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STARTUPS AND OUTSOURCING: A COMPATIBLE COMBINATION?  /
May 8, 2019
Viktoriya Polyarush Social Media Coordinator, an avid reader with the passion for technology.

The early stages of a startup are incredible—your vision is finally coming into the light, and you are ready to tackle every problem and wear every hat to build your brand.

Certain tasks, as you have undoubtedly come to understand, take a lot more time and are better off left in the hands of a professional to ensure that you do not create unnecessary headaches. Basically, the main reasons to outsource are:

  • cost,
  • faster time to market,
  • quicker team ramp up,

and the main reasons not to outsource are:

  • time zone differences,
  • culture differences, language and communication problems,
  • the quality of received code,
  • and safety.

Even though the pros are obvious and seem to be very convincing: it’s cheaper, it’s faster to get on the market and it’s quicker for the team to start working (as you don’t need to recruit them, set the environment etc.), the cons are quite disturbing. Some of them seem to be overblown, like the language differences – after all you don’t sign any agreement right after seeing the offer; you talk to the people you consider to work with and if there is any problem with understanding each other, there are plenty of other service providers to choose. Some of them, however, like the risk of lowering quality of the product, can be really deterring. People who don’t have any experience with outsourcing often have problems – they don’t know what to focus on, so they focus on the price and tend to underestimate other factors. This may lead to bad experience: receiving product of a bad quality, that cannot be further developed by their in-house teams. Instead of saving time and money, they are wasting it. To avoid this nightmare scenario, you should take your time and do your research. Check:

  • Your potential outsourcing provider’s experience. If they have worked on the projects that are similar to yours. If they managed to create X MVPs for some startups, they will probably manage to build yours as well.
  • Their references. Note that not all the companies let the outsourcing providers publish their references! So if you don’t see many references on the website, don’t hesitate to ask for them.
  • The framework for managing product development. Keywords to remember: Agile, SCRUM.
  • Their technology stack and procedures. It is good when they have automated Continuous Integration and Deployment, and Quality Assurance every step of the way, and when they set high code quality requirements.
  • Their security standards. Data protection is particularly important when it concerns customer records or invoice details. According to Charles Parks, it is good to choose countries within the EU which abide by the same data protection legislation.

Having these in mind, you will mitigate the possible risk of bad outsourcing experience at the very beginning. Especially the one related to the product’s quality.

It is also worth to remember that deciding on building your own team, especially in the case of startups, is not less risky at all. You face a lot of challenges: you need to reach people who could work for you, convince them to join your startup and have enough money to secure their salaries. You also need to consider changing demand for human resources. At some particular stages of a project, you may need a different number of developers to make it and to maintain it.

With the growth of virtual offices and teams, outsourcing continues to grow in popularity. For startups, it’s also a great way to save money by avoiding the costs of hiring employees that may require a work space and benefits. There are some examples of the services used:

Big Data and Analytics

Small-business owners can use cloud-based tools to collect data about their processes to determine existing or potential roadblocks to efficiency and productivity. Without good tools in place, data can be skewed, presenting a different picture of the overall business. With information on task durations, conversion rates, customer churn, or average revenue per user, for example, you can see how well your campaigns are working, see how effective your landing pages are at capturing leads, which pages are most popular, and other factors.

Simply measuring the business with data isn’t enough. To determine where the business is doing well and where improvements can be made, it’s important to analyze the data you’ve collected.

InsightSquared is an example of a big data platform aimed at small businesses. The app creates actionable reports out of your data. With such information, a small business can focus on making data-driven decisions, particularly in making adjustments to marketing campaigns, production, or other aspects of the business.

Customer Service

Not all companies can afford to maintain an in-house customer service team. Likewise, not all small businesses can afford to outsource their customer service divisions to an offshore team. A good solution is a cloud-based help desk, which enables customers to find useful information themselves, and then chat directly with customer service staff for additional information.

Salesforce has its own help desk application called Service Cloud, which personalizes the experience for each customer. It also has multi-channel support, which enables different departments to respond as necessary. Zopim is another popular help desk cloud app. Both platforms can help improve engagement with customers, as well as outreach to prospective customers who may be browsing through your company’s products and services.

Many small startup teams are too busy raising funds or actually running the company to market it effectively, analyze data, or provide extensive customer service. I know successful founders who feel that devoting time to marketing and some of these other areas distracts and maybe even detracts from their ability to build a viable product, at least at first. Outsourcing these marketing, automation, and customer outreach services will get around that, enabling a business to focus on facilitating growth and establishing sustainability.