Team Building · Outsourcing

Whats' the best approach to build product for a new start-up - outsource or team building?

Richard Pridham Investor, President & CEO at Retina Labs

January 19th, 2015

For a band new start-up with an idea, what's the best strategy to build an MVP? I want to get a product to market within 4-6 months. Do you go with a full-stack developer and contract out some of the other pieces like UX or do you outsource to India or Ukraine? If you outsource offshore, I suppose you get a "team" as opposed to one individual but what are the trade-offs? Initial MVP will require a lot of brainstorming and trial and error. Time zone differences, language barriers...all of these could hamper progress.

Also, when is it best to bring on the CTO? Right away or after MVP and seed funding?

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Aleksandra Czajka

January 19th, 2015

Richard,

I work for myself as a senior software engineer and have dealt with a lot of start-ups. Have been a part of a few and started a few myself. The most common thing between start-ups is horror stories about, not just going to India because they're cheaper, but even going to dev firms in the states. Whit India or anywhere else, surprise surprise, a huge problem is the language barrier. On top of that, the culture is way different when it comes to deadlines and being close to specifications of the projects. Entrepreneurs come to me to fix a project done through India because, even with meeting after meeting, they did not complete the project to spec and were very late in submitting the project. Not to mention that the actual technology/code is crapola. On top of that, you get the time difference. Which, at first you might say to yourself that you can deal with it to save money, but, when you take into account that you will need many many meetings to answer questions, it quickly becomes unmanageable. 
The best way to create an MVP is to have a dedicated person, a full-stack developer, someone that speaks your language, someone that you know you can trust and will be available in a moment's notice to give you status updates and answer your questions. You don't get any of that with India or Ukraine. 

Your second question is more complex. You definitely want someone like a CTO involved from the beginning, even if they are not the CTO at that moment. My recommendation is to contract someone out for the MVP, see how well you work with that person and gauge their work ethic. I you have vetted them well at the beginning, now you will have someone who is a great candidate for a CTO. I'd also say, wait until you have customers and the business is looking up. This will attract someone who not only has a technical part of the brain, but an entrepreneurial as well. A CTO is not just a programmer. This person will need to be deeply rooted in the business side in order to know where the technology should go. 

I got a lot more thoughts on this because I've been in the start-up scene for a long time. Feel free to connect if you'd like to chat more.

Jeff ☁ CMO | Demand Generation | Content Marketer | Revenue Marketer | Product Marketer | Chief Marketing Technology Officer

January 19th, 2015

Hi Richard, I'm sure you'll get a lot of opinions; here's mine: I think building the MVP is highly strategic, requires insight into lead user pain points/needs, requires strategic thinking regarding the data model and development of the requirements. I also think that UX and UI are strategic. I've found that this is best accomplished with a small insourced group and CTO versus outsourcing. Once the initial product is built then product extensions and additional features can be outsourced. Good luck - I hope this helps. Best, Jeff Fugitt Founder and CEO AuthorityForce v. 512.653.8295

Alexandra Titova Head of Sales and Marketing @ Eastern Peak: Custom App Development

April 5th, 2016

The good thing about going offshore is that you can work with people who already built several startups, have thoughts to share with you, are open for brainstorming, and.. you won't be extra charged for this kind of expertise. 

I work for one of such companies. It's super cool to work with several startups every day and see that you are providing the value that other companies or induviduals can't offer. Here we've described a few other reasons why outsourcing works perfectly for startups. Feel free to contact me with any questions. Cheers

Andrew Lockley

January 19th, 2015

Build MVP with off the shelf components like WordPress, then rebuild once commercial proof points are obtained

Scott Brittain CTO Snap Kitchen (We're hiring!)

January 19th, 2015

Let me add one perspective I haven't yet read.  In any approach you must thoroughly "own" whatever awesomeness is the defensible part of your business.  That may be the idea, the execution of the idea, the origination behind the idea, whatever.  Whatever it is, you Richard Pridham must have lockdown control over it.  Here's a few scenarios to illustrate how this might change the answer to your question.

1. Your idea is brand new.  Build it anyway you want where you have legal IP protection.  Only hire trusted parties in geos with contract protection.  You must guarantee nobody steals your idea.

2. Your idea must be executed in a novel way.  Build it using a team you can interact with and supervise every day.  You must guarantee the team delivers the novel execution.

3. Your idea has a short shelf life.  Build it using the fastest possible TTM.  As suggested by AndrewL above.  You must guarantee the pace of work stays high.


Marco Micheletti Managing Partner at Pike Product Services LLC

January 19th, 2015

When developing a rather new concept or technically deep MVP you are going to encounter a vast variety of problems and issues.  For this stage I would prefer working locally or in the same time zone so you can address these issues and continue moving as quickly as possible.  There is nothing worse than letting critical bugs or problems fester overnight, or while you sit on a plane burning cash and time.  Time spend addressing communication errors can furtherer impact resolution, delivery timing and burn.  Working efficiently with a local source can be a force multiplier if you can work efficiently and get additional design iterations into your MVP.  Where do you want your problems to be?  In later stages of product development and manufacturing, there are many opportunities to out source to partners that are much better suited once major risk points have been mitigated.

CTO - 
Early in the process you may not need a CTO, but one should be considered - lets also say CTO could just as easily be VP of engineering or product development - in any case a technical lead that knows your core technology and can lead it's development.  A consultant could be considered and vetted for a possible longer term permanent role.  But when you get to the financing stages, your CTO/VPE, and the team around them  may be a proxy for the value of your IP and technology, whether this is right or wrong.  Someone inside your company needs to own it completely.  Build your team smartly based on your requirements, don't blindly follow any one solution.  

Ron Bentata

January 19th, 2015

hi Richard.
It depends, on the nature of the product. 
If it's something which involved new and breaking technology, such as the next Google Glass, Nest or a new security solution; you need a technology geek by your side from the get go. If the product is less technology-centric, you should have a partner with strong ux and design skills. 

on the other hand, you can start on your own, developing the technology or UX/design aspects using expert services, as outsource, without giving away part of your "cake". 

for example: 
if you're think of new mobile app. you should start with design and ux. development can be kept to minimum and outsourced to europe companies/developers.

remember that you should invest your efforts in customer acquisition and conversion. so ux/design and marketing are #1, you can postpone the technology/development partnering for later.

also remember that for investors, it is important to see a strong technology leader and team. so look for that as you make your way towards that stage.


good luck with your new endeavor.  

Hernán Borré CoFounder & CEO at mobaires - nearshore staff augmentation

January 19th, 2015

Hello Richard, 

Your question is really interesting since a lot of clients ask the same questions to us every time. 

About bringing the CTO I would recommend you to bring a tech savvy guy from the beginning. They will help you not only define the size of the team/project but also to understand the natural software development process in detail. 
It's very important that you can have someone in your team who 'speaks' the very same language as the developers you'll hire - no matter if they are in India, Ukraine or Argentina. 

A lot of companies offers the development of software product in addition to the software architecture, product graphic design, initial mockups, UI/UX guidelines, etc. There are other companies that only delivers software development services but most of us have all the package ready to start (turnkey). 
 
If you are very confident about your product and you know exactly how would it be at the end of the process - you are pretty much sure that you are not going to change anything in the middle of the development - you should go with a Fixed Price service. 
In the other hand if you feel like your software is going to change more than one time in de process you should hire Time&Materials kind of service.  

I'm from Buenos Aires, Argentina - another very good destination to 'nearshore' outsource your software development. Have you ever thought about it? We've been developing for US since 2010 with strong client referrals. 

PS: Please don't hire an Ads Agency for development - they are very good with creativity but they don't know much about software development. 
   

Ron Bentata

January 19th, 2015

Andrew, this is exactly correct!
create it small and quick, iterate to find you POC, using existing, "shelf" products. 
then deepen your team, product etc.

Mark Lummus

January 19th, 2015

Richard,

Lots of great ideas so far. Let me echo a few...

What kind of product and company do you want to build? what is your definition of success?

If you are planning to build a technology-based business (heavy tech IP) then you must start with a CTO. Your CTO will have a strong opinion about where to get the work done. Your CTO will also have an opinion about how to build the tech and that will drive the selection of outsourcing partner. 

If you are planning to attract venture investment with a tech startup, then you absolutely must have a CTO. Remember that your IP may be a differentiator for you. Many investors will want to see defensible tech differentiation. It's difficult to do that with 100% outsourced tech talent.

I recently consulted with a tech startup who did not start with a CTO and outsourced everything. 2 years later, there is no one on the team that knows and owns the IP - it's known best by the outsource partner - that spells risk for any future investors. 

Regarding selection of outsource partner, don't ignore Latin America. There are many tech firms now operating there and they have very competitive skills and rates, and they are in your time zone.

Think of your outsourcing vendor as a partner - they will be with you for a potentially long time.

Regarding outsourcing to India, I just had a conversation yesterday regarding the big problem they face there: lack of senior development talent. it's easy to find engineers straight out of school that want to do development. Once they have 3 years of experience, they want to manage others. They now have trouble finding deep talent with > 3 years of development experience.

good luck!