Hey guys, i have a pilot of my startup and its goin great.
The next step will be developing much bigger site and system then what i have now.
As i dont want to recrew a tech-founder just for that purpose and to be able to afford it, i was thinking about outsourcing the development.
For that matter i have two qwestions for you guys:
1) Does outsoruced dev team in early stages harm future funding rounds for the startup ?
2)Which successful early oursourced booststrap startups do ou know ? and can you link up their story ?
1. Yes and No - it depends on what you're developing. If it is a cyber product or software, then investors would (usually) expect you to have in-house developers (meaning programmers which are part of the core team). If it's a website that offers services or an app, and you prove to them (through metrics/statistics) that you don't need an in-house programmer, it should be a problem.
2. I can't name any known companies at the tip of my hat, but I have advised hundreds of startups and many of them outsourced their development. If you need, I can connect you with a development company that selects 1-2 startups a year and does development + support for them free of charge, in exchange for equity/shares in the company. Your only costs would be the legal fees for the agreements.
I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david
Outsourcing development could go either way. The key to success with any development is having two components:
1) Developers who understand how to prove the business AND technical concept.
2) Having a development pattern/workflow that can help you transition the technology upon completion. This is the one I see most founders struggle with (see below for an solution).
While I'm sure there are success stories of bootstrapped companies who successfully outsourced initial development, I can't name any notable ones whose stories are easily accessible. In my own personal experience, my firm and I have been hired by several hedge funds and private equity firms over the years to build new products. The most recognizable is TopGolf, where they outsourced some of their game play data movement (a gameplay product). We've also built a whole bunch of software for manufacturing companies, pipeline firms, etc. The point: it's rarely ever the sexy stuff you hear about, but it is very successful.
The challenge of recruiting a tech cofounder or tech talent of any kind is a problem I repeatedly see amongst the founders I advise. New companies need all kinds of "basic" stuff setup before you can develop anything... email, domain names, hosting, Github accounts, credit card processors, an email list system, etc. This stuff sounds simple, but it's not. Wonder why your email isn't going out to the person who just signed up? Did you check your DKIM settings, DMARC records, and DNSSEC? Those are all things the "sideline" or "affordable junior level" developer tends to ignore. The point: It's never as simple as just building an app or POC/MVP (that's the fun part).
Because this is such a common point of failure, I launched a service to do all the setup (see https://butlerlogic.com/startup). We don't build POC's, MVP's, apps, or any of the fun stuff.... we build the predictable/reliable foundation that developers need (but hate to make). It gives non-tech founders an advantage in attracting the right talent (who can focus on the fun part). Bottom line, you can recruit tech folks or firms who are passionate about your BUSINESS IDEA. We built our own workflow, based on decades of experience doing this. We've kept costs reasonable this way, while delivering world class tech foundations (we're kind of known for this... by 2.5M developers). We provide a free 15 minute call here on Clarity for anyone interested in how this works and whether it's right for their startup.
It is better to work with an outsourcing company in the MVP and early stages to build the product than finding a tech co-founder. There are several reasons:
1. it is very hard to find a reliable tech founder.
2. you will have to convince the person about your idea and also give away liquidity.
3. Even if you find, it doesn't mean that tech co-founder will be able to do everything, you still might have to hire some developers to do tech work.
I would suggest to go with outsourcing now. I have written a detailed blog here, you can check more details: