Yes, outsourcing a highly qualified team is always beneficial. You can have flexible rates and engagement models. There are a lot of startup consulting workshops as well in which you can participate to actually validate your idea.
Well yes, outsourcing is good for a startup but only if you do it right. When you just outsource and you don't know anything then it will fail. Outsourcing is really for startup businesses than for small to medium type businesses. In order to save more time and money for the expansion of the business, they will outsource some of the tasks first and focus on the business core and create strategies that can help the business attain success. You can learn more about outsourcing here: http://www.offshorebusinessprocessing.com/bpo-services.
Well, let's consider what is generally good for startup: Idea? Investment? Cutting costs? Quality?
Agree? So what can a start-upper do about this points to follow them? If we talk about development, it's vital to find relevant skilled team that will contribute and help you deliver product on time at lower cost.
These guys are definitely aware of what kind of team do startups need: http://www.nexgendesign.com/concept
My personal rule of thumb on outsourcing is similar to the last couple of posts, only I view it as follows: If the activity and/or knowledge is directly linked to the "crown jewels" (competitiveness and profitability) of your business then "No", it makes zero sense to outsource those people, or that IP and activity. However, just about everything else can be considered for outsourcing.
Example 1: In the mutual fund industry, the "internal, financial analysis models and investment ratings reports" are the crown jewels of the business; as are the best performing Portfolio Managers. These activites and knowledge will never be outsourced.
Example 2: At software companies (Google, Microsoft, Oracle & Salesforce.com), their development groups and source code are the "crown jewels". They would never foolishly outsource their core development teams or publicly release their core revenue producing product source code.
Example 3: McDonald's has a different understanding of their company's "Crown Jewels". In effect, "outsourcing" (franchising) is the driver of their profitability; however, the "cookie cutter business model" and "product supply distribution" are the core crown jewels behind their continued success. McDonald's heavily regulates and inspects franchises to make sure they are following the business model / process and buying their supplies from McDonald's distribution centers. They want customers to have the same service and food experience not matter where in the world they enter a McDonald's restaurant!
So ask yourself, "What drives my company's competitive edge and profitability?" Once you know that, you know what NOT to outsource.
I see that there are mixed opinions there. Some strong objections too. Outsourcing is a great option if you know exactly what you want. Someone mentioned here that businesses will not succeed if core activities are outsourced. Of course they won't! If you want some assistance with secondary business tasks like bookkeeping, accounting, call handling, etc outsourcing is a great option. You will have more time to focus on your core business.
But if you outsource your very core, it means that you are letting the outsourcing firm take over. In that you do not have control over your business and so naturally you will have a bad experience. So if you know what you want, and go to the right company, yes, outsourcing is great. Check for data security measures like 128-bit encryption, 24/7 surveillance etc. Once you are sure everything is in place you can begin. The cost reductions and quality of work at some of the firms are great - real value for your money.
But the secret lies is "knowing" what you want. Cheers!
Yes, and in fact it is essential for a start up to outsource.
While the CEO or Founder needs to be in the lead, manage and control the venture, one cannot "stand up" a new venture without help from others - especially if you need to be a fast company. This help can be for IT infrastructure or other operational roles (like back end accounting, payroll, etc.), strategic business design to gain financing; and revenue generation before a full sales force is on board. (Just to name a few areas.)
In fact, all companies large and small, once they are in in steady-state mode, still use outsourcing to run and grow their business. This was confirmed with the acknowledgement of the strategy of "Core Competence" which became big in 1990s and drove a lot of business and industry redesign since then. The approach is to find your competency and then outsource the rest in order to have a most efficient, flexible and competitive business model that can compete globally. It was observed in the information and computer sectors at first and once it was recognized by leading business school professors it expanded.
Example: Apple is a design and marketing company and outsources actual manufacturing to Korean and Japanese companies, etc.
Example: Banks outsource customer services and IT operations.
And there are historic roots. The value of international outsourcing builds upon the 18th century Theory of Competitive Advantage by economist David Ricardo.
'According to Ricardo, if one country is more efficient than another in producing all commodities, trade between the two nevertheless would be of mutual advantage. "
(more at http://timelessecon.wordpress.com/2010/05/15/ricardos-hit-comparative-advantage-and-miss-labor-theory-of-value/)
Certainly there are a lot of good points made in most of the comments posted.
The suggestion I have for you is first spend some real think time on what are the TRUE Core Competencies of your business. In other words what is your key intellectual property that will drive differentiation in your market.
Then, I strongly recommend to invest in internal resources that are critical elements of your core competencies. In my humble opinion, you should have has one of your highest priorities to "in-source" your core competencies.
Therefore, the other required business support processes that are NOT part of your core competencies are the ones that you should "consider" for potential outsourcing.
If its cheaper than doing it yourself, maybe. The second component to consider is control. How much control do you need, or give-up by out-sourcing? Lead times, quality, etc. are some other variables to consider.
in my opinion, not before you have your business model nailed down, otherwise too many variables
Everyone that's posted has an opinion but most are in the outsourcing industry. Here's my opinion, no one is going to care about your business as much as you do whether you pay them or not. Furthermore in order to run your company you have to know how it runs, when you outsource you lose control of both. To do the best job of running your company you have to be the expert and that means getting the advice of experts, which can in many cases be had for free. Free consultations and or evaluations are still the rule rather than the exception. While it's true you may not be able or capable of doing everything yourself you should still be in control of everything. The most expensive cost in any start up attempt is failure and paying people who have their own best interests at heart to take care of your business is a sure path to failure. If you are going to outsource make sure what you're outsourcing isn't critical because if it is and it isn't done right you'll be the one who pays. Success is determined by hard work, dedication and determination. Those who want to succeed find a way, those who don't find an excuse!