Tips for using outsourcing for startups
At a recent WeTeachMe event held at the York Butter Factory co-working space in Melbourne, we were asked to speak about Outsourcing for Startups.
What areas of outsourcing apply to startups?
We define outsourcing as “a highly-skilled services marketplace”. This implies that you’re using a marketplace environment to procure knowledge work as a service. 3 types of sourcing can easily be used by startups. When you have:
- A defined scope of work and clear process, use Outsourcing, typically offshore to get the cost benefits.
- A defined price and time expectation and want to generate many options, use Crowdsourcing contests, such as 99designs.
- A defined specialist skill requirement, use freelancing to sub-contract offshore resources.
Outsourcing myths.
- Low price = Low quality.
- Freelancers are unmotivated.
- Your IP is at risk.
- Anyone who is not local or sitting next to me is less skilled.
- There is a high management overhead.
- All outsourcing is from India or Russia.
- Paying someone $15 is abuse.
Why should a startup consider outsourcing?
As a startup, you have to achieve a few key things, like speed to market, agility, rapid iteration, flexibility, rapid scaling, testing ideas, iterating and many menial , labour intensive tasks, all as cheaply as possible. This is a clear match to the benefits of outsourcing. You get access to a flexible, highly skilled, affordable labour force that scales almost infinitely and does so rapidly, while simultaneously accessing much cheaper labour for data entry, etc.
What can startups outsource?
Idea Stage
Freelance:
- Naming (NameRefer)
- Funding (Kickstarter, Pozible)
Engagement Stage
Freelance:
Design Stage
Crowdsource:
- Logo Design (99Designs, DesignCrowd)
- User Interface Design Wireframe Design (CrowdSpring)
Build Stage
Outsource:
Freelance:
Scaling Stage
Outsource:
- Monthly Support (GetViable)
- Dedicated Development Team (GetViable)
Providers
- Elance — best for complex projects on a fixed price basis.
- ODesk — best for hourly work.
- Namestation — Naming.
- Kickstarter — crowdfunding
- 99Designs, DesignCrowd — logos, business cards and user interface design
- Crowdspring — user interface design
These are some examples that we’ve had success with, and a few providers to get you started. There a many more focused on specific areas, so look around or ask us in the comments below.
Getting Quality Results!
- Ask yourself “what skill is not core to my startup?” — eg; data capture, mailing leads
- Commodity or Talent?
- Be specific.
- Filtering question is gold!
- Aim for the best people or team.
- Choose wisely — interview with the same diligence as you would a local.
- Research your pricing — oDesk, eLance, Freelancer, etc
- Manage them as part of your team. Same courtesy, respect, patience, diligence, guidance.
- Test them with a small, sample task.
- Test with a low impact “work package”
- Start with hourly, move to Fixed.
- Structure smart milestones based on outcomes. 15%, …….., 30%
- Fire fast. Cut your losses and move on.
This should get you started with outsourcing and help you focus on the core skills as a startup.
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