> why the heck outsource to places like India
You vastly underestimate just how cheap outsourcing is
You vastly underestimate just how cheap outsourcing is
This is anecdotal but over and over again, this was the scenario:
1. local firm collects bids
2. As courtesy firm tells us we were 2-5x more expensive than winner, winner is in far east.
3. 1,2,3 years latter firm returns to us asking if we can re-submit but on a more shorter timeline (maybe the project would have been 2-3 engineers for 6 mo)
4. We come back with a new bid that is 8-12x more, has a bigger team than we would have used orgiinally, less favorable risk analysis..
5. They paid us to take them on! Often-times we had to throw away almost everything their Bangladesh contractors had been working on for years (fundamentally bad schema, no unit tests, bad bad code)...If engineers in India are, say, 5x cheaper fully-loaded than in the US; and some of them are awesome engineers; why are there not startups in the West competing to pay the rock-stars a Western salary but have them stay in India?
With all the close ties between the Indian IT sector and Silicon Valley I would expect it to be common practice especially among startups to try recruiting the best away from, say, InfoSys by simply paying them what you'd end up paying an inferior engineer locally.
As far as I can tell this is not done very often. Anybody know why? Or am I just not aware of it?
The hardest part would be to build a team of true startup hustlers, because the outsourcing industry has not been built around those types of people. Traditionally you have to have very strong top-down management and clear requirements since the mentality on the other end is to do what your told, avoid giving bad news, and maximize billable hours. This is something that large companies with established products can do a lot easier than startups.
In general the reduced execution risk is not worth the cost savings because you don't yet have a business, you are trying to build one. The safer bet for a startup very tight team working hand in glove where every employee is obsessed with the high-level product.
I've seen people who've got really cool sites to show that they've worked on in their spare time, or worked on with local collaborators.
Somehow, and it's hard to pinpoint how, when they try to work with someone in the West, it breaks down. Understandings that are natural to you sitting in one part of the world may have been completely missed by your remote guy in the East. Doesn't always happen, but it's enough to warrant a risk premium.
If you're paying them a Western salary, why not relocate them to be local? In my personal experience this is what I see happen when we do ID an engineer who isn't local but good
Doesn't that remove any kind of gain from outsourcing? What would be the point? You now have the downside of SV salaries and the downside of managing remote teams across the globe.
"With all the close ties between the Indian IT sector and Silicon Valley I would expect it to be common practice especially among startups to try recruiting the best away from, say, InfoSys by simply paying them what you'd end up paying an inferior engineer locally."
Usually those worth their salt aren't working for Infosys in the first place.
There's also control, if you outsource your whole project then why do your workers even need you? They could just do it themselves and cut you out completely.