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30 Successful Startups That Outsourced Their Development

20 April 2017 | 0 comments | Posted by Che Kohler in nichemarket Advice

Outsourcing  the build of your tech startup

Having a tech start-up has become very popular over the last 10 years with guys companies like Facebook, Whatsapp and Instagram paving the way for everyone with a bright idea thinking they can build the next tech giant. The biggest stumbling block for a tech company naturally is development, in the case those I've mentioned earlier they not only had the foresight and a great idea but they also had the ability to sit down, strap themselves to their Mac or PC and code for hours creating a prototype that they could take to market.

Keeping it in-house

At this point founders have two options, keeping it in-house by finding a technical co-founder is a very popular way to go but offering shares and diluting your equity right at the beginning of your business can prove to be a risky move down the line. While it's also a risk for someone with development talent to pass up lucrative offers in favour of potential financial rewards in the future.

Outsource services

The two cases I've mentioned above isn't the case for every startup visionary and having outsourced your build can be a tough task, the talent you hire or outsource may not see your vision, you may not be able to articulate it properly, they may not have the technical expertise, you may not have the resources and a host of other factors.

On a mission to create your vision

Starting a venture and developing your product or service requires working quickly and efficiently. You need to ensure your startup offers value in terms of innovation, quality and convenience, even though you have limited resources and may be racing against the competition to be first to market outsourcing can do just that if you find the right partner. Believe it or not, many worldwide corporations obtained their platform through outsourcing development.

They've proved that startup outsourcing can not only work for you but you on a path to future success. Check out the list below and you may be surprised at the companies that feature.

Startups that outsourced their build

  1. Slack: Now valued at nearly $3 billion, this company used outsourcing to develop its solution in its earliest days.
  2. Alibaba.com: Known to many as “China’s eBay.” Jack Ma, the man who created it, and his friends outsourced the development when they had just started the venture.
  3. Fab: This large startup partnered with developers in India to maximize funding while scaling up when their business showed signs of growth.
  4. Skype: They used a team of developers in Estonia to help them build out their business.
  5. Klout: To get its technology in the right place before launch, Klout relied on many outsourced developers.
  6. AppSumo: The company has used many freelancers in various fields, including marketing, content and IT to grow its business.
  7. Staff.com: Serving as a company that offers outsourced talent and freelancers for other organisations, Staff.com utilised the same model to grow from a start-up into a globally successful business.
  8. Branchout: This app was created entirely with outsourced development.
  9. Github: The company has used numerous people who completed development work virtually from home.
  10. Basecamp: The same practice of outsourcing worked for Basecamp as it developed itself into a technology leader.
  11. AlertBoot: The company decided to outsource infrastructure-as-a-Service (IaaS) and cloud hosting to speed those areas of development.
  12. MYSQL: From the start, the company believed and proved the success of a growth strategy that included using a mostly outsourced staff in various countries to ramp up operations in each location.
  13. SeatGeek: This company found a considerable cost benefit to outsourcing specific tasks to talent in other countries. That helped them build their infrastructure quicker at less cost than hiring in-house staff.
  14. Oculus Rift: This startup never outsourced their entire product because its value is grounded in technological innovation. Nevertheless, it used a team of outsourced development to boost the speed of production. Thus, outsourcing consisted in the work that is not a part of the company’s intellectual property.
  15. Groove: Alex Turnbull wanted a co-founder with a technology background. His product background wasn’t sufficient to handle the development part of building a software-as-a-service company. When he couldn’t find one, he made the decision to outsource the technical aspects of growing his business to a firm. In doing so, he realised he’d be able to retain 100-percent ownership of his company while also saving the money he would spend on full-time workers.
  16. UpWork: UpWork specialises in crowdsourced work, so it’s no surprise the company was built using a team largely made up of contractors. The company is the product of a merger between the two largest freelancing platforms, ODesk and Elance. As Stephane Kasriel, CEO of Upwork, pointed out, 150 of the site’s 200 product and engineering workers are freelancers they hired through the ODesk marketplace.
  17. Squawker: This company partnered with an outsource provider to build its platform solution.
  18. JPay.com: Outside developers built their technology and infrastructure. They used people in India, China and Israel for quality assurance, engineering and hardware. It helped to have the outsourcing in place to handle growth. They eventually sold the company to Securus Technology.
  19. Splunk: This company, known for search and analysis of data, has used outsource agencies to find the talent that rapidly developed their infrastructure and solution.
  20. Opera: This web browser company relied on developers in other countries to create and implement its platform.
  21. Pingar: The company helps organizations with data analytics. While establishing itself in its industry it called on outsourced talent to develop its business.
  22. Axeda: The company relied on developers to create the software and platform to offer its cloud-based solution.
  23. Solix: Even technology outsource companies have used outsourced talent to create its infrastructure as Solix has done.
  24. Cloudmunch: This Platform-as-a-Service (PaaS) company utilized an Indian outsource company to cull talent it needed to start up its operations.
  25. Gliffy: This web-based diagramming tools company has turned to outsourcing for specific aspects of its technology development.
  26. Net2Text: The company outsourced the development of its mobile payment platform.
  27. Proximate Global Inc.: This company used an outsource service provider to create a location-based service for smartphones called Face2Face.
  28. Mailburn: This iPhone email client solution developed thanks to a partnership with an outsource service provider that helped with many of the technical aspects of the solution.
  29. Mindspark: This mobile app development company has used outsource providers to create its business and many of its current apps.
  30. Google: In its initial days, Google had only 60 people. As a startup, Google relied on outsourced development which it also does today. Now, it’s called outsourcing to subcontractors and is used by many big tech companies. This practice of product development has turned Google from a little startup to the most powerful internet giants giving a prominent example of the most successful outsourcing company.

Outsource isn't all bad

Yes, there have been many horror stories when it comes to outsourcing and it's the founder's duty to apply due diligence when deciding on which option to take when developing their platform.

All I'm saying is that it's not impossible and can be done, outsourcing your development, marketing and customer service can prove to be a masterstroke as you gain access to highly skilled labour at a fraction of the cost and produce ROI that traditional hiring may not be able to offer. So don't discount the value the outsourcing of talent as an option in the future.

Contact us

If you want to know more about outsourcing development don’t be shy we’re happy to assist. Simply contact us here

Tags: development, Startup story

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