How NOT to Outsource Your Startup’s Product Development
“How do you feel about having engineers abroad?” This question seems to come up more and more often at investor meetups I go to in Silicon Valley. Investors usually don’t like it. But finding good engineering talent in the Valley is hard. Being able to pay them a competitive salary is even harder. That’s why many startups hire developers through Upwork or work with outsourcing companies around the world.
WeTravel’s engineers are mostly in Azerbaijan. However, we are in a unique situation. Our CTO, Garib Mehdiyev, is originally from Azerbaijan, where he had a very successful career in tech before he emigrated and became a US citizen.
Our engineers and Garib have been working together for decades. They started coding together as teenagers. Garib has known our engineers forever, which is why they’re not only talented but also extremely loyal and hardworking.
Retention of engineers is a huge issue in Silicon Valley, one that we don’t have to worry about for now. That’s because we don’t consider our engineers to be contractors, but an integral part of the company. We have established clear lines of communications and regular online meetings. We also make sure that they are included in the discussion whenever we have important updates and successes that we share with the entire team.
Having engineers in Azerbaijan has allowed us to build an amazing product while keeping a healthy runway. Employing just half the number of engineers in Silicon Valley would double our burn rate.
Problems That Surface When You Outsource Your Startup Engineering
However, there are complications. Having two teams with a 12-hour time zone difference has its challenges. The agility of product development suffers because the feedback loop between the product, customer support, and engineering teams is much longer than if everyone were in the same office. It’s also hard to keep mission alignment and to ensure that the satellite office remains highly motivated.
Being a travel company, we mitigate these issues with a company retreat every year. This year, it was held in Bali. The effects were astonishing. Not only did we make a huge leap forward in terms of product, but questions around vision and necessary next steps all but disappeared after the retreat.
In addition, we’ve started the process to bring our own talented engineers from Azerbaijan to the US in the coming years. For the engineers abroad, this is encouraging. It shows them that WeTravel offers great career development opportunities and it proves that we truly value them.
How to Outsource Your Startup Engineering the Right Way
If you’re thinking that you want to outsource your startup engineering, here’s my advice: You might be able to outsource the development of a basic beta product as proof of concept. But if you want to build a scalable tech product abroad, you can’t just go to Upwork or hire an outsourcing company. Keep these three things in mind to get it right.
1. Know the culture you are outsourcing to
Make sure you think carefully about the country you outsource your startup engineering to because price should not be the first consideration. My professional background visiting war prisoners for the Red Cross in Uzbekistan has been of limited use in my career as a tech entrepreneur. But the one thing it has done for me is that I understand Central Asian culture better than the average Westerner. This enables me to have a great working relationship with our colleagues in Azerbaijan. You have to do the same when selecting the country you will hire in. Make sure you understand the culture. Communication is hard enough with the physical distance. You have to minimize communication issues due to cultural misunderstandings.
2. Hire each employee individually
Don’t take any shortcuts and outsource your hiring. You need to make sure that you interview and screen each engineer. Outsourcing companies tend to give you good people at first who quickly switch to other projects. Whether you have a trusted local manager that can assist with the hiring, or you do the hiring yourself, you need to make sure you apply the same rigorous hiring practices for each prospective employee.
3. Treat everyone like part of the team
From the start, you have to establish deep ties with your engineers and make sure they feel that they are valued members of your team. You will need to have regular check-ins at times that work for everyone. Make sure to include them in general company updates and establish “all hands on deck” communication channels. Otherwise, you will never achieve the alignment of vision and culture necessary to build a great product.
You can’t look at development as a one-time investment with a fixed price tag. You also can’t treat your engineers abroad as disposable resources. You have to select them with care and treat them with respect to earn their trust. Otherwise, you set your company up for failure before you even get started.
Originally published at www.wetravel.com on December 3, 2016.