Outsourcing Is Great, Outsourcing Is Terrible.

I’ve seen teams succeed and fail at outsourcing. A key component to success has always been avoiding outsourcing what should never have been outsourced in the first place.

Hiring full-time engineers has traditionally been the best way to build software, but it isn’t always an option. Some work doesn’t require a full-timer and some projects can’t afford one.

Some work should never be outsourced. For example, architecting the backend of a financial system. Work activities are likely to include handling sensitive data (so it should be handled in-house) and strategic decisions will be made that are likely to have long-term consequences (so it should be handled by someone incentivized to make the best long-term decisions).

When evaluating what should and shouldn’t be outsourced, separate dimensions of time and location:

Time: Full-time vs. Part-time
Location: Onsite vs. Remote

Full-time, Onsite work is most traditional. It’s how companies operated for most of corporate history as we know it. This is not outsourcing.

Full-time, Remote is becoming more common. GitLab, InVision, and Wordpress are all Billion dollar all-remote companies. Hiring remote full-timers for less than a year should be considered outsourcing.

Part-time, Onsite has been around for a while. If you’re hiring someone Part-time, even if they’re Onsite, it’s outsourcing, since the person is not around as much and likely to bill you by the hour or project.

Part-time, Remote is skyrocketing in popularity due to systems like UpWork, TopTal, Gigster, and Turtle. These are all forms of outsourcing.

When to avoid outsourcing:

When money doesn’t matter and you can access talent near you. If you’re in SF and can compete with Facebook and Google on salary, benefits, and perks, go ahead and hire great engineers near you. $250K/yr/head is a good starter figure to budget with.

When handling high-security data. You don’t want to send sensitive data to strangers, so why have talent who may not be around tomorrow handle it? If you must outsource development around software systems with sensitive data, use sandboxes and dummy data.

When making long-term decisions. Architecture and major backend decisions are likely to have long-term consequences. It’s important to make the right long-term decisions, so the people making them should be full-timers who are incentivized to benefit from those decisions in the long-term.

When Co-founding. It’s a bad idea to pay someone to co-found a company with you, especially if you aren’t yet able to pay yourself a competitive salary. Co-founders should all be as committed as possible and incentivized properly for the long-haul.

When it’s your secret sauce or the absolute core of your idea. Similar to the above point with co-founders, outsourcing your core idea is a bad idea. You should be working on products and companies that you’re an expert on, so you shouldn’t have to to outsource the core idea, or the secret sauce, if you’re the expert.

When is outsourcing ok?

When the work can be compartmentalized. Front-end and mobile development is typically easiest to compartmentalize, especially when a team can handle design and back-end development in-house.

When you can lead and evaluate performance on whatever you’re outsourcing. If your in-house backend lead can architect and lead backend development full-time, they may benefit from having other engineers help them execute against strategy. Strategy itself should not be outsourced, but execution against that strategy often can be outsourced.

When it doesn’t require full-time budget or effort. If your full-time team has already spent numerous cycles building a great web and Android app, is it really necessary that the first iOS app is built by a full-timer? Much of the strategy is already thought out, and the nuances of going to a new platform are likely to be handled in design, not engineering.

At Turtle, we’ve found React, React Native, iOS, and Android development to be most outsource friendly, so we built a platform for startups and part-time, remote engineers to work together. Turtle handles vetting, matching, and provides an app (chat, tasks, meetings, and payments) to work together. Not everything should be outsourced, but not everything should require an in-house, full-timer. The most effective teams learn to do both well.