If all the coding is being done by founders, things have a decent chance of working; if all the coding is being done by people hired by the founders, the odds are pretty slight; but if all of the coding is being done by people hired by a company hired by the founders -- i.e., by people two steps away -- there's almost no chance whatsoever that the coders will have either (a) sufficient motivation, or (b) understand the founders' vision. (Of course, the same thing works in the opposite direction -- if the founders are two steps away from the people writing the code, there's almost no chance that the founders are going to understand what's going on.)
And that's not even getting into the difficulties of working with people who have a different culture, a different language, and are working in a different timezone.
Out-sourcing development might save you money; but it's distinctly not going to get a startup up and running faster.
(Due disclosure :-> I am Indian and work out of Bangalore these days ( I worked in the USA for a couple of years) and have been on both sides of the outsourcing contact. It can work for certain big enterprise projects, but probably never for a startup. )
My 2 cents
Translations. We met a great guy in China via Elance for the Mandarin work. We've also worked with people in France.
Artwork. The new Webmin logo was done by a guy in Romania, I think. Met him on SitePoint via a logo contest.
I considered outsourcing some of the JavaScript work, since it's not our core competency (we build system administration tools in Perl/C/Java), but given that UI is so important I opted to learn JavaScript myself. Our first hire will probably be someone very strong on UI and web technology, though I'm getting pretty comfortable with it lately.
My previous company frequently outsourced, but never to China. I regularly hired my current co-founder (an Australian), and I worked with folks in Germany, Romania, Pakistan, Ukraine, Tunisia, and the US. Some experiences were positive, others were very negative. I wouldn't suggest outsourcing without some solid in-house expertise to judge the resulting code. I had a lot of trouble with really bad security practices in many outsourced projects. If I weren't a developer myself, I would have merely have had to trust that since it looked like it was working it actually was--when in the case of a couple of projects all of the "login" work was being done client-side. I even had a Firefox toolbar project come back with SQL being generated on the untrusted, unauthenticated, client-side in JavaScript (inserts, deletes, the whole shebang).
In short, if you aren't a developer, or don't have one on board, outsourcing is potentially rife with pain. That said, Digg and MySpace were developed by outsourced labor, and Mark Fletcher is a big fan of Elance. I dunno that any Chinese developers were involved, though.
You don't outsource your core competency.
making semiconductors is a ton of math, theory, and layout work. are you talking about actually using masks to do the doping?
also because semiconductor "startups" have higher capital costs than your typical software company.
Although there are some other incentives to outsourcing in China. I was told that in some major cities like Xian, the Chinese government is offering free office space and subsidizes the salary of each of your employees if an american startup or company decides to hire employees there. Xian has particularly good tech schools (they would be like the UW of China), but they have 50% white collar unemployment.
engineering school ranks: http://www.asu.edu/chinainitiatives/documents/unv_rank_eng.p...
(sorry can't find the link for the government program right now... that tip was given to me by a senior partner at a private equity firm... I'll try to find it guys. although, I would much rather recruit top grads from #1 universities than save a few thousand dollars a month by setting up operations in some average place with subsidies)
So I am definitely looking into China or India for my startup. But, I would not recommend going to China unless you or one of your co-founders speaks chinese. The major problems as other people have noted, are quality control and communication. Otherwise, your outsourcing has just about as much success as saying that you plan to move to Hawaii and live off the ocean by asking dolphins to fish and pick up sunken treasure for you.
I think a great startup idea would be to help American companies utilize idling chinese programmers by providing middle management, oversight, and translators (and job training + good pay for your Chinese employees).
I've met a couple guys our age in China (25-26) who have already sold their company for $20-30 million (US dollars) and walked away with $6-10 million. All they did was copy a popular idea in the US like Pandora or Last.FM, hire some cheapass programmers for $1k a month a pop, clone the idea completely, sell it to a larger company. These guys probably sat next to you in class at Berkeley or UCLA. I also know of a few US startups that already finished a Series A ($7 mil) and have a majority of employees outsourced to China. Solo founder.
more info if you guys want it
1 year will get you through every day life, but trying to communicate on a business level or even listen to the news on TV will be very difficult. It's possible to be fluent enough to do business in 2 years but you'll need to get a Chinese girlfriend. After 3-4 years you'll start to lose the "accent."
I would be really interested to hear more about these, please share.
But, I read below that you're doing a Rails idea.
It benefits you to outsource if you need a lot of C++ or Java work done cheaply. Examples of this would be if your idea requires multi-platform support or porting.
1) You're developing a game that would benefit from a wide array of desktop and hardware suppor (osx, windows, linux plus the different graphics cards and shaders languages and versions)
2) Or you needsoftware support for your new Dodgeball Cellphone app on a wide array of smartphones.
3) You need to port large existing codebase to another platform. Itunes from Mac to Windows.
4) You need a lot of artwork done to support conceptual artwork that you already have.
For a rails idea, since you're working at such a high level, you should be doing this work yourself or closely with another person that you have a good relationship with. It sounds more like you need a solid co-founder or you need to learn rails or django (it only takes a couple days to get started). Most of the time, we get stuck on little design decisions (what kind of validation should I do on my logins etc etc?). This is stuff you need to figure out yourself. It's hard to pay people to think for you.
Going to China pays big when you're looking for early stage employees or when you need to temporarily outsource a piece of your company (at 20% cost) that you see yourself replacing with a better solution later.
If you're prototyping ideas for YCombinator, and if you have a good idea, someone will join you as a partner.
Get up and running quickly by using a more productive language, not by someone else writing your crown jewels.
val = create_cat_res(create_res_val,ty,nm,pa,ow,tg,de,ic,f1,f2,f3,f4,f5,cty,oc,ors,rc,rr,c,r,u,d)We hire smart people with the understanding that they won't necessarily have been trained to do what we need. We give them challenging work and train them in the skills we want over time. Then get them to teach and train each other. This makes it difficult to grow rapidly (work outstripping staff) and requires tech-savvy management. If you can't communicate with your staff it is harder.
China is also a lot of fun. If anyone is considering coming here and wondering about the language, I'd recommend ChinesePod.com.
You may want to get a "virtual assistant" first to see how it goes. If you get burnt by that, you can cut your losses early. But chances are you will find a creative use for them that might give you a competitive edge.
Have you read "The 4-Hour Workweek"?
I am wary of outsourcing. I've done some work on RentACoder ... most of the people there want cheap work done for crap. I've picked up some projects where I ended up fixing mistakes from other people's code. They were candidates for a DailyWTF submission. Some of these people were from overseas, and some were from right here in the US.
However, outsourcing non-intellectual-property stuff like the virtual assistant or a bookkeeper -- that sounds like a great idea. You don't really want to be messing with non-code-related details while coding.
I can code everything my startup needs, but we don't have a good graphic designer. I suspect that we could go a long way with a few mockups from a great designer.
Of course, good designers tend to be expensive, and I suspect hiring a really good one would blow through a good chunk of my savings :[
It could work if your idea is good enough and simple enough, but it's rather unlikely. You need to create very, very specific documentation to get good results from outsourced Asian/Eastern European programmers. You also have almost no chance of getting funding from Y Combinator if you are not a hacker and have no hackers on your team.
The site consensus answer to your dilemna is to learn how to hack. Ruby or Python are the languages of choice here. Ruby has this nice learning IDE available, if you feel like playng around right now. http://hacketyhack.net/
There's some significant upfront investment though, just like hiring any key employee, and you can't hire someone the day after you realize you need the extra hands. Really doesn't work like that. Think long-term. Think partnership.
It's whole new challenge apart from your typical day job. Interesting one though.
If you prefer, what must be true about coding for that strategy to work? How do you know that programming for your startup qualifies? (If you don't know anything about programming ....)