Startup life is hard, especially in the tech space. You’ve got no money, no time, and your office is often your kitchen. The upshot is that you’ve got boat loads of passion and tons of drive to turn your groundbreaking idea into a reality. With no money and no time, startup success is easier said than done. Because you have no money, you need a cost-effective way to build your new product or app. Why not hire a software freelancer? The internet runneth over with software outsourcing hubs that will help their clients get connected with “top tech talent.” If it sounds too good to be true… it is.
How Outsourcing Hubs Work
Outsourcing hubs or freelance software providers are in the business of connecting you, the client, with a freelancer who can build your product based on your specific technology needs. The outsourcing hub screens the developers that apply with them to make sure they are as good as they say they are, and then recommends developers to you based on the product you need built, the languages you’d like to develop in, etc. Some freelance software providers even boast providing the top 3% of the world’s freelancers. The slight exaggeration there is that not all freelancers are on that particular network. If a developer is in the top 3% of all tech talent does he/she really need an outsourcing hub to find clients? My guess is probably not.
Once you’ve found a freelancer who you feel good about working with, you negotiate terms with them such as contract length, deliverables, and price. The outsourcing hub will skim off the top of that total cost too. Some have found this model for software development to be extremely effective while others say it’s better for the freelancer than the client.
The Problem with Software Outsourcing Hubs
If you’ve never worked with a freelancer you may be disappointed to find that there is a definite learning curve. Freelancers make their living by taking on multiple projects at a time. This is great for the freelancer, but not always great for the client. If you’re going to pay a pretty penny for a new product (let’s face it, no form of software development is cheap), don’t you want the freelancer to be dedicated to your project? Duh.
Freelancers often work on an hourly rate. That hourly rate may seem attractive compared to a $60,00 contract, but there is a caveat. Because software freelancers work on more than one project at a time, this can cause a lag in getting your project done. Thus you may end up paying for more than just your project. More hours logged means more money spent. Not to mention, after your project is completed, if you need to make updates it may be difficult to contact this person again.
Despite this year’s presidential election, everyone does love to rally behind a great leader. As a freelancer with no commitment to the outsourcing provider, there is really no incentive to perform for anyone other than themselves. Lack of leadership can also lead to less emotional connection to the product itself and it’s owner. What gives an employee incentive to work hard is perks from their employer such as ownership or equity in the company, comfortable salary, healthcare, and other benefits. So if using a freelancer is not saving you money or time, the two things you don’t ever have as a startup CEO, what is it saving you?
The Best of Both Worlds
Thankfully, the free market has allowed several types of software development models to exist and succeed. So while using an outsourcing hub may work great for some, others need a longer commitment, a full fledged tech team, or even in-house employees. Being in the tech space, we’ve spent a lot of time analyzing the market and the various models out there.
Hybrid agencies, like Zibtek allow the benefits of offshore software development (like lower pricing) to meet the benefits of onshore development (like superior quality). We employ roughly 80 offshore developers who work out of our Pune, India based office. These employees are heavily vetted, paid a handsome salary, and are only employed by us. Because they are a part of a company, their schedules are dictated by how much time your project requires. So you only pay for the time you need. They are committed to producing great work because their job depends on it!
This model helps you actively manage the development of your product with one of our US-based project managers. This person is responsible for communicating with you about the progress of your development and is your go-to contact for any questions. Zibtek uses a foolproof ticket management process to keep your project’s development moving along in a timely fashion. We use tools like Redmine, Jira, and PivotalTracker to manage tickets. These tickets are created after the project manager has seen the scope of work, which he/she will distill down into two weeks, workable sprints for your dedicated developers to work on. Every two weeks the client receives a deliverable that they can actually experience.
We’re obviously biased, but doesn’t this sound a little easier than using a freelancer through an outsourcing hub? We think so too.