How do we stay lean while outsourcing the development?

Ideal readers: bootstrapped tech startup cofounders who rationally think learning to code is not an option.

We outsource the development to one front-end developer and one back-end developer in Kolkata, India. I’ve encountered quite a few people asking questions with regard to outsourcing, such as finding the right team, controlling the budget, making sure milestones are achieved in time, etc. But mostly, people are worried about outsourcing the development will jeopardize the efficiency of the team and prohibit them from iterating quickly based on users’ feedback. This is also why most prominent startup incubators require a hacker in the team clearly.

These are all valid worries. It is ideal if a tech startup cofounder can code. But I think that it helps if I share frankly how we try our best to avoid the downside of outsourcing and take advantage of the upside. After all, lacking development skills is the situation many people are faced with, people who are good at one thing or many things but coding. To these people, it’s clear that coding is not the goal, but a smart method to communicate their goals in whatever fields. If someone gives up starting a business simply because a tech cofounder is yet absent, it just means that person doesn’t love the business enough.

To start with, I’m going to talk briefly about what we do and who we are. Our startup Aktively is an online marketplace that helps DIY hobbyists and beginner makers to quickly pick up skills and techniques with experts in their area, by allowing them to meet and make offline, in person.

My cofounder and I are so far by no means the ideal cofounders of a tech startup, since neither of us is the developer nor the designer. We aren’t crowned with the MBA degree either. But to give each of us some credit: I am a very quick learner, and I am an amateur designer; Lu is superbly good at understanding and recruiting talents; we are both very persistent. We have a deep understanding of the field we are cultivating. We’ve been working on our startup for 9 months, and we haven’t gone to the hell yet.

Admittedly, outsourcing is easily painful. It’s intimidating because:

1. You have to know as much as possible about the direction of your business before even initiating the conversation with a team.
2. If you outsource, you can’t really expect developers to be deeply engaged with your business on a personal level. You can’t complain as long as they don’t mess up with the spec and finish the job on time, leaving you wondering if you are blind to many issues.
3. It’s like you have to manage people from day 1. Managing people is far more difficult than drawing mock ups or writing Ruby on Rails.

Based upon my own experience, I think the experience of relying on someone else to build your house is only comfortable when

1. You won’t regret the current business direction in the foreseeable future. You know there are already people itching for the app to be functional.
2. You are smart enough to get armed with basic know-hows to work with developers keenly. You should be able to choose the right technology stack, be aware of tools and APIs that will save a ton of development time, at least dare talking about the algorithm, etc.
3. You give your development partners something more than the amount of the payment written in the contract.

No.1 is most challenging. We‘ve been working on Aktively for 9 months. The first 7 months are spent coming to the point knowing there are users for Aktively.

To us, the key to stay lean lies in the stage before we started working with the offshore team.

We saved our fellowship and borrowed tiny amount of money from families and friends in order to work on Aktively full time, so we can’t afford trying a number of products with development shops. If you have more money, you’ll probably be able to do it more quickly than us.

First, we went out of the building to talk with potential users from the very first minute. It’s nice we don’t know how to code, because we don’t even have to spend time building an MVP first. We went to at least 15 flea markets to talk with hundreds of craftsmen, asking them whether they are willing to host workshops that teach people how to do what they are good at. We collected hundreds of business cards. We went to their websites, noting down names of people who have already started hosting workshops on their own. So at least we knew that both sides of the market exist: people who teach and people who learn. We knew the painpoints: people who teach don’t know where to find more participants to their workshops; people who learn find the workshops in schools or art centers are usually rare and expensive. We knew there are already startups working with these schools and art centers directly to help them broadcast their course catalogues.

Second, we spent a weekend using Wix Ecommerce Plan to build the MVP of Aktively. Yes, an MVP without an independent back end database sounds very suspicious, but USERS DON’T CARE. With the permission of twenty or so craftsmen we talked with in those flea markets, we were able to put about 40 workshops on Aktively. It wasn’t bad. There were workshops teaching people how to design and make the gemstone bracelet, how to make a coffee table from scratch, how to make a terrarium, how to make chocolcate… It was then the Thanksgiving weekend. You American kids probably don’t feel it that way, but Thanksgiving is literally the hardest time for international students and young professionals, because there aren’t families to celebrate with or turkeys to stuff with whatever stuffings. We buy beers and chips. We go to karaokes. That’s it. So we put on a special campaign to connect American families with “orphans,” about how to prepare the Thanksgiving dinner. It went awesome. We received thank you letters. It didn’t generate much buzz, but we knew by nature people love to be connected offline, in person.

We use the Wix-version-Aktively for half a year. During this period of time, we manage to assemble a loose team of four, three of whom are quite stable, the developer is always an easy-come-easy-go. Can’t complain. But in the meantime, we expanded our mailing list to a few hundred solid subscribers. We actually sold a number of workshops. We filled a notebook completely with early adopters’ feedback. We walked 80% of streets in Brooklyn. We did a couple of high quality interviews with established makers and artisans. We had a few phone calls with our great mentor. We got the attention of a prominent accelerator in Amsterdam. We won the top award of a big startup competition in China. What’s more important, we find a better business model and a better way to pitch in front of users.

In July, we’re finally ready to outsource. We become ascertain that there are users and the value we delivered is well testified. We know we aren’t throwing the money just because we are obsessed with the idea. After all these months managing to roll out features, copies and designs on Wix, we decided to shut it down temporarily. It’s like a farewell to an old car that has accompanied me to drive to the vast unknown wild land.

Believe me, the rest of it is relatively easy. We found a nice duo on Elance after rounds of conversations with multiple shops. We plan the modules together. My jobs right now are to deliver the PSD file on time and write reviews on time. Of course, there are deadlines missed and skype conversation cut off. But mostly, it’s just human being… You know. Be nice. Be trustworthy. Give hopes. Share dreams.

To summarize, there are essential points to keep in mind in order to stay lean while outsourcing the development part of the startup business in my point of view:

1. Do all you can to test the idea before writing specs. All one’s can typically means to talk with human beings physically and to give the idea a basic online presence.
2. Learn technology to a level that you understand all drawbacks and perks.
3. Treat the outsourced developer as your CTO.

We are onto the last module starting next Monday. It’s so exciting. I don’t think riding roller coaster is a perfect way of describing startup life, because it sounds passive. I think hiking is better. I have the right to stop anytime, but I know I can make it farther.

BTW, cookies gained by outsourcing the development to an offshore team in Asia: I’m forced to keep a healthy life cycle. I need to get up early. Run in the evening. Debate with someone everyday.

I also acknowledge that this is only a fair blog if I talk about more corrections and iterations partnering with the offshore team along the way, before I find a tech cofounder/hire a CTO/sponsor H1B VISA for current developers. So I think I’ll continuously be open about Aktively’s progress. I hope I can receive many feedback.