4 Outsourcing Mistakes That Sink Startups – And How to Avoid Them

Angela McDonald • 06/09/2016

4 Outsourcing Mistakes That Sink Startups – And How to Avoid Them

Outsourcing can be the making of your startup. It allows you to develop your idea faster, with fewer resources and less money. However, there are a number of outsourcing mistakes that can spell the end of your startup before it has even had the chance to get off the ground.

Outsourcing Mistakes That Sink Startups

1. Outsourcing too early

It is one thing to have a really great idea. But if that is all you have got, you are not ready to start outsourcing yet. Get all the information and do all the research first. Make sure you understand the market for your idea, if it is likely to be viable, and what the possibilities for growth are. Most importantly, be very clear what outcome you want to achieve.
If you outsource before knowing what you want, you are likely to waste time by changing your mind repeatedly throughout the process. You are also likely to frustrate your remote team by not giving them clear guidelines to meet, and expecting them to become mind readers. Ultimately, you will become frustrated by feeling like you have a team of remote staff who cannot read your mind and know exactly what you want.
By making sure you have all your ducks in a row before you start the outsourcing process, you maximise your chances of success.

2. Not sharing your startup’s growth with your remote team

When you bring remote staff on early (but not too early), they know what they are signing on for. A startup is inherently a risky employer – there’s no guarantee the market is right for your product or service. As your startup grows you shouldn’t forget that your offshore employees were willing to take that risk and come onboard.
As your company grows, if you promote local employees and have them reap the rewards of that growth while ignoring your offshore employees, you risk alienating your staff. That alienation can lead to key remote employees leaving and creating higher turnover levels in your already new startup.
By offering your remote employees career incentives for taking on the risk of being part of a startup, you also get employees who will work harder and take more of a personal stake in your success. They will have more accountability, knowing that rewards will follow when the business grows.

3. Thinking that outsourcing means you do not need managers

Plenty of startups think they’ve found the magic formula which will allow them to get rid of managers. This goes from reporting direct to the boss, complete self-management, to outsourcing. The problem is that this magic formula doesn’t actually exist. Outsourcing in particular requires good managers to help steer projects, and co-ordinate communications between remote teams, local teams and management.
It’s helpful to have managers who have skills beyond just management – tech experience for technology startups, for example. But the fact you’re outsourcing doesn’t mean you can do away with managers – if anything they become more important. Prioritise good communication skills and cultural sensitivity when hiring your managers and your outsourcing benefits with grow.

4. Not staying involved with your remote team as a founder

As a startup founder, while you don’t have to be an expert in every area of growing your business, you should at least know what the experts you hired are doing. As with outsourcing too early, by not being personally involved with the work your offshore employees are doing, you risk the frustration that the work being done does not match with your vision.
having good managers means you can be less personally involved with the day-to-day running of the team. But even with good managers you should know what your remote team is working on, be aware of progress and problems, and generally be on top of everything.

Deployed is a great option for startups, helping you mitigate some of the risk by reducing staffing costs while your venture grows. We also advise on how to best avoid outsourcing mistakes which could potentially ground your business before it takes flight. A dedicated account manager works with you to navigate remote staffing challenges, helping you to grow your startup from back-yard shed idea to multi-national reality.