Here is a quick tip you can use to help you weed out a lot of proposals.
A lot of outsourcing companies bid on a lot of projects at once. In order for them to do so, they frequently bid without reading the details of the project description. You can tell who these companies are by the generic copy in their proposals.
To weed out these companies, ask a very specific question in your project description that they would need to answer in their proposal. The question could be related to your project like:
Please let me know in your proposal, what platform you would recommend for this project?
Please let me know if your proposal, what design choice you would recommend and why.
Or if the project is fairly straight forward, you can ask an unrelated question like:
What is your favorite fruit, and why?
What kind of music do you like to listen to?
The answer is not important (although it can help you gauge their personality). You are more interested in seeing if they actually answered your question or not.
You may be surprised to find how many proposals do not answer these questions. If they can’t follow your instructions in their initial proposal, what kind of quality can you expect from them in your actual project?
So now, instead of having to choose from 20 different companies, you may only have to choose between 5 or 6.
Good luck with your project, and let me know if there are any questions on outsourcing that I can answer for you.
We are living in a society that is unprecedented throughout the ages, as far as making money is concerned. In the past, businesses catered to local markets within their town or neighborhood. As they made money, that could be reinvested into expanding into more locations across the city, or even to other cities.
Then the internet came along and changed everything. Now businesses could market themselves to the world from a single location. Businesses moved from physical products to digital ones that could be instantly downloaded from anywhere. No more worrying about inventories and shipping costs.
It took me a while to start my first internet business, since I had limited skills, and required the money to:
Create a website and associated tools
Design a logo and graphics
Help me market the website
Handle the customer service
And this was assuming I already have a product to sell. If not, I would have had to add the costs of developing the product to the mix.
If I was to hire someone local (in a western country) to handle all these duties, I could easily be looking at investing several thousands of dollars before I had my first sale. While this would still be cheaper than opening a conventional bricks and mortar store, I certainly didn’t have the funds or the skills to get into it right away.
Fast forward five years later. Through the power of outsourcing, I was able to find specialists in each of the above categories to help me out in all aspects of my business, for a fraction of the cost I would normally have had to pay.
Why is outsourcing so much cheaper?
Many specialists are located in developing countries, where their costs are much cheaper.
Many specialists work from home, and don’t have the overhead of an office and other employees to pay.
Since I only pay for a project at a time, I don’t pay the additional administrative costs of hiring someone full time.
Now of course, in life many argue that you get what you pay for. So if I was hiring someone for $10 an hour, would his work be of the same quality as someone charging $150 an hour?
In some cases it was. In other cases it wasn’t. Like anything in life, a little due diligence was required.
There are several highly skilled individuals in developing countries who have many years of experience taking on projects in various areas, and have become very good at them in the process. Where my project matched their skill set, I got a very good deal.
In other cases, their quality wasn’t be very good at all. Or they were using my project as an educational opportunity to expand their skill set.
In either case, I was able to spot which type of person I was dealing with beforehand, by communicating with them and looking at reviews from previous projects they had handled.
As I got good at outsourcing, I started expanding to other projects that I would never have dreamed of doing before, but now had the resources to create. If I had a tight deadline and wanted something of the top most quality, I would look for someone experienced. In other cases, I had pet projects that were flexible – so I was willing to hire people with less experience for less money. Some of them worked out, some didn’t. However I did become better at vetting, in the process.
As I got more confident in outsourcing, I was able to outsource more aspects of the business that I hadn’t thought of before. This allowed me to create very professional looking products, for much less than it would have cost to have done in traditional ways. As an example, each of the elements below was outsourced to a different person in a different part of the world:
Logo, theme and graphic design for my first website (Russia)
Coding and custom features for the website (Hong Kong)
Composing audio that was used as an intro in my podcast (Argentina)
Editing of a YouTube video (Taiwan)
Development of my first iPhone app (Ukraine)
Custom icons and UI design for other iPhone apps (Canada)
Audio editing with music and sound effects for other podcasts (Philippines)
Singing of a cover song on a YouTube video (USA)
I’ve developed relationships with several of the people above. One side benefit of having them across different parts of the world is that in some cases I could assign some tasks overnight, and have them ready for me when I woke up the next day!
So nowadays I am free to dream up new projects, that can quickly be assigned and developed for a fraction of a cost that competing companies would pay for having such employees on board full time.
What types of things would you be able to do or create for your own business, if you had your own team of highly skilled individuals waiting for your command?
Most of my business has been based around my own projects, that were outsourced to others. However from time to time, I’ve turned the tables and handled projects that others outsourced to me. Most turned out fine. However there were some that were total disasters. Those are people I don’t want to work with again. Are you guilty of making the mistakes below? If so, do NOT send your projects to me.
You think you know what you want, but you don’t. My job is to implement what you tell me to do. However I can’t do that if your specifications are vague or unclear. Be specific. Use mockups when it’s hard to explain in words. Use mockups even otherwise.
You don’t trust my input. I get it. You’re not a designer. You haven’t studied basic UI guidelines. I have the experience that you don’t. While it’s your project, I’ll chip in with my suggestions, when I think they will help you improve your product. If I create a great product for you, it helps my portfolio. If you ask me to implement your crappy design, then I know you’ll come back to me later with changes.
You don’t pay for changes. Changes are inevitable. I get that. Once you get a chance to play with the actual demo, you’ll probably want to make changes (especially when you don’t listen to my earlier input). However don’t get mad when I tack on extra charges for any extra work required on my part.
You don’t provide timely feedback. I did my part by completing the tasks assigned to me. Now you need to do your part by evaluating my work and see if it matches your vision. Don’t make me wait for this feedback, as I can’t continue with other parts until we resolve this part first.
You don’t respect my time. I have a secret for you. You’re not my only client. Lots of other people outsource their projects to me as well. I schedule time for your project, based on the original guidelines you give me. I also add on additional time to fix bugs and make changes, within reason. I already have another project lined up after this one. If this project cuts into that, I have to make accommodations, so you need to respect that.
You don’t pay on time. We create milestones fora reason. Once the work has been completed and we move on to the next task, please release any payments that are due. I don’t like asking you to do that.
At the end of the day, I would rather work on a smaller project with a client who provides clear, logical instructions and who will value me and my time, than deal with you on a massive project, that requires a lot of running around and back and forth. Heck, I may even charge less to work with you, if you fixed all the issues above. So do that first, then get back to me.
Outsourcing has been recently viewed as the cure-all for many business problems.
Costs too high? Eliminate some of your jobs, and outsource the rest.
Is there a skill that you need but don’t have? Don’t fret – outsource that aspect.
Is your job getting too time consuming? Not a problem – outsource it, so you can sit on a beach and drink margaritas all day.
Obviously things aren’t so simple. Before you start outsourcing your life away, I’d first take stock of a few areas.
What are you good at?
Obviously if there is something you are good at yourself, then it may not be something you need to outsource. Then again, just because you’re good at something doesn’t mean you want to always do it yourself. If it’s an area that you’re confident in, you can still benefit from outsourcing it out for a cheaper price. You can then use your skills to make sure the quality of the outsourcing is up to your standard.
What are you not good at, but need done?
Here is where you have to make the decision on whether you prefer having someone in-house versus having it outsourced. I would recommend someone in-house when:
There is a lot of explanation required, that would benefit from face to face interaction.
There is enough work available for a person to work full time on it, or have regular part time hours doing it.
It is an important enough job that you’re willing to pay more for someone locally to have it done.
I would recommend outsourcing it when:
The workload is inconsistent and is on a project by project basis, rather than regular hours.
Quality control can be maintained from afar.
You are comfortable using online tools for communication such as email, screen sharing tools, Skype and other chat clients.
You are able to transfer your vision into a document that your outsourcing counterpart would understand.
Other factors to consider:
Create your own set of rules for what you want your business to look like. For me, I wanted to be the face of the business and handle all customer service issues myself. So that was one part I didn’t outsource. Fortunately it was quite manageable. If it wasn’t, then I would have been forced to reconsider.
Make your own set of rules for what you want to do yourself, what you want your in house staff to handle and finally what you’re willing to outsource. Doing so will go a long way towards improving the efficiency of your organization.
You have a project you want to outsource. What is your budget for it? Should you get it done cheap? Or should you spend more to get it done properly the first time around? The answer is (drum roll, please)… it depends. First answer the following questions:
1. Do you already have an established brand presence?
If you already have a brand and an existing user base, then you have already set guidelines and expectations for the quality of your brand. Any new projects you release under the same brand need to maintain the same quality, or your brand image will suffer. You cannot afford any bugs or slip-ups that may arise from poor workmanship. Can the project maintain this same quality if done cheaply?
2. Do you have very clear and specific guidelines on what you are looking for?
The more clear and specific you are in your original proposal, the cheaper your project can be done for. If you’re not too sure what you’re looking for, or expect to make several changes, then prepare to add to the final budget.
3. Can you benefit from expert advice?
If you have all the design work done already, and are just looking for someone to put it together, then that can be done for a cheaper budget. If you are looking for someone creative to take your guidelines and turn it into something appealing, then it is worth paying for better talent.
I have two outsourcing partners that I’ve used in the past, and continue to use today. A low cost provider in Russia and a higher priced provider in Canada. Both can handle the same types of projects. I use the low cost provider, when I know exactly what I want – eg. I can provide the logos, color scheme or design I’m looking for and just need them to implement it. I use the higher cost provider when I’m not sure what the best approach for my needs would be and need advice. I provide him with the concept I’m looking for, and he sends me mockups that I can choose from.
4. Can you start with a simpler design, then build off that?
If your project is complicated, see if you can simplify it somewhat for the first version. Then use revenue from early initial sales to reinvest back into further improvement and additional features. I have used this approach for pretty much all my projects. The key here is to make sure that the initial version is fully functional, and doesn’t make any promises that it can’t keep. I.e. if you plan additional features, don’t mention them until they are functional.
Following the above guidelines should help you decide when it is worth investing more in a project, and when you can save money by getting it done cheaper. After you have made this decision, you can then decide which company you want to outsource to.
If you have any additional advice that has worked for you in the past, do let me know.
I’m working on a new project at the moment, that requires me to find a new developer to outsource to. Over the years, I’ve found several good people on outsourcing sites, from countries around the world, who I’ll return to when I have a project that matches their skill set. Every now and then however, I’ll expand into a new area that requires new people with new skills, so that requires posting the project online and soliciting bids from interested developers.
There seem to be a lot of great companies out there, who all have great experience, who all have great ratings and who all bid on your project at similar prices. So how do you pick which one to go with? Here are a few tips I’ve developed that have worked well for me.
Initiate a conversation: At the end of the day, no matter how good the person looks like on paper, I want to talk to them to get a real feel for them. This is the same approach I have used when interviewing people for a real job. Their resumes may look great on paper, but I still want to get them talking during the interview just to see what they sound like. I may ask a question about one of their previous projects, or ask what their approach to a solution would be. Their answers will tell me a few things:
Are they likable, approachable people? What kind of vibe do they give me? Trust your intuition – if you are getting a bad feeling, there may be an underlying reason.
What is their level of English like? Poor English doesn’t necessarily translate into poor quality – many of my best people over their years are not native English speakers. However I want to make sure it’s good enough to communicate with, that they understand me, and I understand them.
What is their response time? A good sign is when I ask a question and it gets responded to immediately, or fairly quickly. A bad sign is when it takes a day or two to get a response. If that is how long they take to respond during the “interview” process, then how long will they take when a deadline is approaching and I really need an answer from them?
What communication tools do they use? I personally use Google Talk myself for text conversations, since it’s less intrusive, and doesn’t require me to have other software programs running. I also use Skype for video and audio calls where necessary. If the other party wants to use Yahoo, MSN or some other protocol that I’m not using, then that would make working with him less attractive than another person who was using the same tools as me. I’ve also worked with people who don’t use any communication tools other than email. Figure out what approach works best for you.
What software platforms do they use? Depending on the nature of the project, you might prefer that the other party uses the same software tools that you’re familiar with. For example, if it’s a designer you’re working with, you might want him to send you the source images in a file your programmer can manipulate, or your local print shop can print from. I’ve worked with designers that used custom software, whose source files weren’t as useful to me as other ones. So this might be an area to confirj, if it applies to you.
What payment methods do they prefer? Initially, you may choose to use the escrow function that your freelance website uses. If your relationship moves beyond the freelance website, then you will need a system to pay them directly. Paypal is far and away the most popular system, however not everyone uses it. Several companies in India for example, can’t accept payments from Paypal. It is also not supported in certain smaller countries. It is in your interest to confirm the payment method they use, and make sure it is one you’re comfortable with.
Get them to ask you the right questions. Sometimes in my project description, I may purposely leave out some crucial details. This forces them to ask me the right questions before they can submit a realistic bid. Doing so tells me that they have read my proposal, rather than blindly making a generic bid. It also indicates to me their level of competence.
Analyze their bid pricing. When analyzing bids, the lowest priced may not always be the best. If a bid is significantly lower than other bids, initiate a conversation or do some research to find out why. In some cases it may be legitimate. Individuals and companies without a lot of experience may submit attractive bids, in order to get consideration. If I initiate a conversation with them and have a good feel for them, I may be willing to try them out. This has worked well for me with projects that are more speculative in nature, with flexible deadlines. The upside here is that you can get work done for significantly cheaper than it would have cost to get someone with more experience. If your deadline is less flexible, then be willing to pay more for a company with more experience.
Match their experience with your project. Take a look at their portfolios and previous customer ratings to see whether their past experience matches what you’re looking for. Their 5 star reviews and positive reviews may not mean much if they were obtained in projects unrelated to yours.
In future posts, I’ll talk about other aspects of outsourcing, and tips I have learned that have been successful for me.