Outsourcing Your Startup

Software Development EnvironmentNontechnical founders are often tempted to outsource the technical aspects of their startups. The reasons for doing this are varied and include:

  1. Don’t want to give up ownership
  2. Difficulty finding a technical cofounder
  3. Desire to maintain complete control of project direction

Some people say that outsourcing a startup is hands down the worst idea you can have. They’ll argue that you’ll end up with a substandard product that was expensive to build and will still need to be rebuilt later.

I won’t entirely disagree with them. However, there is a situation where outsourcing could work. There are a few criteria though, which must be met for it to have a chance:

  1. You need to have a clear and complete vision of the product and how it needs to be built.
  2. You need to find an A team of developers.
  3. You need to be 100% right about #1 and #2.

If you can manage all of those, you will probably be fine. I can’t imagine anyone nailing all of those though. Getting a compatible technical cofounder is a better option. The whys are simple. A technical cofounder has strong motivation to make sure the product is solid because they believe in the product and have a financial incentive. Outsourced coders are only incentivized to work more work to earn more money. Since startups tend to be short on both time and money, that incentive is completely at odds with those of the startup. Also, a solid technical cofounder will both be skilled at building the product and at hiring others with the skills to contribute to the team. If you’re nontechnical, relying on yourself to decide who is and who isn’t knowledgeable about the technical side is problematic, at best.

So, my recommendation is to go with a technical cofounder where possible. If finding one is not possible (I didn’t say, not easy), then you can try the outsourcing route if the idea compels you to. Make sure that if you do that though, that you have a very clear idea of what you need and how it needs to be built. Also, test your target market to make sure you are right. You can’t afford to be completely wrong on the idea because reworking everything will cost you a whole lot more than a little time. In that case you would have been much better off just giving up a little equity to a solid technical cofounder.

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