360° Coverage : How outsourcing can kill culture, good products and innovation.

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How outsourcing can kill culture, good products and innovation.
Photo Credit: Forbes Business

How outsourcing can kill culture, good products and innovation.

Dec 20 2013, 1:24am CST | by

/> When met with technical challenges some startups look to outsource their code development to third party contractors. The reasons for this vary for each startup, but typically include the need...

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40 weeks ago

How outsourcing can kill culture, good products and innovation.

Dec 20 2013, 1:24am CST | by

/>

When met with technical challenges some startups look to outsource their code development to third party contractors. The reasons for this vary for each startup, but typically include the need to save money, save time or fill in a technical resource gap. This approach is dead wrong. Startups need a strong technical founding team in order to execute and ensure their products stay true to their vision.

Team and culture will suffer

Building a team that relies heavily on third parties for software development, at the earliest stages, will cause the core product to suffer. Having a core team of engineers who are constantly working on a product creates a culture and energy around that product that begins to take on a life of its own. I know this might sound fluffy and metaphorical, but it is the truth. Your products are a representation of your vision being actualized.

Having people who are totally focused on building that dream enables you to focus on bringing to market the best possible products. When a third party contractor is involved they will never be as committed to your cause as you or your team will be. They can’t be. They’ll view you as another source of revenue to keep paying their bills and grow their own business. They also lack the cultural identity and message you wish to instill in your products. They aren’t talking to your customers, getting user feedback or taking part in team discussions. Contractors will hopefully build to specifications that you outline for them and nothing more.

Intimate knowledge of your own technology will suffer

Innovative problem solving that can lead to out of the box thinking can drive better products, additional features and an overall better offering. If you outsource your core development you could be shooting yourself in the foot. Issues that I’ve seen emerge include non-scalable architecture, poor code that is not reusable, and a general lack of understanding your technology backbone.

Inevitably, you will also create a reliance on your contractors to do QA and bug fixes going forward.

Don’t even think of any acquisition

Heavily outsourced companies are also less interesting as acquisition targets for larger companies. Most startups are acquired for several reasons, a major one being the team. If you outsource your developers then your value proposition diminishes.

When outsourcing can benefit a company.

Outsourcing isn’t always a bad thing. A good example from our company, Late Nite Labs, was when we struggled with a user design challenge for a specific workflow of one of our products. We had an idea of what we wanted the experience to be, but we were having a hard time putting that onto a wire frame. Having worked so deeply within our platform it was a big challenge for us to think differently about how users could go through our system.

That’s why we called upon an expert UX designer to work with us. I want to be clear that the person we used probably spent more hours listening to our needs and story boarding user scenarios, as he did building the wire frames for what would eventually become an important new piece of our product. It also helped that he came from an education technology background and understood our customer base very well.

In summary, outsourcing is a slippery slope and one that should be taken cautiously especially at an early stage of your product development. It has its place in a company, but I would urge most startups to think about their long-term goals and where they would like to see their company down the road.

Source: Forbes Business

 
Update
2

4 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

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Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
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4 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double traged ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

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