couch) for more than 3 months. I came back with a working prototype that let me fill out the rest of my founding team here and then raise money.”

“Some other side benefits is it was much cheaper to live over there on a daily basis than it was here. This extended the amount of time I could bootstrap the company. It also let me focus completely on what I was building since there was a lot less distractions.”

-Joe Fernandez

"It's two kids, and [some] development was outsourced to some Russian guys they met on the Internet”

-Wall Street Journal

“A few notes about working with an offshore team. If you’re gonna do it, do it right. What I mean by that is that I’ve seen it done wrong so many times it’s sickening. Folks in the U.S. all too often have this mistaken belief that there are these inexpensive coders outside the U.S. who are just on call and ready to write code based on specs. That’s a recipe for disaster.”

“The notion here was that spending our cash is the same as spending our equity. The more we spend early on, the less the company will be worth in the long run.”

“As per our hunch, we learned early on that in-person time was critical for planning. As such, we have evolved into this regular cadence wherein for 1 week out of every month we plan together in person, and then for 3 weeks we are more tactical as our interactions are over skype.”

-Jason Goldberg

“The Squawker team is a prime example of how to work on a development project. Their core team had between them many decades of trading and financial technology experience, so they were perfectly capable of steering the project while bringing in external partners to build an integrated implementation team.”

“Startup founders often begin with a very business-oriented team and assume that they can outsource all or almost all of the responsibility for the technical solution.”

-Dmitry Stillermann

“He chose to outsource his engineering team to Israel, his Q&A to India, and his hardware and firmware to China.”

“JPay experienced hyper growth based on their technology, but the technology team was scattered around the world, creating a whole new set of challenges. Ryan decided to take back his tech team, and the rest is history. An entrepreneur needs to know when and which parts of the company to outsource.”

-Zalmi Duchman

Have any outsourcing stories to share? Drop us a comment!