ESYB2 090 - Nightmares From Outsourcing Technical Product Development
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[00:00:00] There's a very common thing that happens when non technical entrepreneurs ask me, well, should I outsource? Should I not outsource? And of course, I always fall back on, well, what if you learn to code? What if you empower yourself? I prefer that people don't risk their money. Of course, many people prefer to outsource rather than learn or work harder the programming, or maybe they just hate the programming.

For whatever reason, they end up outsourcing because obviously they're hoping for the best. And they're a little blind to how bad things can get. So in this video, I'm going to actually go over some real world nightmares that I've seen happen to my clients. And these are going to be real examples. I'm not going to mention the clients by name, obviously, because these are not good things, but this is like all I've seen, and I've seen not just once, I've seen like probably hundreds of times over the years.

So, there's one core problem with outsourcing. When you start outsourcing with one developer or company, it's really difficult to take that code base, And give it to a new developer or a new company, you [00:01:00] almost have to start fresh because the new developer company, they can't make that much use of the old code and sometimes it takes just as much time to figure out what's going on in the old code as much time as it takes to rewrite new code.

You basically are kind of stuck with your developers and you don't know if they're bad until you begin working with them, which is a very bad time to figure out that they're bad because you cannot switch now, because every day you're spending more and more money and it's harder and harder to leave that project and you're hoping and hoping for the best and the best is coming less and less.

So before they start, they can promise you the world. After they start, and you've already maybe paid a deposit or something like that, they can go over budget, over deadline, and you can't do much. Because you'd have to restart entirely. So, you kind of just have to go with what they say, unless they are truly, truly terrible.

Most entrepreneurs, they just end up, okay, waiting a little longer, spending a little more. Of course, that's terrible, but [00:02:00] they're stuck with that. And keep in mind, the launch of your technical product or app, it's just the beginning. Really? It's like day zero. What really is going to have to happen is that you must update the product long term, like years out.

So of course, if you had the technical expertise in house, like you were able to code or your partner, if you had one. Was able to code, then it would all be free in house work. And you can be very flexible. If this is a skill you outsource, then you are really depending on somebody else. The cost of the development long term will make whatever the cost is for the launch seem tiny.

So in this conversation, a lot of entrepreneurs ask, well, what's the difference between hiring maybe a freelancer engineer or agencies? Freelancers are cheaper, but they're also less reliable because if they don't like you one day, they can just quit. Something happens in their life, they get a full time job, they can just quit or they can put you very, very second priority and [00:03:00] just spend a couple hours a day.

They may be in a different country. You can't really get a hold of them. It's really difficult. Sometimes their communication is not amazing. There's all kinds of challenges with the freelancers, but they're cheaper. And if you start thinking about hiring agencies, well, guess what? Half of what's called agencies are just developers who are calling themselves agency anyway, or maybe like one or two developers, so it's not really an agency.

Real agencies are established ones. They're typically much more expensive, but they are more reliable. If one engineer quits, they have another one to pick up your work. And they're usually build higher quality products, but the challenge with them is that they're pretty expensive usually if they're good and you can expect to spend maybe tens of thousands of dollars if you're hiring a U.

S. based agency. And even if you're hiring an overseas agencies, it can still be quite expensive. So what happens is for most entrepreneurs, and this [00:04:00] is what I see often, they get really excited. They overspend to hire engineers or agencies and the money runs out quite quickly and they can't sustain the business long term because they have to actually make so many changes because they have to figure out how to improve the app, how to make money from the app or the technical product.

And there's so many things that they have to do that they can no longer afford to do and the business just kind of runs into a wall and essentially fails. This happens time and time and time and time again, so be very careful. And another thing that happens is a lot of times the developer or agency builds the app.

You can launch your app and then you get like zero downloads. And you think, Oh my God, I haven't thought of how to promote it. Because the developer is not going to help you with that. They just want to develop the app. But you should be thinking about how to promote it, even before you write your first line of code to see if there are viable strategies for your situation.

So hiring somebody to just get [00:05:00] you a product can really happen prematurely at times. So be extremely careful when outsourcing development for technical products.

