At a recent WeTeachMe event held at the York Butter Factory co-working space in Melbourne, we were asked to speak about Outsourcing for Startups. [slideshare id=13302445&doc=startupoutsourcingv2-120612233643-phpapp01]

What areas of outsourcing apply to startups?

We define outsourcing as “a highly-skilled services marketplace”. This implies that you’re using a marketplace environment to procure knowledge work as a service. 3 types of sourcing can easily be used by startups. When you have:

  1. A defined scope of work and clear process, use Outsourcing, typically offshore to get the cost benefits.
  2. A defined price and time expectation and want to generate many options, use Crowdsourcing contests, such as 99designs.
  3. A defined specialist skill requirement, use freelancing to sub-contract offshore resources.

Outsourcing myths.

  •  Low price = Low quality.
  • Freelancers are unmotivated.
  • Your IP is at risk.
  • Anyone who is not local or sitting next to me is less skilled.
  • There is a high management overhead.
  • All outsourcing is from India or Russia.
  • Paying someone $15 is abuse.

Why should a startup consider outsourcing?

As a startup, you have to achieve a few key things, like speed to market, agility, rapid iteration, flexibility, rapid scaling, testing ideas, iterating and many menial , labour intensive tasks, all as cheaply as possible. This is a clear match to the benefits of outsourcing. You get access to a flexible, highly skilled, affordable labour force that scales almost infinitely and does so rapidly, while simultaneously accessing much cheaper labour for data entry, etc.

What can startups outsource?

Idea Stage

Freelance:

  • Naming (NameRefer)
  • Funding (Kickstarter, Pozible)

Engagement Stage

Freelance:

  • SEO Setup (oDesk)
  • Landing Page Setup (oDesk)
  • Mailchimp Setup (oDesk)
  • Copy for launch Page (oDesk)

Design Stage

Crowdsource:

  • Logo Design (99Designs, DesignCrowd)
  • User Interface Design Wireframe Design (CrowdSpring)

Build Stage

Outsource:

Freelance:

Scaling Stage

Outsource:

  • Monthly Support (GetViable)
  • Dedicated Development Team (GetViable)

Providers

  • Elance – best for complex projects on a fixed price basis.
  • ODesk – best for hourly work.
  • Namestation – Naming.
  • Kickstarter – crowdfunding
  • 99Designs, DesignCrowd – logos, business cards and user interface design
  • Crowdspring - user interface design

These are some examples that we’ve had success with, and a few providers to get you started. There a many more focused on specific areas, so look around or ask us in the comments below.

Getting Quality Results!

    1. Ask yourself “what skill is not core to my startup?” – eg; data capture, mailing leads
    2. Commodity or Talent?
    3. Be specific.
    4. Filtering question is gold!
    5. Aim for the best people or team.
    6. Choose wisely – interview with the same diligence as you would a local.
    7. Research your pricing – oDesk, eLance, Freelancer, etc
    8. Manage them as part of your team. Same courtesy, respect, patience, diligence, guidance.
    9. Test them with a small, sample task.
    10. Test with a low impact “work package”
    11. Start with hourly, move to Fixed.
    12. Structure smart milestones based on outcomes. 15%, …….., 30%
    13. Fire fast. Cut your losses and move on.

This should get you started with outsourcing and help you focus on the core skills as a startup. We’re here to help, so sign up to stay updated or comment below if you have any questions. Now go and #GSD!

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