Offshoring software development for your startup - how to do it, how to do it well? A workshop led by Andy Brandt and David Butler on the StartupCamp Switzerland in Basel in February 2014.

1. A SHORT OVERVIEW OF
STARTUP
OFFSHORING
DAVID BUTLER, ANDY BRANDT
STARTUP CAMP 2014 BASEL
2014-02-08

2. POINTS WE’LL COVER
AKA AGENDA
WHY TO NOT OFFSHORE/OUTSOURCE?
It may look like a strange way of opening a talk about
offshoring/outsourcing, but we feel it is a good idea
to understand what tradeoffs are you making before
you take the plunge.
CONTRACTING OPTIONS
We are not lawyers and this is not legal advice ,
but:
 go for T&M or fixed?
 or maybe some other option?
Plus it is a good idea to have realistic expectations as
to how much security a contract gives you.
STARTUP CAMP 2014 BASEL
2014-02-08
CHOOSING WHOM TO WORK WITH
Lots of options and choices to make:
 where to go & why?
 build a team or outsource project?
 what due diligence to do?
HOW TO WORK WITH YOUR THEM?
Once you have your team/developers you have to
work with them.
What methods to use, what tools can help etc.
PRICING
You want to pay a fair market price – you don’t want
to end up ripped-off – but probably you also don’t
want to exploit others. How to find then the right
price?
CLOSING/TRANSITIONING
If you expect your startup to be really successful and
take off like a rocket there will be a moment when
you will want to have your own team – how to
transition/close?

3. WHY TO NOT
OFFSHORE?
 UNDERSTANDING TRADEOFFS:




TEAM ENGAGEMENT -> CODE QUALITY, INVESTMENT IN THE CODE, CREATIVITY
ABILITY TO CHECK WORK, MOTIVATION ETC. OF YOUR TEAM
THEIR CONTRIBUTIONS TO THE PRODUCT & COMPANY
COST
 OPTIONS YOU HAVE (IN ORDER OF “GOODNESS”):




TEAM WITH YOU HERE – BEST IF YOU CAN AFFORD IT
YOUR OWN TEAM OFF-SHORE – SECOND BEST OPTION, BUT BUILDING IT CAN BE A CHALLENGE
SOMEONE’S TEAM (HIRE A COMPANY) – CAN BE OK, BUT IT WOULD BE “JUST A PROJECT” FOR THEM ALWAYS
A BUNCH OF FREELANCERS OFF ODESK ETC. – NOT RECOMMENDED UNLESS YOU ARE A DEVELOPER YOURSELF!

4. CHOOSING WHOM TO
WORK WITH
 ASSUMING YOU WANT A READY TEAM – HOW DO YOU FIND IT?
 LOCATION – CEE? EU? FAR EAST? ELSEWHERE?



TIME ZONE DIFFERENCE, TRAVEL TIME – CEE IS BETTER THAN ASIA, SAME TIME ZONE, CHEAP TO VISIT
LANGUAGE – ENGLISH, SOME MAY SPEAK GERMAN, DON’T EXPECT ANY OTHER LANGUAGES
CULTURE – ESP. WORK ETHIC, ATTITUDE TOWARDS AUTHORITY, QUALITY, PUNCTUALITY ETC.
 CHECK THE REFERENCES!
 GOOD GEEKS
ARE VISIBLE IN THEIR COMMUNITY
–
THEY SHOULD BE VISIBLE IN THE COMMUNITY FOR THEIR
TECHNOLOGY OF CHOICE
 IT IS BETTER TO VISIT THEM, BUT DON’T OVERESTIMATE THAT!
 …BUT EVEN BETTER TO TRY THEM OUT – RUN A SPRINT OR TWO WITH THEM.

5. PRICING
 UNDERSTANDING LOCAL PRICE POINTS


WAGES ETC. ESPECIALLY FOR DEVELOPERS IN THE “ TARGET COUNTRY” – KNOW THEM!


Eg. Poland – an average developer will earn ~2500 CHF / month etc.
However, company cost of employing a developer is 2x the earnings due to taxes etc.
PRICES ETC. – HAVE AT LEAST SOME UNDERSTANDING OF THE LOCAL CONDITIONS
TAKE MULTIPLE OFFERS, BUT DON’T GO FOR THE LOWEST BIDDER (UNLESS YOU UNDERSTAND WHY THEY BID SO LOW)

 ASK QUESTIONS!

6. CONTRACTING
OPTIONS
 BASIC CONTRACTING OPTIONS YOU CAN HAVE:




T&M – PER TEAM OR PER PERSON, PER DAY, MONTH OR SPRINT
FIXED BIDS – “WE’LL DO A PROJECT TO THIS SPEC WITHIN THIS TIME” – AVOID THIS! HTTP://GOO.GL/FXVCXI
OTHER MODELS LIKE THE “CHANGES FOR FREE” CONTRACT
RELATIONSHIP BETWEEN CONTRACTS AND METHODS USED
 UNDERSTAND WHAT THE CONTRACT YOU HAVE REALLY GIVES YOU
 WHAT IS YOUR RISK COMPARED TO THEIR RISK? (YOU RISK YOUR BUSINESS OPPORTUNITY, THEY JUST SOME OF THEIR FEES)
 HOW ENFORCEABLE THE CONTRACT REALLY IS? (IN CEE THE FURTHER EAST THE LEAST PROTECTION A CONTRACT WILL GIVE
YOU)
 OF COURSE – ASK A LAWYER!
 (BUT BE PREPARED FOR UNSATISFACTORY ANSWERS, AS LAWYERS SOMETIMES AVOID CLEAR-CUT ANSWERS TO
PROTECT THEMSELVES)

7. HOW TO WORK WITH
YOUR TEAM?
 SELL THEM THE PRODUCT!
 YOU WANT THEIR ENGAGEMENT BEYOND JUST COLD PROFESSIONALISM NO MATTER WHAT IS THE LEGAL SETUP
 IF YOU CAN’T GET THE DEVELOPERS EXCITED HOW YOU HOPE TO GET YOUR CLIENTS EXCITED?
 METHODOLOGIES MATTER
 USE AGILE – AND MAKE SURE IT IS NOT “PRETEND AGILE”
 MAKE SURE THEY USE MODERN PRACTICES/METHODS NOT ONLY IN PROJECT MANAGEMENT
 NEVER FALL FOR THE ILLUSION THEY WILL DELIVER WHAT YOU NEEDED BASED ON A SINGLE SPEC DOCUMENT!!!
 BE IN TOUCH, LOOK AT WHAT THEY DO




CHECK THE TEST SERVER, THE BOARD, TALK TO THEM DAILY
IF YOU CAN’T APPOINT A PM/PO IN YOUR OFFICE HERE
VISIT AS OFTEN AS FEASIBLE
LOOK AT THE CODE – IF THEY ARE RELUCTANT TO GIVE YOU ACCESS TO YOUR CODE FROM DAY ONE: RUN!
 LOTS OF TOOLS TO HELP YOU!

8. CLOSING TRANSITIONING
 CONSIDER THIS BEFOREHAND – AGAIN, THIS IS PART OF THE TRADEOFF YOU MAKE BY OFFSHORING
 OPTIONS:




TRANSITION THE WORK, LEAVE THE TEAM (ESSENTIALLY THE ONLY OPTION IF WORKING WITH A COMPANY)
TRANSITION KEY TEAM MEMBERS
KEEP THE TEAM
OTHER?

9. PROFILES
Andy Brandt
Andy is an experienced manager, team builder and
entrepreneur.
His experience includes e-business, e-commerce,
mobile solutions, telco (ISP, cellular operators),
software development and Internet systems &
services. He is also a Scrum.org’s Professional Scrum
Trainer.
David Butler
David Butler is a serial networker and social media
aficionado. Both David’s strong social presence and
his love of testing beta versions of new products
coming from Zurich’s many startups, have made him
a sought after advisor in many industries.
Fully engaged in the Swiss Startup Scene, promoting
it’s innovation with events, networking, social media,
and connecting the dots.
Between 2007 and 2010 Andy’s company – Code
Sprinters – was providing software development
servicescatering primarily for startups.
4 years experience working in a startup with a
remote team
HTTP://ABOUT.ME/ANDY.BRANDT
HTTP://WWW.SOCIALAXLE.COM/

10. THANK YOU!
AND GOOD LUCK