utsourcing companies used to write articles on how a typical customer should behave when working with a remote team. But what about the other side of the coin?
Here, we at Gera-IT together with Startup Navigator will disclose how a vendor should behave in today’s highly competitive market.
The startup industry is booming. Ease of access to venture capital is encouraging budding entrepreneurs to quit their day jobs and bring their own dreams to life. But are the VCs ready to invest in mere ideas? Not really. Before they put any money on the table, they want to see something that at least works.
This is the niche where most outsourcing companies compete and face the greatest challenges. On one hand, they all want to bring cool, innovative ideas to life. But, on the other, they want to charge as much as they can to build a complete solution. They hope your flow of ideas goes on indefinitely so they can make money off you until the end of time.
However, with this approach an outsourcing company can only expect to work with well-funded or growth stage startups.
Working with Startups at the Idea Stage
All right, so what should those of us who work in the outsourcing sector do with fledgling companies that are self-funded with very small budgets? In 2018, this is easier than ever before.
Here are a few ideas:
1. Take shares in the startup as part of the payment.
2. Create an ICO campaign with just 1 landing page.
3. Help the customer to find an investor so they can raise funds.
4. Educate customers on how to be lean and efficient.
With the understanding that points 1 to 3 are more or less clear, let’s examine the 4th point. Of course, if a vendor implements points 1 to 3, he will definitely encourage the customer to be more efficient. In this scenario, the contractor is sharing the risks and is more motivated to see the customer succeed.
Converting Customers to Lean Customers
Minimum Viable Product
Everyone is talking MVP nowadays. The truth is that most startups are so wrapped up in their “big idea” that fewer than 1% of them can see the project in the same way that an outsider would. If you really want to understand which features to exclude or include – ask your developers. The guys that write the code. Not the marketers. Not managers.
Do you need to have a user get authorization via Google/Facebook if your goal is to raise funds from an investor?
Excluding the Google/FB OAuth feature will save you at least $500 in development costs.
Frameworks. There are so many of them. Which one to choose?
Simple answer – the higher the level, the better.
Say you need an e-commerce shop. Start off with Shopify to get your shop up and running in just a few hours. Shopify is built with Ruby on Rails (RoR). So now, if you need to customize your shop, use RoR – the lower-level framework. RoR, in turn, is built with the Ruby language - so if there is a critical need for a few features that can’t be built with RoR – go down to this level.
Remember, if an outsourcing company doesn’t go deeply into your project and offers to build it in Java, C#, or some other low-level scripting language, they are most likely used to working with large companies and are playing for the long-run.
Here are the high-level frameworks most widely used by startups:
- Ruby on Rails (used by Twitter, GitHub, Groupon).
- Django (used by Instagram, Pinterest, EventBrite).
- Node.js (used by Yahoo, Microsoft, LinkedIn).
An outsourcing partner dedicated to a positive result should do much more than just deliver good code and advice on how to improve efficiency. Why not try being a business partner to your customer?
Just a few ideas:
- Meet the customer’s clients together.
- Act as a CTO. Meet investors together. Pitch together.
- Help to find and bring in other vendors who can cover other areas of expertise.
- Constantly contribute ideas on how to add / reduce the number of features.
- Encourage connections between your new and existing clients.
But what’s in it for me?
And what’s the benefit of all these efforts? How does the outsourcing company benefit from a lower profit margin? Why should they take all these risks?
As Warren Buffet says: “I don’t believe in fast deals.”
If a vendor invests his time and money into his client’s project, he significantly raises the chances the project will succeed. And success will benefit both parties.
The average length of time it takes for a startup to determine if their business model will succeed is about 2 years. The 2 years of engagement is much better than a few months of high profits.
Think about it.
Written by Gera-IT – the Startup Experts Team.