Startups That Became Giants Because of Outsourcing

Globalization is the result of technological progress. At the same time, globalization processes pushed the tech industry forward. When you are on the way to launch a new product, your business will require many expenses.

Today, a typical salary of a software developer is around $60,000.00 annually.  It's ok if you are already an established player on the market. But what if your startup is just a great idea?

The companies, especially if they are startups, often turn to the outsourcing strategy. By hiring a dedicated team and outsourcing those parts of your project where your team is not strong enough, you may get both higher quality and lower price.

Michael Solomon, CEO of 10x Management, in his interview for Startup Grind Blog, states:

"Even the companies that have the money often spend four to eight months finding the right talent and if they don't use freelancers as a stopgap, they burn through their capital without building their product. This is frowned on by investors and not good for business. By comparison, it makes even the highest level freelancers a great deal."

Here are some examples of successful startups or companies that outsourced on the early stages:

Skype

This company represents the most famous example of the outsourcing. The founders of Skype, Dane Janus Friis, and Niklas Zennström, outsourced software development process to Eastern Europe. The outsourced team built the platform through which it is possible to conduct calls with a help of the computer.

It is evident that Skype is one of the most successful companies in the IT market. It gained more than 11 million of users just in a few months after its launch.

Slack

This $3 billion-valued company outsourced design development of its logo and website. Design firm MetaLab made what we see now while using Slack. It was just early steps of Slack world domination. In the ‘Slack's $2.8 Billion Dollar Secret Sauce‘ - written by its founder Andrew Wilkinson.

Slack is the most successful and used communication tool among the companies. However, it's evident that the logo and design influence its great story of success. The company outsourced design development to MetaLab. According to TechCrunch, Slack is the Best Startup of the year.

UpWork

It's not surprising that the platform for outsourcing was created with a help of the outsourced specialists. UpWork outsourced a large amount of work to its contractors.  Also, according to Startup Grind, its CEO mentioned that  150 of the site's 200 product and engineering workers are freelancers from the oDesk marketplace.

Opera

This company positions itself as one of the leading web browsers in the world. At its early steps, Opera outsourced application development to other countries.

Google

From the start until now, Google relies on an outsourced development team. Because of the talented team from abroad and cost effectiveness, Google startup that had less than 70 employees became one of the biggest players in IT market.

Apple

Apple also follows the ‘outsourcing trend' and hired the dedicated team outside their company. The company outsources software development and maintenance to another country.

IBM

The company also outsourced its IT services in the early years. IT department plays an essential role for the company, and following this, the company invests over $1 billion a year in education for the employees, which is usually done via distant learning, according to PixelCrayons.

GitHub

This Internet hosting service gets its success thanks to outsourced services as well. At the early stages, GitHub CEO and co-founder Chris Wanstrath met Scott Chacon at a Ruby meetup in San Francisco. Chris hired Scott to work as an outsourced consultant. He wrote the back-end of Gist, which shares a feature on GitHub. The fact is that without outsourced development, this startup could face a failure. Today, the company is valued $2 billion and has over 11 million of users.

Alibaba.com

It was a typical startup with only $20,000 at the beginning. However, outsourcing helped the company to create an incredibly successful e-commerce website. Alibaba.com is a Chinese marketplace comparable to Ebay or Amazon. The company found its outsourcing U.S. team that helped in building an e-commerce site based on the American experience with successful online shops. Additionally, they overcame Chinese Internet restrictions.

Staff.com

This company has a similar model with UpWork both in outsourcing and provided services. Staff.com offers outsourcing services and uses outsourcing to grow from a startup into a global business.

Fab.com

For this company, outsourcing saves both money and time. The outsourced team has built a website of the company. These employees were outside the U.S., so the costs were much lower. Only a few weeks after its launch, the company received the first $1 million.

Basecamp

This company uses outsourcing strategy as a core of their business. At the beginning, it was just four people and many of remote employees. Basecamp still hires many freelancers and represents itself as a technology leader for remote workers.

SeatGeek

This company is the largest ticket search engine of the web for the event industry. Its founder Jack Groetzinger relies on outsourcing since the company's launch until now.  He chooses the outsourcing strategy and delivers most of the tasks to freelancers and remote staff. The company itself consists of seven full-time employees on the board.  Outsourced specialists are involved in a wide range of tasks from collecting data to software development.

AppSumo

$50 startup that became $2 million Company. One of the biggest web apps distributers, AppSumo used outsourcing services in various fields such as IT, marketing, and content-management. A founder of the company, Noah Kagan, hired a freelancer who built the PayPal button. The cost of such work was just $50, and a few weeks later, the company has launched. Today, AppSumo is valued over $2 million. So, do not believe the articles claiming outsourcing is dangerous.

With a help of outsourcing, you can hire an exceptional talent. Outsourcing may give the opportunity for cost effectiveness that is necessary at the beginning. The companies listed above show how outsourcing may push your startup forward.