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How Should You Outsource Product Development?

outsourcing sign

Have an idea ready to be put into production? Don’t have a technical cofounder who could build the product/service? Thinking you could outsource product development?

While having a solution built in-house by a techie is my personal choice over outsourcing however if one wishes to accelerate things initially by outsourcing, I think it’s a good alternative. But I strongly insist, while outsourcing may give you fast results as compared to just a single techie working, outsourcing is NOT a cake walk and one MUST tread with caution if you wish to make it work for you and not burn your hands.

Why you would choose to outsource your development is not the focus of this post however assuming you have decided to outsource, you must think of each of the following points carefully:

-          Clarity/Fine-tuning: Before you sign off the development contract with your vendor, make sure and I really mean make sure that you are absolutely sure of what you are giving to the vendor to develop. You can’t hand over requirements to the vendor and expect to fine-tune your idea in parallel. It’s disastrous; the vendor will charge you for to and fro and it will be a lot of waste of time too. Remember it’s a vendor and not a cofounder where you have a lot of flexibility to go back and forth. Other than around 20% deviation(which a vendor should give you), you will need to be very thorough that the requirements have been verified, market tested and validated before you pass them on to the vendor.

-          Wireframing: I can’t emphasize this enough how crucial detailed wireframing is for a vendor. We have zillion ideas in our head but we usually tend to communicate only 60% to the vendor. Say, if we had a certain design in our minds but the vendor (due to lack of specification) developed something else that doesn’t fit your imagination, now you would need to get that changed. Therefore, be as detailed as possible with detailing your idea as a simulation of the actual web page. The simulations are called Mock Ups or Wireframes.

There are a lot of wireframing tools available online; both free and paid. There’s Balsamiq, Lumzi; Google “Wireframing and/or MockUp tools“. It’s a bit of pain and hard work to do the wireframing yourself but trust me it’s worth all of that pain and hard work. You will thank yourself as whenever there will be a conflict between you and the vendor, you will have a proof with yourself.

-      Document: An important one again; Document the process flow. Make a detailed specification and Use Case document that shows user journey, usage of your product/service, deliverables and the expected timelines very clearly. It has two-fold benefits; first off – You will observe that as you detail out the process, your idea begins to not only shape up but has the power to reveal the basic flaws within it. It may happen that things that made sense in your head will no longer seem to be sensible when you have really jotted down your idea on paper and you will realize that you need to validate and fine-tune it more.  On the other hand, if you do this, you minimize any potential conflicts arising between you and the vendor in the future because you will have the document of deliverables for future reference.

In addition, make sure you do all communication in writing; don’t communicate requirements/changes over phone or informally. Keep all of your communication in black & white.

-        Quality: No compromises on the Quality please! If a vendor sounds too good to be true, shun him. It’s very likely that he will produce crap and you will feel that saving turned out to be expensive on the contrary. A good vendor will be expensive (likely) but go for him.

-        Reference: Ideally, go to a vendor by reference or if you personally know him. This becomes extremely important when you need to resolve conflicts as some form of common personal relationships play a part in resolving the issues amicably.

-        Contract: Read through the terms and conditions of the Contract properly. Clauses such as confidentiality, ownership of the code, transferability, and payment terms, non-disclosure all have to be in place.

Remember, (quality) Outsourcing is expensive. If you are really itching to start quick and out of a technical resource, probably it’s beneficial to just get your MVP rolled out then slowly plan to take the development in-house. As a long-term option, if you have lots of money to spend, it might be fine to keep the product with a trusted vendor, however for startups on tight budgets, a capable in-house technical cofounder is the only sustainable and effective option.

Did I miss out any other important points here to be considered while Outsourcing? Do leave your thoughts and/or experiences in the Comments section below.

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ABOUT THE AUTHOR

NIDHI KAPOOR - Nidhi is the co-founder of FounderMates.com. She holds an MBA in Innovation & Entrepreneurship from Imperial College, London. Prior to starting FounderMates.com, she worked with 2 reputable startups in London. One of the startups was as young as a year old where she was the first hire while another was almost 5 years old. This has been an enriching experience for her in understanding the dynamics and needs of a startup across a broad spectrum.

Nidhi can be contacted at nidhi.kapoor@foundermates.com

You can read past articles by Nidhi Kapoor here: Link1 and Link2.

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Summary
Article Name
How Should You Outsource Product Development?
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Things to keep in mind when you plan to outsource product development. Outsourcing is NOT a cake walk and one MUST tread with caution.

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