Startups Should Know These 7 Things about Outsourcing Development

Startups Should Know These 7 Things about Outsourcing Development

Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

Every startup needs to have its own unique system to get through the teething stage and gain recognition. It must consider such activities as hiring, training and the outsourcing of development as all important, just as much as brand, structure and values.

Outsourcing can lead to high levels of productivity at reduced costs. A study by Interstice showed that outsourcing can save companies 60 percent on overhead costs. What you outsource depends on the nature of your business and your goals, of course. But you’ve got to approach outsourcing the right way or risk losing money and even putting your business at risk.

The truth is that you can outsource every aspect of your business if you choose to, but when you consider how vital the development aspect is to every startup, you should look very closely at the following seven things to know about outsourcing it.

1. The right third party

You need to make deliberate efforts at creating a brand that you’ll be proud of. One of the daring steps to take here is deciding who handles your development (app development, for example). Should you hire an agency or freelancers? Most aggressively progressive startup entrepreneurs I’ve interacted with prefer working with agencies.

One point to remember is that whether you’re going to hire an agency or individual freelancers, there are both pros and cons to each. Do your research first.

2. Consider technology standards.

Because of the re-definition of web and app technology development, and actually other types of development, you may want to consider the technology standards you’re using when outsourcing For example, mobile usage has surpassed desktop usage by far, with a 58 percent growth rate year over year. If you’re developing a website for your startup, you cannot hire professionals who does not understand responsive design.

More so, if you plan to generate traffic, leads and customers from search engines, Google expects you to make your web and mobile applications mobile-friendly. You must be able to feature up-to-date technologies in your development; otherwise, your project will be outdated.

3. Include personalized communication.

Ensure that there is a guarantee of a personalized communication between you and your professionals. The reason is that you will encounter technical issues after the project has been completed sooner or later, and would require the attention of your experts again. Create a seamless communication by putting the time-zone difference into consideration to help you make smart decisions about when to outsource your services, and whom to put in charge.

4. Intellectual property considerations.

Have you considered what rights you have on your mobile app properties? You should know that some legal jurisdictions do not have much regard for intellectual property like software. Because if this, it is estimated that approximately 61 percent of software used in most Asian countries and 58 percent in India are pirated. How many of these crimes have resulted in lawsuits? How many of those lawsuits have been litigated?

That makes it very important to secure your intellectual property against misuse and theft when outsourcing developments (web, app, software, etc.). It’s your responsibility to do so. You can create those limitations by drafting contracts and nondisclosure agreements which the freelancer/agency will be required to sign and adhere to. You may also want to seek professional advice on these matters.

5. Consider the unique quality of your product.

You should never outsource some delicate developments to a third-party. Simple reasons are key competency and trade secrets. Outsourcing a key product or service that makes the company unique simply means giving out your entire company for nothing. You don’t want other people to hijack your edge.

This is your company’s “secret sauce,” so trade it with extra care. If you truly want to get the project done, consider hiring an in-house developer to handle it. Operational products such as reservation systems or process automation can be outsourced, but when it comes to creative products like architectural rendering, chip-design programs or consumer games, don’t reveal the secret. Work on these in-house.

6. Regular updates on company’s progress.

You should be in control of your business. Do NOT relinquish 100% control to a third party 100 percent control of their company’s development. That’s not ideal. Inasmuch as outsourcing development is important, you need to get regular updates to keep abreast of the behind-the-scene processes. Go beyond being interested in just the end result, to getting involved in the ongoing development. Provide ideas, answer questions, give suggestions. You’ll learn a lot more from the processes than from the end result. If you do not know about software malfunction, or even basics about app development, you may make irrelevant decisions and costly mistakes.

7. Ensure you get the value for your money.

Do not always think that getting cheaper services is the best way to go. Though you want to save money, and that’s important, going cheap is one route to absolute failure. However, you need to keep in mind that you always get what you pay for. That’s a fact of life. And I’m not necessarily suggesting that you should make expensive hires.

The bottom line is, choose freelancers/companies that have the experience, modern tools and right skills required to handle your project. At the worst, pay the industry standard fee when outsourcing developments of your software applications.

Daven Michaels is a New York Times Best Selling Author and CEO of the premier global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.


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