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.
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.
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
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.
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
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
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
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.
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
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.
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
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.
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 allows access to expert and specialized
It relieves resource constraints to a minimum
It lets you balance in-house staff and
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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