I read a lot of articles about how bad outsourcing is or can be. Or at least I read this advice that as a startup you shouldn't outsource. What is you take on this
Outsourcing is hard because we are wired to think we are better at doing things ourselves than someone else. Obviously, this is wrong in a lot of scenarios but there are hints of truth in that statement.
Your company is your company. Everyone likes the idea of outsourcing 99% of your company and taking the margins on what money is left yourself. This nice to think about, but dumb. Read the first sentence of this paragraph, will you? Outsourcing is good to the extent that it doesn't shape what your company is going to be like. Let me explain it in my own words what outsourcing should be.
What I like to think outsourcing is, is letting someone else do the boring and mundane tasks that you would otherwise be stuck with. That can be accounting your finances, proofreading your writing, to even publishing daily posts to your company's social media account. Stuff like this nobody wants to do. It's like the workers in a limited service restaurant (fast food). The workers help deliver the value of your company by leaving you time to scale, outreach, and develop your business yourself.
If you spent 10 hours of your workweek dealing with tiny errors, small corrections, maintenance then that's %25 of your workweek time essentially being wasted. If you outsource the smaller tasks to someone else like a personal assistant, content proofreader, social manager then you can have those ten hours to focus on talking to your customer, scaling your business, developing connections, and much more.
Yes, there are more things to outsourcing than I listed above but you get the point. I've seen companies outsource their product development to a 3rd part firm and work out well, because things like that sometimes work. Just keep in mind that as a founder, CEO, owner (you name it), you need to remain in control of your company. The company will only thrive off your own decisions and judgement but sourcing that out to someone else takes the company out of your hands and into that of someone that might not be capable. It's probably where the "ugly" part of outsourcing comes in but there's plenty of good to offset the bad, trust me.
I have been outsourcing for nearly 8 years in the startup context (not much money to throw around). There is a lot to tell about that. A few points (out of many) that I can share from my experience:
Major factor is the degree of your technical discernment. If you don't understand the domain well, expect the outsourcing team to make their default choices. That will usually translate into average quality of product which is fine in most startup situations.
Don't expect too much. Outsourcing is just another form of business and their focus in on producing something that kind of works and needs ongoing maintenance to keep you as a paying customer. The guys just aren't interested in building a flawless product otherwise they will be at loss. You should be cool about that.
Outsourced product will not be optimal and will not be scalable well. You have to be okay with the idea of getting an "advanced prototype" that you will have to rewrite once you have some traction and money. Just be at piece with this idea and your outsourced life will be much easier.
Select your team one by one, talk to each candidate and judge their fitting. Make hard choices along the way. It is all about your managing skills and how well you discern blah-blah from real stuff because there will be lots of promises!
As you may have guessed, it's all about you and your abilities. Yes, one can make this stuff work, others would waste ton of money.
I wrote an article about it. Hope it helps: https://medium.com/@supbicou/never-call-an-offshore-company-for-coding-your-app-9c986d99f668
I would advise consider your country of origin. From my experience, culture and language matter as often times nuance is lost in translation.
A couple of blogs on this subject;
To some extent, it depends on the discipline you are looking to outsource. My area of specialism is in Customer Experience / Customer Care. I have also been on the "receiving end" of outsourced development operations. In both cases, as long as you go into it knowing what you want to achieve, and let the experts be the experts, then generally it will be a good experience.
My mantra is to leave a brand to do what they are good at (development, business development, market development, etc) and leave things like Customer Experience to people who have the battle scars and focus on what is good use of the resource.
Here is my stories of all outsourcing related experience :)
First of all i am happy to find such form where i can share my failure. Failing in your SOLE STARTUP is believe me the HARDEST thing one can have in life especially when you stop sleeping and working day and night to change your life from 9am to 6pm boring working routine.
I am having no shame in saying that i failed 3 times and every time it was due to only one reason.
I was having no mentor or senior around me with whom i can take business advice.
So first time : I got opportunity to run offshore office. I hired resources with no background business knowledge. Team size went to 30 in 3 years and suddenly CEO quit operations due to his own fight with sales team. I had to fire 30 resources because i was having 0 capital with me. Yes 0 capital. Client gone so all end that second.
Second time : Start pitching ideas to investors and everyone said that visit us when this start making money. I was not state of investment as i was having no cash. After few months, i found one of those investors build my idea and launch in market with his name.
Third time: I learnt that capital is important and also working product is more valuable so i got an other investor who asked me to hire team for him. After 3 months he directly contacted with team member saying i am paying him $x amount and he is paying you $x/2 so come work with me directly.
and that is how i am facing these failure. Yes it is my dream to build my startup and grow it but the journey is very very hard.
After all of this , yes their is disappointment somewhere inside me but i am taking it as learning and hoping that try try again will work and i am not going to QUIT. Never say never.
Literary i am feeling so relax and comfortable after writing all this here as i joined this platform for first time so that i can share my learning and learn from other and happy to move forward.
@Salman, why do your call these people "resources" instead of "human beings working to keep a roof over their heads?
I do not outsource, ever, period. If you outsource it is usually because you want to save. But you always, yes always, get what you pay for.
Daniel, I would agree to a certain point, however outsourcing certain part are useful for startups that want to focus on RnD , Growth and just getting setup. I am talking about accounting , bookkeeping , Insurance, HRIS and payroll till you are in a position to bring on board an HR person.