Can Offshore Work for a Startup?

If you had asked Chris Samuelson six months ago if he wanted to consider outsourcing some of his software development workload, he would have said no. But as it was, tech startup Varsity News Network had a developer in India on hand, and Chris was assigned to manage him.

So how did six months of working with a mobile developer named Mohan make Chris a believer in outsourcing for startups?

His concerns were rooted in his prior experiences with other startups. “We tried contracting locally, contracting out of state—and to mix success we found a lot of times the developers we’d get that we contracted, a lot of times they’re very opinionated.” Opinionated is fine in some situations, but what Chris had suffered from was a lack of control over his own development. When Chris would bring a project to a contractor, the contractor would say, ”We’ll do this thing, but we’re going to do it our way on our time on our terms.” Which is fine, as long as you don’t mind a hands-off approach to your development. But Chris feels differently. “In the startup world where we want to own more of that, and it’s a product that we’re going to carry through…so after they build it I have to support it.” Plus, a tech startup needs some flexibility. Says Chris, “Week to week you can have shifting goals, you can have shifting strategies…all of a sudden you’re re-negotiating rates and the whole thing becomes kind of a mess. That whole thing turned me off to trying to outsource stuff as a start up.”

Chris isn’t unique in how he felt. Many of those working for tech startups feel the same, and they aren’t afraid to share their opinions. “Agencies are like baby-sitters. They take care of the project, but they have no love for it,” remarks one developer. Says another, “[Agencies] are less agile and have longer product cycles that require more documentation and usage assumptions, which still requires an in-house tech to properly manage.”

If offshoring for startups just doesn’t seem to be worth the trouble, then why even try?

Maybe for money reasons. Maybe because they couldn’t find the talent they need. Maybe they don’t have the capacity to do it in house. A lot of startups assume that they can build their app in-house at the same pace that an agency could—but the reality, unearthed by engineer Farhan Thawar, is that if your team isn’t complete, building your app inhouse will take 4x the time of an agency.

So must startups choose between domain control or speedy output? Not necessarily.

If you can pick the right vendor, you won’t have to choose.

James Thomason, a silicon valley entrepreneur, writes adamantly about the importance of offshore teams contributing to the success of silicon startups, startups that would have otherwise failed. He writes, “If your software company is struggling to make the model work, in all likelihood the problem is you.”

If you’ve failed, maybe the problem is you. Maybe the problem is only partially you. Maybe the problem is that your vendor just wasn’t the right fit for your company. Nevertheless, one element of the offshore model is essential to making it work.

There are plenty of articles on choosing and evaluating the right offshore vendor, but perhaps the most agreed upon thought out there is that you must have good communication with your offshore team. A contractor which doesn’t want to hear from you is never the right fit. Thomason quotes tech consultant Avinash Agrawal, who says, ‘“Total two-way transparency and relentless communication” are the key to creating clear responsibility and accountability between teams. “Offshore teams often suffer from ‘remote site syndrome’, and feel excluded from information and the decision making hierarchy.”’

So how was it that Chris from Varsity News became a believer? By a vendor with communication at its core.

“When we worked with Mohan it was nice because he really was a staff aug. He came on as anything just like another team member and really worked like another team member,” Says Chris. (A lot of people are wary of staff augmentation, too. Here’s an article discussing how long-term staff augmentation is possible) He goes on—“We had feedback like another team member. Like, ‘Hey, I’m building this thing and the feature just doesn’t seem right, are you sure you want it to be done this way?’ Or, ‘Hey I was working on this here’s a  cool idea.’ These are some things I didn’t expect from somebody who was outside the company, so it made him feel a lot more like he was a part of our team…He participated in the majority of our workflow that we do, just like any other staff member.”

Moral of the story: there’s not much that can be done to change a preconception—Chris didn’t change his mind until he finally discovered a vendor that was right for him. When integrated effectively and with good communication, an offshore extension of your team could be the difference between success and failure of your startup.

Checkout what else Chris has to say about his offshore experience in the video below

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