Dave HeckerOutsourcing Expert Gives Unbiased Advice
Bio

Trying to find the BEST offshore software team?? Need to know how much your outsourced project will cost to build?? Or are you an offshore team that needs help entering the US market? Call me and let's talk about it. I'm a very experienced outsourcing pro and will give you realistic ball-park estimations and recommendations in just a few minutes. I've led outsourced development of applications for clients ranging from startups to enterprise and government since 1996, focusing on offshore distributed teams. Finding programmers is frustrating and confusing, I can help you navigate it and even introduce you to great teams that I personally know. Founder of SourceSeek, also founder Sagewing LLC (web/mobile development) since 2001. Outsourcing adviser to 1000+ projects.



Recent Answers


Eastern Europe is a big place and each country has different requirements and constraints for money transfer. So, it really depends on the desitnation you are sending money to.

The most common type of payment is wire transfer, as many countries in that region don't allow PayPal. If PayPal is available that's very popular, and after that you see everything from moneybookers to bitcoin being used as payment.

In our experience, it's best to ask your developers what they prefer and try to accommodate them. The reason is that it's usually (but not always) a bit more trouble for the offshore team to receive/handle the inbound payments than it is for you to send them.

For example, for some companies in Ukraine the easiest way is to receive wire transfers. But, they might need to to have a signed copy of the invoice that you are paying and present it to the bank each time you make a payment, just to get a released. There are also a lot of fees that your vendor might need to pay for inbound payments, etc.

Compare that to the US where you can easily send a wire transfer only and for a small fee.

Services like Skrill or PayPal are generally easier although it still might be tricky for the vendor to redeem money and sometimes it takes a while for them. The 2 or 3 percent fees with those services is frequently, but not always cheaper.

In terms of legality, this shouldn't really be a concern as any legitimate payment technique should be fine legally. Basically, if you are making a legitimate payment for a legitimate service to a legitimate vendor, there is no reason to think that any standard and reasonable payment system would not be appropriate legally. Just make sure that, in the event anyone were to ask, you could quite easily provide evidence that the services and payment were legit.

I disagree that you need to be concerned about money laundering as mentioned in another answer below. If you are legitimately engaged with an overseas software team and nothing illegal is going on, there should be plenty of documentation, emails, and delivered code to easily prove that what you are doing is legit in the very unlikely event that the IRS or government were to inquire.


The existing answers are good, and I agree with most of the price ranges that are mentioned. There is a huge range in rates and they are most affected by the region and the type of organization you are dealing with.

For example, a small shop in E. Europe that is exceptional in Ruby and has professional management, great communication skills, and the ability to work agile (for real) is going to cost in the high 30's. A company in the same region but with less mediocre communication skills will get you into the 20's, but it won't be the same experience. In India, it's similar but the entire price range is a bit lower.

In order to understand how much you should pay, we use a simple approach like this:

- we figure out what kind of client you are. are you a bootstrapped startup? are you techy? can you manage it from your end? Do you have time to take on a lot of QA? are you experienced with this?

- knowing your client profile we can determine what kind of vendor will be successful with you. if you are an experienced client, have outsourced before, and know the ins and outs of software development you can work with freelancers, boutique shops, etc. if you are inexperienced with software and haven't managed this kind of thing, we might look for more of an agency type shop that will provide really good PM and awesome communication, etc. If you are pretty experienced and going long-term, you might consider an ODC model, too.

- Knowing the type of client you are and thus, the type of vendor you need allows us to recommend a region and specific development shops for you. When we know what/where we're looking for, it becomes easy to answer that magic question ,'how much should I pay?'.

This is basically the process that our entire business is based on :) Check out this video series that explains the process in more detail (complete with 2014 pricing numbers).

Good luck, and feel free to reach out if you need any help choosing that perfect development shop. They are out there.


Some interesting answers on this thread, and generally I agree that there is no 'best country' in general. But, if you want to drill down and describe exactly what you need, including communication, culture, legal, technical, and subject matter, etc. I can probably point you in the right direction.

Each region is very different, to say the least, but there is usually a best fit for each clients need. At SourceSeek we look at it like dating - you need two profiles to make a match, because the client and the vendor have to like each other and work together well. Having a 'skills fit' is necessary, but not enough!

Typically a 30 minute phone call is enough to determine a target region. Good luck!!


Choosing a technology platform for your application is a big decision, so you are wise to consider it carefully. I would strongly agree with the answers above that say 'there is no best technology', and I would caution you against taking advice from anyone who actually suggests a technology based on your question - it's not possible to choose a platform without any details so anyone who is trying to do so it not being your advocate.

Choosing a stack, contrary to what many developers will tell you, is largely a business decision and not a technical one. Most applications can be built with just about any technology, and many of the considerations will be related to budget, hiring resources, hosting, culture, etc. and not specifically to how the code works. Tech is important, but an online business is still a business and you have to look at it that way.

My recommendation to clients is to never get a tech stack recommendation from a developer that you are hiring to build your application - they will usually choose the stack that they love the most, and not necessarily the one that is best for you. Seek outside advice, and make a carefully considered decision about which platform(s) you are interested in using, then seek developers to build for you.

Here's a quick video on the topic: https://www.youtube.com/watch?v=ct8AI0YqFlw

Good luck!! Dave


Hello -

I would agree that the real question is: what is your level of trust with your outsourcing partner? If you have a good relationship with them I don't see any issue in giving them the credentials.

As a best practice, it's always a good idea to maintain as much control over your assets and resources as possible when dealing with a far away vendor (or any vendor, really). Owning the source control repository, etc. is a great practice.

But, there is a diminishing return on trying to protect yourself from your own vendor. In the end, you'll have more success in outsourcing by investing in a solid partner who you can build trust with so that you don't have to worry about this kind of thing.

If you are dealing with a low-price vendor who's trustworthiness is unknown, you might consider relieving yourself of that stress by working with more reputable vendors. But, if this is just a new relationship and there are no red-flags I'd probably just send the credentials and save everyone some trouble.

TeamViewer is great for things like this, but it's certainly not a great way to build trust with teams so I'd only use it if you are worried about sharing your credentials more than you are concerned with building the relationship.

Probably it will be fine! Good luck - Dave


My company does a lot of consulting with offshore firms who are looking for a way to generate new business, so I hear this question a lot.

My first reaction is that you need to totally reverse your mindset when you talk about your own company. You mentioned that you have:

a great software developers team, proven track record, passion, real value

But, everyone says that. There a 10,000 companies that have those things, so a customer isn't going to notice it. You need to figure out what your company is best at (doesn't have to be technical) and present it as a solution to a specific problem that clients have.

Maybe a speciality, or really good project management, really good communications, a special expertise or experience, a personality, experience with a certain type of client.. really anything.. But, there must be some thing that makes your company 'special' otherwise you will be lost in the mix.

Don't worry about things like rates, or the fact that you have 'great' developers. Those are generic. Think about why a client would really choose you, and try to build on that! After you understand your company identity, it gets much easier to identify and engage marketing channels because you understand your target.


In the noisy, chaotic outsourcing market you won't be able to simply 'find premium projects' as you hope to do. There is really no definition for 'premium' in this context, and most of your competitors are looking for projects that are best-fit, leverage their core competencies, and are leads that they can best close and execute to completion.

In today's market, you have to work very hard if you want to rise up the ranks and become a successful outsourcing company. It's like running a marathon - if you ask people 'how do i run a marathon?' you'll get a series of similar steps and priorities from most advisors, but the hard work is left to you.

To win, you need to figure out your core differentiators both from sales and delivery. Then figure out what your target market will be and how you can penetrate that market.

In the global market today, your ability to compete and win work will be heavily influenced by your home country. Launching a shop from India is going to be extremely different than launching a shop from E. Europe, i.e. you need to understand perceptions in your target market and how to navigate them.

Finally there is the simple fact that most outsourcing shops just don't deliver well. I evaluate over 100 shops a year, and most of them suffer from similar things: they may have good developers, but they are lacking in mature management and client/engagement handling. No matter how good your developers are, if you don't have solid management in place you'll never be able to grow. In my experience, about 70% of offshore shops suffer from a simple lack of management and it eventually kills them.

To succeed, look within and understand you company - who are you and what is special about your shop? Once you have a real answer for that, you can understand the next steps.

Good luck!


It's never easy to understand how much something will cost because there are so many moving parts, phases, non-technical costs, and degrees of completion that need to be considered.

My advice to clients is usually to take discussion to a higher level and consider things like:

1) Do you want to replicate growthhacker.tv exactly? Or are you just wanting to make a business similar to it, and you want to get to an MVP with similar functionality? They have probably invested a lot of time/money into refining the application with promo codes, analytics, and lots of admin things that you can't really see. Do you want all of that, i.e. the cost to build a mature business, or are you just interested in what it would take to build the core technical system?

2) A lot of your cost will hinge upon your experience and what you can bring to the table. Do you have any experience with project management, design, ui/ux, etc? What level of service do you need?

3) It's also a good idea to look at this in reverse. Instead of 'how much will it cost?' you can consider 'how much do you have to invest?' - then get an idea of what is possible with your current resources.

A good technical person/consultant should be able to describe some ball-park prices based on various scenarios so you can get some context. There will really never be a 'cost' for something like this, but you should be able to get a sense of what possibilities exist and the general investments required for each.

Good luck!


I own a software services company and I frequently get inquiries from clients who have a great startup idea but are concerned about disclosing the idea to software developers, and subsequently having it stolen. In many cases, these clients ask me to sign an NDA before I can even see the idea and give them some feedback about what it would take to get it done.

Here is what that looks like from my perspective:

1) I don't sign NDA's just to see an 'idea' from a prospective client. This is a hassle and the more experienced, sophisticated clients who actually have money and are serious about their projects rarely ask me to sign an NDA (actually never).

2) An idea, no matter how good, is rarely worth much. It's the execution that is much, much harder. So, protecting your idea should't be a priority - someone else is probably thinking about the same idea right now. Start executing and do it better, faster, and more profitably.

3) Asking for an NDA makes you look like an amateur. Here is why: while you are worried about protecting your great idea, there are other entrepreneurs who have great ideas and they are doing the exact opposite of what you are doing. Instead of hiding the idea, they are pitching it to anyone and everyone they who will listen, hoping to get feedback and improve the idea. Who do you think will succeed first?

4) Finally, it's just not possible to keep your idea secret and have other people collaborate on it. Why fight this battle?

As for getting someone to do the coding without any payment, your only real option is to give someone equity or just have them partner with you for some other reason. In today's market, that is very difficult and even a very good idea with a good team behind it will have trouble doing it.


The best way to figure out 'which firm is best for me' is to drill down into what your needs really are.

For example, is it really necessary that a single firm does the design, branding, development and everything? A full service firm like that is easily found, but they are frequently expensive and there is usually something they are 'best' at (i.e. they are stronger at design than development, or the reverse).

There is also your budget to consider. Some firms will happily eat up your whole budget, but you can save a ton of money by separating out a few things and looking for multiple vendors to handle them. For example, hiring a freelance designer to do the logo/designs, and a ui/ux freelancer to wireframe it out would allow you to search for a firm that just does development, and that's going to be easier and cheaper (usually) than finding a full service shop.

It's also a good idea to consider the specifics of what you need built, as has already been mentioned. If you have a complex app that is going to really take some technical chops that might lead you to a different vendor than a relatively simple app. Along those lines, don't forget to consider the back-end - most 'full service shops' are standardized on a specific stack (i.e. php/mysql) and that may or may not be a good choice for you.

Finally, consider what you can bring to the table so that you aren't paying for service that you don't need. If you are very good at documenting and are able to write up the specifications yourself, you might not need such a full service firm. If you are new to project management or the whole app world in general, a powerhouse project manager could bring a lot of value but just because a shop offers soup-to-nuts service doesn't mean they are good at project management. So many of my clients are refugees from the soup-to-nuts shops, actually.

Look in the mirror and try to define your needs in more detail, and you'll have a better idea about what that 'perfect-fit' vendor might look like, and it'll be much easier to find them!


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