Commit To Your Core: 9 Reasons Why Every Entrepreneur Should Outsource

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Commit To Your Core: 9 Reasons Why Every Entrepreneur Should Outsource

 

The following is a guest post by Scott Dinsmore.  Scott is an entrepreneur, Personal Freedom Coach and value investor. Read more of his articles at Reading For Your Success or grab his free eBook.

The day of the founder doing everything is dead. No one is really a salesperson, marketer, graphic designer, developer and customer service rep. As an entrepreneur you may do all these things, but that doesn't mean that's the smartest way to run your business.

Years ago Michael Gerber coined the the term E-Myth, referring to the entrepreneurial myth of people going into business to do what they love, only to realize that 80% of the business has nothing to do with their passion--but instead with building and running a company.team sourcing

This often results in one of two outcomes: The founder hates his job or the business fails--usually the former follows the latter quite closely.

It shouldn't be this way and it doesn't have to be.

I’ve started two businesses in the past two years. Outsourcing made this possible. Without it I'd be nowhere. With it, I have two profitable ventures and the time to think and work on the projects that make the biggest difference in each of them.

Outsourcing has become a must. As a founder and entrepreneur, you can't afford not to. Here's why.

1. You need a prototype early. Scratching your idea on a cocktail napkin long after you should be at home is a start, but only a start. You need a prototype to sell your vision- to friends, investors, your future team and charter customers. Depending on your skill-set, you may need a designer, developer, artist or a kick-ass storyteller to get you a presentation-worthy prototype fast and on the cheap. Any of this can and should be outsourced .

2. You need to stay lean. As entrepreneurs we live and die by our burn rate. While you may need help with a website or prototype early on, you cannot hire someone fulltime from the start, especially before you've sorted out how you'll structure pay, stock options and the other headache-creating benefits. It's premature and expensive. You are likely still forming your crystal clear vision. You no doubt need help, but you may need very specialized help. That's what outsourcing is made for. Hire your generalists and outsource your specialists. Only pay for what you need, no matter what stage your business is in.

3. Test your team. Regardless of how much capital you have, no one can afford to hire a dud. Whether you outsource or not, starting out with a trial (via internship, project-based work or some sweet competition) is a must. You may be looking for a team in India or right down the street from you. You can screen by location (and a ton of other criteria) with the resources I mention below. Get clear on what you need and find the people who were made for the role. Let them know a full-time job is on the line. That'll get the healthy competition cooking. Hiring and firing is a pain in the ass (and expensive). Try before you buy, and avoid those duds.

4. Be forced to know what you want. Since outsourcing is project and skill set based, it forces an entrepreneur to do something most never fully do — define their vision and the actual tasks they need done to make it happen. Sure, these will change over time, but nothing is more frustrating than hiring someone (or being hired) when neither side has a clue what the target is. If you don't know the skills you need then how could you ever expect to hire the right person? Founders are notorious for loving the vision but avoiding the details. Force yourself to take your medicine.

5. Live and die by the 80/20 rule-Only do what you're best at. Say you started a business because you know AJAX, MySQL, PHP or some other technologies above most the world's head, and you are going to build a kick-ass web app with it. Then how much sense does it make for you to be burying yourself in PhotoShop trying to create a logo? None! You have super human strengths (we all do) and you know what they are. Things you feel you can do better than most anyone in the world. That is your personal edge. Leverage it as much as possible. This is your 20%. Focus all your attention on the 20% of your workday that truly moves the needle, based on your natural strengths, and outsource the rest. This might mean customer service, design, social media marketing or coding. It's your job to assess yourself and your team. If you aren't lights-out good at it, find someone else to do it. They'll do it better, in less time, and surely for less money.

6. You can't afford not to. Would you believe me if I told you I have a team in India who handles all my SEO/SEM, deep analytics, web research, graphics and coding for between $3-$5/hour? I do. Ravi leads the team. He has for three years. He's loyal, trustworthy, wicked smart and best of all, he works his ass off. These guys have college and advanced degrees and are happy to work for rates often between $5-$20/hour for just about any technical task you could imagine. But the real clincher is how hungry they are. Not only are they qualified to do the work, they will do it in half or a fourth the time. It's pure geo-arbitrage. The pay is great for them and the output is awesome for us. Does it get anymore win/win?

7. You are worth more than you think. If you're telling me you could do the stuff yourself for cheaper, remember the 80/20 rule. Just because you can do it yourself does not mean it makes any sense to do so. First off realize that as a sharp entrepreneur with fire in his belly, your time is worth a lot. I'd say $50/hr at the least. This may help make the decision. And don't forget about the opportunity cost. Your mind and time are your most valuable assets. Spend them wisely.

8. You can outsource anything. Literally anything...Over my past four years, I've outsourced more business jobs than I thought possible and more personal tasks than some would consider appropriate. The only limit is your creativity. Here's a taste of projects I've sent afar so I can focus on my core of writing, coaching, investing and business building:

  • web research
  • customer service
  • accounting
  • web and blog design
  • blog and copy writing
  • blog comment moderation
  • locate best courses in your area for various subjects
  • voice transcription
  • SEO, SEM and Social Media Marketing
  • personal or administrative tasks, travel plans
  • locating the perfect gift on Valentine's Day (who said it has to be all business?)

For more ideas check out Elance's 100 Projects You Can Outsource.

9. It feels awesome to know someone's working as you sleep. No joke. Not only is it unbelievably efficient, but it's just plain fun to have all your tasks completed while your off dreaming (since some of the best outsourcers are found in India and other cheap foreign lands), leaving you ready to keep the ball rolling when you wake. And there you have it. The holy grail: You've found a way to work 24/7 without losing your life.

Where to outsource.

The list is endless but the below should be all you need. I've had personal experience with most of these.
  • Elance- One stop shop for anything outsource
  • V Worker (formerly Rent A Coder)- More technical focus
  • Fiverr- Every job for five bucks, graphic design to grocery shopping
  • Ask Sunday- Large team for any task under the sun
  • Virtual Assistant Board- Job board for outsourcers and providers

You're a Founder, Now Start Thinking like a CEO.

What does a CEO actually do? They don't build products, they build businesses. They are nothing more than master outsourcers. Their expertise is having a vision and creating and motivating the right team of superb skill to make it reality. They don't bury themselves in a manual to learn Photo Shop to design their website. They find a designer so they can keep the train moving forward. There is no pride in doing everything yourself. If you expect to really be competitive, it's impossible. Spend your time on the work you know deep down only you can do. The work that will really change the world. Find someone else to do the rest and success starts to become a lot more realistic.

So, what do you think?  Have you tried outsourcing non-critical tasks that are not your superpower?  How did it go?  Would you do it again? Would love to hear your experiences and lessons learned in the comments.

One More Thing...A FREE Special Event And Gift To The OnStartups Community

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OnStartups Presents PlusConf

Where: Anywhere in the world via your browser at http://www.plusconf.com

When: 12/7/2010 12:00 PM EST

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Learn from the most successful web app founders and CEOs on what makes your startup tick.  

Speakers include:


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Todd Garland- CEO of BuySellAds

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Dan Martell- Co-Founder of FlowTown

Allan Branch- Co-Founder of LessEverything

Posted by Dharmesh Shah on Thu, Dec 02, 2010

COMMENTS

Very nice article! It makes me realize that I'm doing way too much stuff (the Photoshop logo hit me in the heart!). Still, we're not in a position to be paying to outsource, therefore our small group does everything in bootstrap mode.

posted on Thursday, December 02, 2010 at 11:11 AM by Kris Morness


Very nicely said. You should add Odesk to the list as well.

posted on Thursday, December 02, 2010 at 11:27 AM by Umair


Awesome article. I have been outsourcing like crazy lately. Every time I try and tell other entrepreneurs and developers how awesome it is, they all complain about an experience or a developer. 
 
The feeling of other people working for you around the clock is extraordinary. 
 
Here's how I set up my projects and it works well for me. This only works for bite-sized specific tasks and doesn't really work well for ongoing projects. I actually haven't even tried hourly rates because I'm worried about the management of it. That said, sites like oDesk have some pretty incredible technologies to take care of possible issues with hourly work. 
 
-Pay flat-rate wages instead of hourly wages 
-Pay only for deliverables 
-Hire contractors who communicate quickly 
-Interview contractors on chat, this will help you figure out quickly any possible communication barriers 
-Set quick 5 minute meeting milestones for projects that are > 3 days 
 
Would love to hear about how people manage hourly developers, and whether or not hourly vs. flat rate works better.

posted on Thursday, December 02, 2010 at 11:47 AM by Alex Cook


Good information! I especially appreciate the list of where to outsource. 
 
 
 
Mary Jo

posted on Thursday, December 02, 2010 at 11:56 AM by Mary Jo Van Horn


Completely agree with this article. Specialist outsourcing is the way to go with a modern business.  
 
We've had a lot of success outsourcing through Elance, both using hourly and project-based billing. 
 
I personally always interview by phone rather than chat. The couple extra dollars for the long distance call is worth hearing the person's voice and gaining that extra connection. Or I schedule a GoToMeeting and they can dial in using Skype while I connect by phone. 
 
My recommendation when outsourcing larger projects through Elance is to a) always pat the $15 for a featured listing (even if you're only spending $100-200, it's probably worth it to get the extra proposals), b) search the provider listings and invite 10-20 providers that look qualified (increases your chance of getting a good provider) and c) use an outside project management system to track progress (we use Liquid Planner, but use some system with regular reporting).  

posted on Thursday, December 02, 2010 at 12:44 PM by Trevor Lohrbeer


Amazing and Enlightening post. 
But what is the way out if someone has just started on his own, and can't afford outsourcing to experienced people?

posted on Thursday, December 02, 2010 at 1:46 PM by Sahil


Couldn’t agree with you more, Scott! Great article. 
 
There are 2 reasons I believe we attempt to do things on our own: 
 
1. Conserve cash  
2. We sometime believe (or is it  
often) that we can do it better  
than others – foolish, of course. 
 
I have wasted a ton of time trying to do things on my own that I could have easily outsourced – logo design, website design, web content development, training development to name a few. Now everything is outsourced – well, everything that can be outsourced.  
 
Finding the right resources is the key. In my experience, often it takes a few tries to find the right individual or a team. I start out with small tasks to identify the right resources for my project. 
 
Once again, thanks for a great piece. 

posted on Thursday, December 02, 2010 at 2:09 PM by Bidhan Patnaik


Along these lines, for any software publishers interested, here's an article I authored for SoftwareCEO Magazine specifically on software companies outsourcing their e-commerce payment processing: 
http://tinyurl.com/yj8ggdn 
 
"How To Boost Your Profits By Outsourcing Your E-Commerce" 

posted on Thursday, December 02, 2010 at 2:27 PM by Dan at FastSpring


@Sahil - Even at a very early stage of bootstrapping, one could still outsource a lot of stuff -- in the long run, it will save you a ton time and money.

posted on Thursday, December 02, 2010 at 2:30 PM by Bidhan Patnaik


I discovered Scott last week or so on the Elance blog. Outsourced my first gig then too. It worked. I think I need to do it a few more times to get hooked. Firmly believe what he is saying here. Scott I am glad you are out there man.

posted on Thursday, December 02, 2010 at 8:27 PM by Malcolm C


Do you also outsource your blog writing? :) (Not totally kidding - I'd probably do it.)

posted on Friday, December 03, 2010 at 8:51 AM by Peter Alberti


Nice article. couple of things that i will add.. 
 
1) Spend a quick 5 minutes everyday with your remote outsourced developers. It helps tremendously keeping them on track and you know everyday progress. Dont prolong this meeting to more than 5 min status meetings? Ask every developer to give quick status in 1 min. Assuming you have 5 developers you will be done in 5 mins. Use Skype. 
 
2) Make sure your IP agreement is strong. I had a bad experience with a firm in India when they put my product for sale on ELance. 
 
 
 
One shameless plug: If you want to develop rich native mobile applications on all popular devices, and get them to market immediately and very cheaply, use Vaayoo. 
 
 
 
Our world class UI designers will create User Interface and workflows and get it approved from you. Once approved we create native mobile apps using Vaayoo Mobile application framework. We will even create server side database and biz logic for you. Your app will be capable of taking pictures/videos, use gps, connect to social networks like facebook, twitter, Linkedin, picassa, youtube etc, have mcommerce facilites etc.  
 
 
 
And the best part: Your application will continue to evolve with new features and updates even after it is launched. All this covered in a surprisingly low monthly subscription fee. 
 
 
 
Time to market is tommorrow and costs are negligible. 
 
 
 
http://www.vaayoo.com/appsplatform/VaayooAppsplatform.aspx 
 
 
 
Got an idea? Turn it into a mobile app in a snap 
 

posted on Friday, December 03, 2010 at 1:19 PM by Ranjit


Outsourcing is amazing when you have good people that understand what you're trying to accomplish. 
 
Outsourcing is horrific when they misunderstand your objectives and burn a lot of time and money on something you can't use. 
 
If you can clearly document and explain a process, it's a great candidate for outsourcing. 
 
But some things you really do have to do yourself.

posted on Friday, December 03, 2010 at 3:24 PM by Jason Hanley


At Techbridge we believe that a "mixed" approach is the best way to run your business: keep crucial busyness logic implementation in-house while outsourcing some technically complicated projects to a reliable company. 
Sorry I do not think odesk or elance are the best places to meet your outsourcing partner. 

posted on Friday, December 03, 2010 at 8:39 PM by Sasha Baksht


@ Kris Morness: Glad it resonated. I am the same way with photo shop. You would be surprised how good of a deal you can get on design work. You can get a really nice logo done on Fiverr.com for $5. No joke. It's amazing.  
 
@ Alex Cook: Paying for deliverables is huge. One way I have dealt with hourly is to set the project scope, have the outsourcee paraphrase it to be sure they are clear (Especially if in India, etc) and ask for hour estimation and do check ins. I wrote a lot about this in a recent article I did for Elance. Here it is: http://www.elance.com/p/blog/2010/07/12-tips-for-outsourcing-your-business-to-the-next-level-in-todays-economy.html 
 

posted on Friday, December 03, 2010 at 8:59 PM by Scott Dinsmore


Agree in general however you cannot outsource your core technology and most of the freelancer from India are not such a good developers. But again for logo design and simple things then outsource is the way to go.

posted on Saturday, December 04, 2010 at 12:50 AM by Miki


We normally outsource the copy for our website, we will soon start creating videos on gripping golf clubs as well as well, and those will be outsourced as well.

posted on Saturday, December 04, 2010 at 7:42 AM by Anton at Golfing gloves


...and while outsourcing you have more chances to actually exchange money for value, not money for time!

posted on Saturday, December 04, 2010 at 9:21 AM by Unbrand Me


@ all you sharp commenters: So glad this has proven powerful for you! I can't begin to tell you how different of a place my businesses and I are in as a result.  
 
One thing I am hearing in a lot of the comments is that you might not be able to afford it. Please do not make this assumption without posting a project and seeing some bids. You can get a logo on Fiverr for five bucks flat, in a few days or less-I just got another for a new blog. It will look good and if it doesn't they'll redo it.  
 
Elance guys can also be super good deals. Remember to weigh out the value of your time too. Sometimes people will not outsource because they want to fill their day trying to figure out the basics of photoshop just because they want to avoid the real crucial work of getting out of the office and selling! (or whatever scary important task there is to do) Are any of you doing this? It's easy to do and I've been there. Give it some thought. Know how you should best spend your time.  
 
As for more hard core code and development, there are still deals to be found on Elance and some of the others mentioned in my post. Some of these guys are super smart, educated and experienced. In the world of outsourcing, low cost does not always mean low quality. Not when geo-arbitrage is introduced.  
 
Happy to answer any more questions. Good luck with the projects! 
 
I've coved this topic on a few others sites as well. you can find these articles at: http://www.readingforyoursuccess.com/scott-around-the-web 
 
-Scott Dinsmore

posted on Sunday, December 05, 2010 at 9:12 PM by Scott Dinsmore


Myself and my team located in Ghana have been providing administrative support including customer service support for some web based businesses in the USA for the past 7yrs...$20 a day is just ok for us, and we work tirelessly to give results. You can get in touch with us if you need any help. Or call +233244670660

posted on Tuesday, December 07, 2010 at 4:17 AM by Tina Foli


We have been outsourcing various work for 15yrs. I am curious how you found Ravi? I have found that client who outsource and have no experience typically get killed. Never a deliverable that is ontime or works. Qualify well and stay on top of your milestones.Most offshore engineers are working on multiple projects with no focus.

posted on Tuesday, December 07, 2010 at 10:39 PM by Doug Thaler


Jeff Mills also has http://SevenStew.com which offers jobs in multiples of $7 $14 $21 etc.

posted on Wednesday, December 15, 2010 at 10:29 AM by Mitch Baldwin


Completely disagree with this article. The best software companies develop and own their product development.

posted on Tuesday, December 21, 2010 at 11:36 AM by Karl Treier


Karl: I agree with you. If you're a software company, you shouldn't outsource your software development. 
 
The idea is to outsource the things that are *not* core.

posted on Tuesday, December 21, 2010 at 1:20 PM by Dharmesh Shah


Thanks for clarifying Dharmesh. I totally agree, outsource everything that is not core. I think the article gave a different impression however, indicating you should outsource everything, even what is core to your business.

posted on Tuesday, December 21, 2010 at 1:26 PM by Karl


I half agree with you Karl. Everything is moving incredibly fast. We're a software company - and we recently started outsourcing bits and pieces which would normally take us 1-4 weeks in-house to build. 
 
We then take those code samples and stitch them into our product. We handle all of the user experience, design, and integration work - we outsource the complex pieces. 
 
I don't think it's a good idea to outsource your entire software product - especially your user experience design - but I think it's a great idea to outsource bits and pieces when it makes sense. It can really speed up your product development. 
 

posted on Tuesday, December 21, 2010 at 1:29 PM by Alex Cook


Outsourcing is definately the way to go... Great article, thanks Dharmesh

posted on Wednesday, December 22, 2010 at 2:40 PM by Magaliesburg Accommodation


What about outsourcing the quest for funding? We did this about 6 months ago and were lucky in getting very valuable help. Of course, one has to be careful in selecting, but we hit on the right one. No secret: eSolve Capital (http://esocap.c9M

posted on Saturday, December 25, 2010 at 7:09 AM by Marjorie Jacob


I agree with Magaliesburg Accommodation "Outsourcing is definately the way to go... Great article, thanks Dharmesh "

posted on Monday, December 27, 2010 at 3:53 AM by canlı maç izle


After this blog post was published, I've been spending some time studying outsourcing. 
 
I posted a question at answers.onstartups: 
"Is Outsourcing Evil"? 
 
http://answers.onstartups.com/questions/18636/is-outsourcing-evil

posted on Thursday, January 06, 2011 at 5:27 PM by Alex Cook


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