Leveraging Outsourced Developers

Outsourcing is a solid strategy that can boost your business, but we believe information is better digested when you accompany it with real examples. So let’s take a look at some top companies in the world who leveraged outsourced/remote development and are today worth millions of dollars.

Alibaba.com

For many, Alibaba.com is China’s eBay but few know that it started as a small “Internet Company” called China Yellow Pages. Today Alibaba is the world’s biggest global marketplace, one that in 2014 when it went public, was able to score the biggest IPO of the year and is still one of the most valuable IPO to date.

But what does outsourcing have to do with? Well, according to the book “Alibaba: The inside Story behind Jack Ma and the Creation of the World’s Biggest Online Marketplace”, in its early days, the founder Jack Ma outsourced the website development to a U.S. firm. At the time, development talent in China was in short supply, while developers in the U.S. had the skills Alibaba was looking for and needed. That’s just one reason, though. The other being Ma had to find workarounds and viable ways to grow his company overcoming all Chinese internet restrictions. Currently, the company still relies on outsourcing partners for production, but they’re mainly located in China.

AppSumo

If you’re just a bit interested in marketing, you already know the name I’m about to drop here: Noah Kagan, a serial entrepreneur, worked for Facebook, Mint.com, and founder of AppSumo. Launched in 2010, AppSumo is a website that shares and distributes daily deals to its subscribers, mostly tech-focused or software-related. Discounted prices on high-priced software, lifetime access to yearly online courses, and so on. This company is now valued at $2 million, with an impressive mailing list accounting for 700K subscribers.

In an entertaining blog post from a while ago, Noah personally explains how he saw a niche for the business he had started to work on and needed to validate his MVP. That’s why he hired a remote developer to code him PayPal integration to start collecting payment through his new website. The overall cost was $50. He started then by selling subscriptions to Imgur PRO, an image sharing website and image host, and then added to a broader list of paid web apps, software, and courses too. These days, AppSumo still relies on outsourcing for many of its areas and projects.

Google

As one of the top companies that prides itself on taking care of their in-house culture and employees, it might be surprising to see Google listed here. Well, it’s because the tech giant headquartered in Mountain View, California, has been taking advantage of outsourced staff for years. Whether it was a matter of IT specialists, developers, as well as virtual assistant types of work, Google is a strong implementer of outsourced work to take care of the many projects they continuously deploy and work on.

One area that made it on the news, and that many might not know about, is when they decided to outsource phone and email support for AdWords to around 1000 reps. AdWords is one of their top-grossing products, so they wanted to have the biggest ROI possible out of it.

MySQL

With its first release 21 years ago, MySQL proved to the world it was something we needed when it comes to working and managing databases. Part of its success is due to two key elements: the release of its source code under the GNU General Public License and the smart outsourcing strategy implemented by the management right from the beginning.

The company saw its growth strategy would need to include mostly outsourced developers and staff all over the world to boost operations in each location. Today, MySQL runs on millions of servers, and it’s used by many of the world’s largest and fastest-growing organizations such as Amazon, PayPal, Nasa, Cisco, just to name a few.

Opera

Opera is a modern and light web-browser born as a research project inside Telenor, the largest Norwegian telecommunications company. It’s first public release dates back to 1995 when the project branched out into a separate company, named Opera Software ASA (bought by Oracle afterwards).

As with many other startups, with uncertainty breathing down their neck, it was a matter of launching the product without squandering all the money the company had at that time. That’s why they opted to outsource part of the development to developers in more than 25 locations around the world to create and implement their platform.

Skype

Skype was one of the most disruptive tools and technologies during the early 2000s. The idea of Niklas Zennström and the Dane Janus Friis wouldn’t have been part of our lives if they hadn’t outsourced the back-end development of the app to three Estonian developers named Jaan Tallinn, Ahti Heinla, and Priit Kasesalu.

To be fair, they all had already been working together in previous years on another product with similar peer-to-peer technology for sharing music called Kazaa.

The important thing here to stress is that thanks to outsourced developers, who later became partners, Skype was able not only to enter the market but also to become a widespread tool among businesses of all sizes. Since 2011, Skype has been a part of Microsoft who bought it for $8.5 billion.

Slack

If you work with remote peers, there’s a high chance you use Slack, an online collaboration tool app for teams based on Instant Messaging. Launched in 2013 by four founders: Stewart Butterfield, Eric Costello, Cal Henderson, and Serguei Mourachov, this “gem” perfectly embodies the startup approach to launching a new product. Before opening it up to the first beta testers, Slack’s development was outsourced to a design firm, who took care of the app, website, and even their logo.

After that phase, once the product was good enough for the founders, they started to invite other users and teams to test it out and provide feedback (8K users signed up the first day). Today Slack accounts for 5 million daily users.

Whatsapp

Founded by two former Yahoo! employees, Brian Acton and Jan Koum, Whatsapp is today’s take on SMS: encrypted communication, group messages, file sharing and, recently, even calls. This startup who launched in 2009, and eventually got acquired by Facebook in 2013 for $19.3+ billion, has never denied taking advantage of outsourced developers.

Actually, based on publicly available info, we know the core development was outsourced in Russia, starting with a contractor iPhone developer named Igor Solomennikov who joined the company eventually as CIO.

Wrapping up

What’s the moral here? All these stories should have shown you how leveraging outsourcing can truly have a positive impact on your business. Specifically, outsourcing part of your client work, or even part of your product development, can benefit you because:

  • It’s budget-friendly
  • It’s time-efficient
  • It allows access to expert and specialized service providers
  • It relieves resource constraints to a minimum
  • It lets you balance in-house staff and overhead expenses

Ultimately, outsourcing resolves into a specific approach to running a business. It’s an approach that’s deeply effective and efficient and can have a profound impact on your business’s growth.

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