Internet startups always have a variety of voices to consider whether to use technology outsourcing or internal contracting. I have some experience in technology outsourcing and internal contracting, and I am now a co-founder of a company that specializes in outsourcing programmers to start-up internet companies.
In the past, I had a wealth of experience with companies that needed to quickly complete product manufacturing and market positioning, and through communication with these companies, I had a deep understanding of the advantages and disadvantages of using technology outsourcing and internal contracting methods.
So, here I can share the question of what to think about when considering whether to use technology outsourcing.
1. What are your business objectives?
Your business objectives and product range constitute the most important reference for deciding what product development path to use: Are you creating a new product that you have never tried before? Or are you just improving an existing product? For the former, you are faced with a lot of uncertainty, these products are still waiting for production testing and market adaptation, your new product assumptions need to pass the market analysis of other existing products in the market to obtain production license. In this case, startups tend to use outsourcing in order to reduce risk.
If your product is in the category of a second problem, you will have to take a lot less risk because you are re-developing it on the basis of successful products. Now, you just need to use your ability to sell these ideas to potential customers and repeat the product development process.
2. How much power dilution do you accept?
Despite the many benefits of co-entrepreneurship, there are many successful business examples of entrepreneurship alone. Would you like to share most of your company's interests with outsiders? If the answer is no, it is the best choice to start a business alone. Co-founders ' ability to complement one another does bring many benefits to the business, but if you already have good ideas or are adept at market management, you can outsource the part of technology development to others at an early stage without diluting your rights. After that, once you have finished the product market positioning, you will be able to hire the team to continue with the internal manufacturing of the product.
3. When will the product be put on the market?
I believe every start-up company wants to put its products into the market as early as possible. However, the usual time to invest in the market is not satisfactory. If the use of in-house manufacturing products will require the team to have at least at the same time operational analysts, ui/ux designers, engineers and quality supervisors, and these positions are extremely important and require a high degree of specialization. It takes about 3-6 months to compose such a team, and in the same amount of time you can already put the product into the market if you outsource it. Therefore, it is an obvious decision to outsource product development when conditions are not allowed.
4. Do you have sufficient funds?
The adequacy of funds has a significant impact on the use of outsourced services. Most projects use outsourced services mainly because of budget constraints. Directly, the initial version of the product will be outsourced to significantly reduce the budget. Many of today's popular products are technically outsourced in the early stages of their development: fab.com, for example, and a $2.8 billion slack. (Translator Note: Fab.com is an e-commerce company founded in 2010, mainly selling daily creative design works; Slack is a company that develops enterprise instant messaging software that has grown rapidly since 2013, and has been known as the "Fastest growing enterprise Application". ）
For a start-up company, it is important to have the right product market positioning in the early stages. As a result, technology outsourcing can help you get your products to market faster with lower costs, so you can quickly understand market demand.
In general, when deciding whether to outsource the technology, you can answer these questions to help you make a decision, remember not to waste too much time to compare the pros and cons of outsourcing and internal manufacturing, because each decision has two sides.
Do Internet startups need technology outsourcing?