Offshore Development for Startups: The Five Pillars of Success

Everyone loves the classic story about bootstrapping the company in your garage, spending late nights eating pizza and fixing bugs, then finally hitting it big with your 100% home­grown product.

And for many startups (especially those with more than one technical co­founder) this can be a reality. For everyone else, technical resources are expensive and hard to find. Outsourcing is an increasingly viable option.

There has always been, however, stigma attached to the subject of outsourcing for startups. We’ve all heard the train­wreck stories ­ the ones about how offshore teams write terrible code, steal your ideas, disappear completely, or have impossible to understand accents. And yet, the outsourcing world continues to grow at an incredible rate and more startups are taking advantage of it every day.

So, how can your startup outsource their development without turning into another disaster story? The answer is simple: you do the exact same things you would do if you had a domestic team. You manage them well, provide leadership, motivate them, control quality, keep organized, and pay attention at every step of the way.

If you are considering going offshore, here are five key points to help you succeed.


Why do so many offshore projects fail? The answer is that offshore is harder to manage than domestic, and most managers suck to begin with.

How many statistics have you heard, over the years, about the percentage of projects that go over budget or miss their deadlines? Software management is tough, and when your team is 7,000 kilometres away, it gets even tougher, ­ so we see a higher failure rate.

But there is not much evidence that the failure rate is dramatically higher or that a good manager will not be successful with either model. As rule, if you are are stretched­thin and don’t have time to mind your projects to begin with, you’ll have big problems dealing with an offshore team. However, if you are ready to invest your time and get that ROI that offshoring can bring it can work very well.


Given that offshore management is harder than in­person management, you have to ask yourself, “Am I good manager?” If you said yes, you are in good company ­ about 90% of people say they are good managers and yet more than half of projects fall apart, which suggests otherwise.

A good software manager can do things like writing great specifications, train people on tool use, get into the code and understand what is going on, and do real risk management and analysis for schedules and budgets. Can you do those things? If you aren’t so sure, you can hire a manager to run the project, but keep in mind that a good technical project manager is very pricey, and will usually cost more than the offshore developers.

One thing you can almost never do is rely upon an offshore team to manage the project for you ­ this is by far the most common point of failure in outsourcing. If an offshore team promises to ‘fully­manage’ your project, be skeptical. Ask them all about the qualifications and experience of the manager, and if the manager isn’t incredibly impressive with perfect language skills then run for the hills.


In a perfect world, we’d tell our trusty development team what we need and they’d come back in a few weeks with a perfect product for us. Alas, no such world exists. No matter how good your project manager is (if it’s someone other than you) you need to keep a tight grip on the day to day, and pay attention to the details.

In some scenarios, it’s best to delegate work then trust your team to perform. In software, that doesn’t always work and in outsourcing, it rarely does. Be sure to answer every developer query quickly, pay attention to the bug and workflow tracker, and test every release yourself.

Sounds time consuming? It is, and while you might save money by sending work offshore you will wind up spending more of your own time managing it as a result. It is usually worth it, but if you have more money than time, you’d be better off hiring an in­person developer team.


Offshore developers are notorious for advertising, spamming, and making everyone aware of their presence. The outsourcing world is a noisy place, and with no barrier to entry there are teams making wild claims and promises to win your business. The time you spend finding and engaging the right team is time well spent and should be part of your budget. Projects gone wrong are very expensive and you want to get it right.

The first things to do is to write a solid specification, with wireframes or whatever other materials make sense for your project, and to present it in a professional manner to outsourcing companies. You need to make a good impression because while the hungrier (and usually weaker) teams are aggressively pursuing your business, the good ones are usually very busy and don’t want to bother with an ill­prepared client. So, be sure to look like a good client from day one.

The second thing to do is to send a trial project. This is the best way to find out if there is a good fit. Look for tasks that will result in some useful deliverable even if the fit isn’t good ­ consider ui/ux design or other front­end type work that could be used by the second team if the first one bombs out.


Keeping a team motivated is never easy, especially when the team is 7,000 kilometres away. When your developer’s impression of you comes through email and skype, the human element is really reduced and it can be hard for developer to stay motivated and emotionally connected to the project.

If travelling overseas for some Face­time isn’t possible, try lavishing your team with praise and gifts. Most offshore teams find their clients to be distant and demanding ­ try being the reverse. Be sure to thank your team at the end of the week, take a few minutes to chat with them about their families or personal lives, and give them praise for a job well done whenever you can.

Ask your team’s manager about what kind of a gift your developers would most like, and be sure that the gift is geared towards the developers (not the manager!). Ideally the gift will be timed with a regional event or holiday on their side (this shows that you’re paying attention) and will be an office­type gift that they will enjoy but is not too personal. In most cases, you can arrange the gift to be procured by their management so that you just have to pay for it without dealing with shipping, etc.

Great gift ideas include things like fancy office chairs, iPad Minis, Xboxes, and other fun office stuff!

In conclusion, outsourcing for startups is growing every day and it can be incredibly successful. The savings can be dramatic, but it only works if your startup is ready to face the additional overhead and management needs of an outsourced project. To avoid being another offshore nightmare story, just make sure that you have good management in place, and be ready to invest your energy into making it work.