6 Famous Tech Startups that Outsourced Development

Big name companies have utilized outsourced development for years to grow their businesses, beginning from their early days as a startup. It’s no guess as to why outsourcing has worked for so many startups. Outsourcing expertise for miscellaneous tasks can easily increase your startup’s efficiency by allotting your in-house team precious extra hours to devote to tasks that require their attention for the growth of their company. Enlisting professional expertise for a reasonable fee on jobs that don’t require in-house effort can be the difference between a failed or successful startup.

The list below is a compilation of big name tech companies that began as startups and utilized outsourced development, strategically.

AppSumo

A website for distributing daily deals on web apps, digital tools, and online services.

Company Launch: Launched in 2010 by founder Noah Kagan.

Outsourced Tasks: A developer was hired to build their Paypal button at a rate of $50 USD.

Current Success: Now valued at $2 million, the company also has one of the longest lists of email subscribers on the web reaching approximately 700,000 subscribers.

Slack

A cloud-based internal team collaboration tool available as a web and mobile app.

Company Launch: Launched in 2013 by founders Stewart Butterfield, Eric Costello, Cal Henderson, and Serguei Mourachov.

Outsourced Tasks: In the early days, the company hired a design firm to help turn their early prototype into a polished product by creating Slack’s logo, web and mobile apps, and marketing site in about six weeks.

Current Success: The company is valued at $3 billion and has more than one million daily users.

“I outsourced myself and stayed with my team (sleeping on one of the developers couch) for more than three months. I came back with a working prototype that let me fill out the rest of my founding team here and then raise money. Some other side benefits are it was much cheaper to live over there on a daily basis than it was here. This extended the amount of time I could bootstrap the company. It also let me focus entirely on what I was building since there was a lot fewer distractions.”
- Joe Fernandez, Klout

Skype

The web and mobile app that provides users with video chat and voice calling services.

Company Launch: Founded by Pritt Kasesalu and Jaan Tallinn in 2003.

Outsourced Tasks: They used a team of developers in Estonia to help them build out their business. It’s not uncommon for a company to have an excellent idea but lack the professionals to execute it, especially in the early days of the business. Skype identified this lacking and worked closely with an Estonian development team to grow their business.

Current Success: Sold to Microsoft in 2011 for $8.5 billion.

Whatsapp

A cross-platform encrypted instant messaging client for smartphones. The platform uses the Internet to make voice calls, video calls, send text messages, documents, and more.

Company Launch: Founded by Jan Koun and Brian Acton in 2009.

Outsourced Tasks: Practically all of Whatsapp’s development was carried to Eastern European developers with Whatsapp’s internal team stating “they are the best developers in the world.”

Current Success: Facebook purchased the tech company for $19 billion.

The Squawker team is a prime example of how to work on a development project. Their core team had between them many decades of trading and financial technology experience, so they were perfectly capable of steering the project while bringing in external partners to build an integrated implementation team.”
- Dimitry Stillermann, Squawker

Basecamp

A web-based project management tool with features like to-do lists, forum-like messaging, file sharing, time tracking and more.

Company Launch: Founded by Jason Fried, Carlos Segura, Ernest Kim in 2004.

Outsourced Tasks: Basecamp has outsourced many of their business’ areas from the very beginning. After all, it’s why their tool was developed — to help remote teams work closely together.

Current Success: Basecamp has over 15 million users with an estimated valuation of $100 billion.

Github

An online Git repository hosting service offering all of the distributed version control and source code management (SCM) functionality of Git, as well as adding extra features of its own.

Company Launch: Founded by Tom Preston-Werner, Chris Wanstrath, and PJ Hyett in 1999.

Outsourced Tasks: In the beginning, the founders outsourced the expertise of a coder, for consultation purposes and ultimately that same coder ended up coding the backend of Gist, a sharing feature on Github.

Current Success: The current valuation of Github is $2 billion USD. In 2016, GitHub was ranked #14 on the Forbes Cloud 100 list.

As you can see, outsourcing has long been used as an aid for startups to grow their businesses. With the increasing popularity of outsourcing, comes the increasing popularity to offshore development, specifically to regions such as Latin America.

The LATAM area may be affected by political instability and other barriers, but that hasn’t stopped the growth of their outsourcing industry, which is said to double in global spending in 2017. This is a significant rise from the 2013 estimation, when it reportedly made up just 5.3% of global expenditure. Come 2017, the Latin American outsourcing industry is said to total 10% of global expenditure and it will continue to grow from there. Latin America is thus positioned as a hugely promising market for startups looking to get in on the ground floor of a fertile outsourcing industry with which they can grow their business.


For companies in search of an outsourced development team, consult with us at Gigvy to check out our network of some of the top app development talent in Latin America.

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