Starting a venture and developing your product or service requires working quickly and efficiently. You need to ensure your startup offers value in terms of innovation, quality and convenience, even though you have limited resources and may be racing against the competition to be first to market.
So, how do you strike the perfect balance?
It’s up to the talent you bring in to make this happen. The problems are you (much like myself) have limited funds to hire talent, who may be new to the process. There is an alternative approach that many companies have actually used during the startup phase: outsourced development.
While this may be little known, perhaps because there is considerable controversy over using outsourcing, here are 25 large startups that have succeeded using this strategy to launch their highly-valued businesses:
- Slack: Now valued at nearly $3 billion, this company used outsourcing to develop its solution in its earliest days.
- Fab: This large startup partnered with developers in India to maximize funding while scaling up when their business showed signs of growth.
- Skype: They used a team of developers in Estonia to help them build out their business.
- Klout: To get its technology in the right place before launch, Klout relied on many outsourced developers.
- AppSumo: The company has used many freelancers in various fields, including marketing, content and IT to grow its business.
- Staff.com: Serving as a company that offers outsourced talent and freelancers for other organizations, Staff.com utilized the same model to grow from a start-up into a globally successful business.
- Branchout: This app was created entirely with outsourced development.
- Github: The company has used numerous people who completed development work virtually from home.
- Basecamp: The same practice of outsourcing worked for Basecamp as it developed itself into a technology leader.
- AlertBoot: The company decided to outsource infrastructure-as-a-Service (IaaS) and cloud hosting to speed those areas of development.
- MYSQL: From the start, the company believed and proved the success of a growth strategy that included using a mostly outsourced staff in various countries to ramp up operations in each location.
- SeatGeek: This company found a considerable cost benefit to outsourcing specific tasks to talent in other countries. That helped them build their infrastructure quicker at less cost than hiring in-house staff.
- Squawker: This company partnered with an outsource provider to build its platform solution.
- JPay.com: Outside developers built their technology and infrastructure. They used people in India, China and Israel for quality assurance, engineering and hardware. It helped to have the outsourcing in place to handle growth. They eventually sold the company to Securus Technology.
- Splunk: This company, known for search and analysis of data, has used outsource agencies to find the talent that rapidly developed their infrastructure and solution.
- Opera: This web browser company relied on developers in other countries to create and implement its platform.
- Pingar: The company helps organizations with data analytics. While establishing itself in its industry it called on outsourced talent to develop its business.
- Axeda: The company relied on developers to create the software and platform to offer its cloud-based solution.
- Solix: Even technology outsource companies have used outsourced talent to create its infrastructure as Solix has done.
- Cloudmunch: This Platform-as-a-Service (PaaS) company utilized an Indian outsource company to cull talent it needed to start up its operations.
- Gliffy: This web-based diagramming tools company has turned to outsourcing for specific aspects of its technology development.
- Net2Text: The company outsourced the development of its mobile payment platform.
- Proximate Global Inc.: This company used an outsource service provider to create a location-based service for smartphones called Face2Face.
- Mailburn: This iPhone email client solution developed thanks to a partnership with an outsource service provider that helped with many of the technical aspects of the solution.
- Mindspark: This mobile app development company has used outsource providers to create its business and many of its current apps.
After learning about this list I started researching good companies that could build my invoicing for freelancers startup. I now have a large team of developers who are cranking away at new features.
These startups and many others, like myself, have recognized the value that outsourcing brings, whether that is talent in other countries or homegrown experts who work virtually. The primary driver is that outsourcing costs startups much less an in-house team. Outsourcers come with skills already in place, so you do not spend time training. The low costs and knowledgeable talent means you can get infrastructure developed faster and your company launched sooner.
My one tip for success is, before you engage long term, test a couple developers and make sure the code is clean. There are numerous horror stories, so make sure that you have someone who understands code to manage this outsourced team.