My favorite author, Simon Sinek, writes a book called “Start with Why”. The basis of his point in starting with why is that understanding why a business functions the way it does is not based on profits but on the emotional reason for existence. Sinek argues that people don’t buy what businesses make, they instead buy why the business makes it. The what and the how are important factors too, but follow the why in Sinek’s Golden Circle.
We’ve spelled out the why in our last post, Why San Francisco Software Companies Outsource. It boils down to getting the best talent globally available to develop the best products at a lesser cost. This continuously improves the quality of tech products being built, motivating developers to build better and better products. Now that you know why, you may also want to know what Silicon Valley is outsourcing.
As Silicon Valley outsourcers have embraced globalization of software development, this has expanded the possibilities for what can be outsourced. When offshoring was new to the US, many thought to outsource non-skilled jobs, such as manufacturing. Now, the market has changed and many countries, like India, have highly skilled workers fully capable of building your core product.
What Companies Can Outsource
What Silicon Valley outsourcers are choosing to subcontract is largely dependent on the size of the company. The number of in-house employees and the skillsets of those employees are often what urges tech companies in San Francisco and abroad to outsource. Here is what SF tech companies are outsourcing now:
Startup Scene: Everything. Ok, not everything but quite a bit of core product development goes overseas as this is often the largest expense for a new company. For some companies this is an MVP (minimum viable product) and for others it’s a full fledged native or hybrid app. The big draw towards offshore development for startups is cost savings. Typically, startups don’t have the cash flow needed to support full time W2 employees for each project they want to work on—that applies to both the company’s product development and their client’s.
Small to Medium Business Brigade: The SMB’s of Silicon Valley are looking to offshoring where their in-house skillsets are lacking. While SMB’s have more predictable cash flow than startups, many still experience fluctuations. Those fluctuations make it hard to justify hiring a Senior Developer for just a short period of time.
Corporate Clique: Big companies outsource too! From extra QA to code and test coverage, even tech giants don’t want to waste time on menial tasks. Silicon Valley tech companies are among the most competitive workforce in the world. Because the market is saturated with companies trying to hire the best San Fran has to offer, it’s hard to keep good employees from being swept away for bigger salaries and better on-the-job perks. Outsourcing expands the talent pool from just Silicon Valley to all developers. By utilizing outsourcing practices, these tech companies can hire the best of the best.
Simon would be proud. We started with why San Francisco software companies outsource, then we filled in the what with options for every company size. Now all that’s left is the how. We’ve got some opinions (and a pretty strong bias) about how to outsource successfully and can help. Reach out.