5 ms·

Unicorns are not built by outsourcing dev. Change my mind.

6 points by dennisbalon 6y ago

My first post ever on HN. Would love to hear the opposite point of view. I reasonably believe that outsourcing is not good at all for creating a product. Especially the product. Or even, PRODUCT! (all caps!) Why not: 1. The main task of the outsourcing team is to implement the request, so to speak, to complete the task. This means taking money from you for hours spent, but NOT for MAKING a product that will be able to solve market problems and make money. 2. Outsourcing DOES NOT care that you may be able, or perhaps most likely, do not have the ability (what a weirdly polite way to say it) to create detailed and well-planned technical documentation that will lead to the desired results. 3. An outsourcing team as an entity is NOT a partner. To create a product, launch it and make it profitable, a Partner (capital P!) is required. What instead: 1. Find a partner. There is no short cut here and as the actual experience proves, alone one does not create a truly great (because let us agree you dream big!) product. 2. The partner must have real experience, but not the same as yours. Since we are talking about an IT startup, then search among people within IT experience. 3. You did not find a partner? Then just do not start. The probability of losing money is too great! Until you find a partner: 1. Set a goal to write documentation for your project. Write. Re-write. Shorten. Repeat. 2. Show the basic documentation you have created to familiar market experts. Especially try to find those experts whom no one loves for their eternal criticism of everything! 3. Finally, you can indulge a little bit with outsourcing development teams. Formulate the task for minimum viable product (MVP). Find good UI / UX designers from among your friends and create a little prototype. Outsourcing is acceptable only for simple one-time-use solutions, and outsourcing is quite cool for a small app that allows you to run between investors not empty-handed.

alain94040 6y ago
No need to change your mind, you are correct. I can think of one success story over the last many years where the initial development was outsourced: craigslist. Beyond that, for technology startups, development is obviously a core competency.
- dennisbalon 6y ago
  But as the time goes the more I flex towards doing tiny stuff like MVP etc with outsourcing teams. Never the less recent years have showed growth of no-code instrumenta which I would personally prefer much more over any outsourcing team if we are talking about super simple projects.
  - Datkiri 6y ago
    Agree, no-code is great help to entrepreneurs to test their ideas. Btw, we’re doing exactly this in datrics
    - dennisbalon 6y ago
      My dream is to find an no-code instrument for creating and managing of various dashboards. Something really simple and powerul with various messenger and other interface plugins.
- muzani 6y ago
  Yeah, it's not an unpopular opinion. Investors often red flag software that isn't built in house. It's literally a check box in many places, and a straight question in the YC application form. It would be harder to convince someone that you can build a unicorn by outsourcing.
sbacic 6y ago
You can substitute "outsourcing" with "employees" and everything you wrote would still apply. In fact, I'm not sure if even the basic premise is correct - sure, you need a partner to handle the technical side but as you've surmised yourself - there is a place for outsourcing teams to build the MVP. And obviously, even unicorns eventually end up hiring people.
- dennisbalon 6y ago
  No you can’t. And if you can - bad manager are you if your employees work no better than a team of strangers far far away. I’d like to clarify that by “outsourcing” I meant dev teams which you as a founder can not either manage, nor influence or actually giude/support/answer questions quickly. I believe that the magic happens right when someone joins the team - in the best case it motivates better communication and mutual interest in the end result.
  - sbacic 6y ago
    I don't think it has much to do with managerial ability - both employees and outside contractors are in it for the money and their loyalty start and ends there. No amount of managerial prowess is going to change that. In fact, I'd go so far as to say that individual characteristics are far more important than whether somebody is salaried or contract.
    - dennisbalon 6y ago
      I wont argue about individual characteristics being the key. But for myself as a rule I defined that salaried team members are in most cases more motivated for a long successful releationship and care about the project more. Also, lets not forget that when we are talking about doing a startup, core members need tobhave more motivation than just a wire trsnafer at the end of the month. Best practices for motivating startup team members are not anything new.
      - sbacic 6y ago
        Sorry, but I'm not sure I follow. You talk a lot about "need to have" but don't actually say _how_ a salaried employee is supposed to have these virtues (as opposed to a contractor) simply by the fact that he's employed by the company.
Datkiri 6y ago
I think I have an opposite PoV . 1. The goal for every outsourcing is to make your product great because only in that case they can upsell you and make more money. 2. Outsourcing company can and do create the detailed specifications, but usually founders don’t want to pay for that, thinking that they can formulate everything theirselves, that in most cases they cannot do because their vision changes rapidly. That’s why having a partner gives you a better flexibility. Outsourcing works great when you have a clear vision or goal to achieve in that case you can benefit from the fast access to the competencies that you don’t have inside your team. And of course costs matters, if you’re founder from the region where engineer salary is 3 times less the in SV it’s better to hire the core team then outsourcing it. But for US, Germany, Sweden, etc - outsourcing is more flexible and cost efficient solution. P.S. find great partner is hard, find great outsourcing partner is also hard
- dennisbalon 6y ago
  Thanks for detailed PoV. Let me share an example with you. I have been in software dev for nearly 18 years by now. I am pretty good at creating detailed, structured and well thought through docs for developers. Now, last year we have experienced a need to outsource two moderate size projects. With great attention to documentation and general dev flow. Bottom line, despite we did get more or less working results at the end of the day I was not satisfied with the quality of the work done. The best guys we could interview and get to work with us still showed less confidence, less of engineering thinkin, less of everything than guys who worked in my teams. Ever. Like litterally less professionalism! And I believe that is ok but it is what it is. Professionalism and true caring about the product is not core compentenct that is needed if you are part of the outsourcing company. Why? Just because that is not what earns money at the end of the day. Speaking about US, Germnay, Sweden etc. - guess I would agree that while living in those countries it makes more sense to find good outsourcing Partner which wont happen from the first try anyway.
  - Datkiri 6y ago
    Note: I speak about the outsourcing for startups, for enterprises it’s completely different. Regarding professionalism: there is no difference for developer if he works in outsourcing company or in the product company because in the end of the day he wants to be proud of his work. (If he is a great talent) Thus, for the fair comparison of outsourcing vs employees you have to put both in the same conditions: the same communication, the same management and the same hiring process. Being in outsourcing business for 10 years I have a lot of examples when founders thought that outsourcing company can build their product for them and I saw success cases only when they treat an outsourcing company as a partner and the project team as their internal team. In opposite case there is a big gap between business and engineering that you don’t have with your core team I hope that you got your bad experience because of the unsuccessful choice.
joshxyz 6y ago
But they are built by outsourcing support to third world countries, hello to india and phillipines
- dennisbalon 6y ago
  Do you mean that by oursourcing we support 3rd world countries? If so here I absolutely agree but as my personal experience shows finding a good outsourcing partner no matter from what country - is a complicated task. All in all much better to find someone who will spend night hours sitting at a desk next to you, catering about the project and feeling that personal responsibility. Big big downside of hiring developers who are far far away - very low personal sense of responsibility in most cases.
elvynmejia 6y ago
It depends what quality of software and product you want to build. For an MVP, I think outsourcing is fine. For growing a company and product, you want to make sure you are hiring the right team not only to build a killer product but also a team that will build maintainable software.
- dennisbalon 6y ago
  Thanks for such a balanced answer. For MVP I believe no-code is perfect if possible.

6 points by dennisbalon 6y ago

alain94040 6y ago

No need to change your mind, you are correct. I can think of one success story over the last many years where the initial development was outsourced: craigslist. Beyond that, for technology startups, development is obviously a core competency.

dennisbalon 6y ago
But as the time goes the more I flex towards doing tiny stuff like MVP etc with outsourcing teams. Never the less recent years have showed growth of no-code instrumenta which I would personally prefer much more over any outsourcing team if we are talking about super simple projects.
- Datkiri 6y ago
  Agree, no-code is great help to entrepreneurs to test their ideas. Btw, we’re doing exactly this in datrics
  - dennisbalon 6y ago
    My dream is to find an no-code instrument for creating and managing of various dashboards. Something really simple and powerul with various messenger and other interface plugins.
muzani 6y ago
Yeah, it's not an unpopular opinion. Investors often red flag software that isn't built in house. It's literally a check box in many places, and a straight question in the YC application form. It would be harder to convince someone that you can build a unicorn by outsourcing.

sbacic 6y ago

You can substitute "outsourcing" with "employees" and everything you wrote would still apply. In fact, I'm not sure if even the basic premise is correct - sure, you need a partner to handle the technical side but as you've surmised yourself - there is a place for outsourcing teams to build the MVP. And obviously, even unicorns eventually end up hiring people.

dennisbalon 6y ago
No you can’t. And if you can - bad manager are you if your employees work no better than a team of strangers far far away. I’d like to clarify that by “outsourcing” I meant dev teams which you as a founder can not either manage, nor influence or actually giude/support/answer questions quickly. I believe that the magic happens right when someone joins the team - in the best case it motivates better communication and mutual interest in the end result.
- sbacic 6y ago
  I don't think it has much to do with managerial ability - both employees and outside contractors are in it for the money and their loyalty start and ends there. No amount of managerial prowess is going to change that. In fact, I'd go so far as to say that individual characteristics are far more important than whether somebody is salaried or contract.
  - dennisbalon 6y ago
    I wont argue about individual characteristics being the key. But for myself as a rule I defined that salaried team members are in most cases more motivated for a long successful releationship and care about the project more. Also, lets not forget that when we are talking about doing a startup, core members need tobhave more motivation than just a wire trsnafer at the end of the month. Best practices for motivating startup team members are not anything new.
    - sbacic 6y ago
      Sorry, but I'm not sure I follow. You talk a lot about "need to have" but don't actually say _how_ a salaried employee is supposed to have these virtues (as opposed to a contractor) simply by the fact that he's employed by the company.

Datkiri 6y ago

I think I have an opposite PoV . 1. The goal for every outsourcing is to make your product great because only in that case they can upsell you and make more money. 2. Outsourcing company can and do create the detailed specifications, but usually founders don’t want to pay for that, thinking that they can formulate everything theirselves, that in most cases they cannot do because their vision changes rapidly. That’s why having a partner gives you a better flexibility. Outsourcing works great when you have a clear vision or goal to achieve in that case you can benefit from the fast access to the competencies that you don’t have inside your team. And of course costs matters, if you’re founder from the region where engineer salary is 3 times less the in SV it’s better to hire the core team then outsourcing it. But for US, Germany, Sweden, etc - outsourcing is more flexible and cost efficient solution. P.S. find great partner is hard, find great outsourcing partner is also hard

dennisbalon 6y ago
Thanks for detailed PoV. Let me share an example with you. I have been in software dev for nearly 18 years by now. I am pretty good at creating detailed, structured and well thought through docs for developers. Now, last year we have experienced a need to outsource two moderate size projects. With great attention to documentation and general dev flow. Bottom line, despite we did get more or less working results at the end of the day I was not satisfied with the quality of the work done. The best guys we could interview and get to work with us still showed less confidence, less of engineering thinkin, less of everything than guys who worked in my teams. Ever. Like litterally less professionalism! And I believe that is ok but it is what it is. Professionalism and true caring about the product is not core compentenct that is needed if you are part of the outsourcing company. Why? Just because that is not what earns money at the end of the day. Speaking about US, Germnay, Sweden etc. - guess I would agree that while living in those countries it makes more sense to find good outsourcing Partner which wont happen from the first try anyway.
- Datkiri 6y ago
  Note: I speak about the outsourcing for startups, for enterprises it’s completely different. Regarding professionalism: there is no difference for developer if he works in outsourcing company or in the product company because in the end of the day he wants to be proud of his work. (If he is a great talent) Thus, for the fair comparison of outsourcing vs employees you have to put both in the same conditions: the same communication, the same management and the same hiring process. Being in outsourcing business for 10 years I have a lot of examples when founders thought that outsourcing company can build their product for them and I saw success cases only when they treat an outsourcing company as a partner and the project team as their internal team. In opposite case there is a big gap between business and engineering that you don’t have with your core team I hope that you got your bad experience because of the unsuccessful choice.

joshxyz 6y ago

But they are built by outsourcing support to third world countries, hello to india and phillipines

dennisbalon 6y ago
Do you mean that by oursourcing we support 3rd world countries? If so here I absolutely agree but as my personal experience shows finding a good outsourcing partner no matter from what country - is a complicated task. All in all much better to find someone who will spend night hours sitting at a desk next to you, catering about the project and feeling that personal responsibility. Big big downside of hiring developers who are far far away - very low personal sense of responsibility in most cases.

elvynmejia 6y ago

It depends what quality of software and product you want to build. For an MVP, I think outsourcing is fine. For growing a company and product, you want to make sure you are hiring the right team not only to build a killer product but also a team that will build maintainable software.

dennisbalon 6y ago
Thanks for such a balanced answer. For MVP I believe no-code is perfect if possible.