Founder Institute

Vendors Outsourcing Software Development
January 2012 Steve Iverson


My philosophy on outsourcing. 

What can be outsourced and examples for each. 

Startup software development tips.

Outsource Everything Possible


What¶s impossible to outsource? 

Vision  Passion  Culture  Leadership

What¶s hard to outsource? 

Product management.  Project management.  Focus groups & research.  Sales & customer relationships.

Outsourcing ³Core Technology´

Definitely. Why not?


Vendors You May Need
G&A Legal Recruiting Intranet / Email Taxes Accounting Payroll Marketing Bundling Affiliates Analytics PR SEM SEO

Vendors You May Need
IT Co-location or cloud Backup Monitoring CDN DNS SVN Software Programmers DB Development Libraries Graphic design QA


What¶s also hard to outsource?

Anything that costs money.*

* if you don¶t have any.

There are lots of ways to fail 
Wrong product / vision.  Wrong market.  Wrong team.  Poor timing.  Under capitalized.  Your product doesn¶t work, it¶s buggy, it¶s clunky, it¶s ugly, it¶s hard to use.

Building Great Products


Agile Startup Development 
Marathons are completed one step at a time. 

Get customer feedback early and often. 

End-to-end functionality with each iteration.

When Is Software Done?
1. It compiles. 2. All unit tests pass. 3. It works with all supported platforms. 4. It works with old releases. 5. You know how to deploy it. 6. You can monitor it. 7. You can measure its performance.

Tips for Managing Engineering Teams 
       Take ownership. They are your team members and your responsibility. Treat them as an extension of your current team. Share your ³grand vision´, but assign and measure extremely short tasks. Daily engineering calls. 3 to 5 minutes per developer. Daily check-ins. (ideally fully working code) Be available (Skype/IM) as much as possible. Follow up with written confirmation. Practice test driven development.

Working Remotely 
Set clear expectations. 
Expect more productivity.  Expect less privacy. 

Stay connected as-if you were all together. 
We live in the future. Take advantage of that. 

To avoid while remote: 
Brainstorming / white-board meetings.  Personnel issues and mentoring.

Offshore Development Terms
Shopping  Get resumes and interview individual developers.  Hire only the best developers - locally or offshore. The Deal  Contractually assign specific developers to your contract.  Minimum number of team members: 1  Term of agreement: 30 days (or less) cancelation.  90+ days required notice to remove a team member.  Credit if a team member quits, leaves, or is removed from the project.  Typical rates: $10/hour - $30/hour; (Argentina, Philippines, Russia) .  No billing for: missed days (US holidays, local holidays, sick, vacation, etc).  No fee to replace team members.


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