David Cummings on Startups

Outsourceable Software Development Projects for Startups

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David Cummings

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Technology startups should make software development one of their core competencies. All too often when talking to entrepreneurs I ask the “how are you building it” question and they quickly say they’re outsourcing it — I cringe momentarily. Most of the time they say they really like their outsourcing firm but that things are taking longer than expected due to a number of factors. Software engineering still has a fair amount of art to go with the science.

Projects that are fairly small and extremely definable are outsourceable for startups. These projects are almost always complementary to the main product and interface via APIs or some other mechanism. Here are some example projects that are readily outsourced:

  • WordPress plugins (via a WordPress expert)
  • Browser plugins
  • Microsoft Office/Microsoft Outlook plugins
  • Simple smart phone apps (ones core to the business need to be done in-house)

Any software development can be outsourced but I recommend technology startups do their engineering in-house and only outsource related projects that plug into their core application.

What else? What are your thoughts on outsourceable software development projects for startups?

Comments

8 responses to “Outsourceable Software Development Projects for Startups”

  1. Geoff Avatar
    Geoff

    What do you think about outsourcing design? Increasingly, I’m feeling like design is a competitive advantage, and as important as development. We have inhouse development, but have had our eyes open for a great designer, and will likely bring someone on if the opportunity presents itself.

    Reply
  2. Adam Avatar
    Adam

    Not a fan of outsourcing core software development or design. You want those competencies to be with your team for the long-term. What happens when something breaks or you need to make a quick design update? What happens when you run into database scaling issues?

    I am a fan of using outsourcing to augment – but not replace – your team. PSD2HTML is a great example of an outsourced service that can expedite development.

    Reply
    1. Geoff Avatar
      Geoff

      +1 for the PSD2HTML shout out.

      Reply
  3. Mike Schinkel (@mikeschinkel) Avatar
    Mike Schinkel (@mikeschinkel)

    Hi David,

    Absolutely!

    Coming from a shop that companies can outsource too, we decline when someone asks us to build their core product or service. We are best when we stick to building WordPress plugins that are complimentary to SaaS or websites with robust existing revenue streams. From tedious experience we’ve learned it’s best to turn away anyone who asks us to build software they dream of one day making them rich.

    Why? A firm like mine simply can’t be agile enough to address the needs of a startup whose main product’s requirements are constantly evolving. And a startup in ramen noodle mode simply can’t afford to pay the rates that a proper agency needs to charge to be profitable.

    So yes, a startup must build it’s main product, and it must build it with an in-house team. Case closed. 🙂

    -Mike

    P.S. Of course a more mature company with an existing revenue stream or a well funded startup is probably better outsourcing anything tangential to their core business instead of building it in-house. We’ve seen several companies including one local high-flyer stumble badly when they try to keep everything in-house. Companies really should devote their attention to their own core products and services and not get distracted with shiny-shiny just because they have in-house developers.

    Reply
    1. Mike Schinkel (@mikeschinkel) Avatar
      Mike Schinkel (@mikeschinkel)

      Damn, I just read your post more closely and noticed the reference.

      Blushing. Thanks David! 🙂

      Reply
  4. swagner27Steven Wagner Avatar
    swagner27Steven Wagner

    I second this. If you are truly in the software business, then you need the expertise to develop and maintain your core offering. People forget outsourcing requires additional time, man hours and oversight.

    Contractors can only perform at their best when some one from the business can guide them to the goals.

    Reply
  5. Charles Brian Quinn Avatar
    Charles Brian Quinn

    Great points, but many companies are having a hard time attracting this type of talent. “Go hire a developer” is great advice, but after giving them this advice, DC, you’ll have to point them to several other articles on this blog about keeping those software developers (the ones who can do the art and science parts you alude to) happy.

    A trend we (a company who does outsourced software development) are seeing is the Apprenticeship or a program to “graduate” customers (we do this). Might be worth blogging about soon, DC.

    We say: “OK, we’ve rapidly built your prototype and it’s got legs, customers are biting, the R&D work is done, we can help you scale, but time to bring in the in-house developers, now.”

    This has worked well for several of the companies we work with, but it’s tough.

    I offer another use for good outsourced software development shops, and that is to serve as your R&D wing. Test, iterate, build, then pull in-house. A slight variation.

    Reply
  6. Waqas Avatar
    Waqas

    Really good points for someone who is just going to need some projects for start-up his business in software industry

    Reply

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