As I reported in April 2011 at the 4th anniversary of incorporating edocr.com, I discussed the importance of finding talent for us to move forward. When edocr.com was founded in 2007, we had a small team of four part-timers, all of whom were involved in running other businesses. As pressures on their businesses grew, they found it harder to commit to edocr.com. To overcome this, the product development was outsourced in Autumn 2008 and this arrangement came to an end in Summer 2010. In June 2011, after several disappointing attempts at finding local talent, we decided to setup a small product development team in Sri Lanka. On 16th June 2011, we employed our first software engineer in Sri Lanka, a new dawn for edocr.com.
Given above, this is, as a good time as any to take a snapshot of the past, as we have started a programme of improving the user experience of edocr.com over the coming weeks and months. The first chart shows monthly sign ups since the company was incorporated in April 2007. The dip in month 49 (April 2011) was due to the unavailability of hosting environment. The dip in month 39 and 40 was also related to the hosting environment. Our ability to return to normal service in month 39 was delayed by the ending of the outsourcing arrangement. Irrespective of these problems, the trend is positive, showing a gradual increase of monthly sign ups. Of course, it could be much better.
I like to use this opportunity to discuss our experience of outsourcing and why we decided to move away from it. When our initial team was under performing due to commitment elsewhere, we had a choice of either trying to build an in-house team or outsource. At the time, outsourcing model fitted our cash flow better than trying to build a team on equity and cash. As I was burnt before by outsourcing, we put several safe guards in place, some of these being:
1. Only pay upon delivery with no upfront fees.
2. Availability of a representative in the UK.
3. Must know clients of the outsourcing company.
4. Online tools for daily collaboration and progress monitoring.
5. Has experience of working with tech startups.
The start was very slow. It took nearly a month for the outsourcing company to familiarise as there were no documentation for them to follow, which was partially our fault. All payments were tied to clear milestones, which meant low risk for us. The UK representative was a trusted community member of Techcelerate. The outsourcing company was used by number of UK tech startups and an Internet Service Provider acquired by a telecom blue chip few years back. The UK representative also advised us on technology strategy, which was a bonus, e.g. choosing OAuth for our API before it was widely adopted. We used online tools heavily to collaborate. All in all, it felt right to team up with them in 2008 and the relationship blossomed in 2009.
By 2010, the UK representative has moved on to better things, and the service started to suffer. At the same time, the outsourcing company has grown rapidly, where we were too small for them in revenue terms. Staff allocated to us were diverted to other projects. Communication became near impossible. Junior staff started to estimate project costs, under which they struggled to deliver a quality outcome. No attention was given to impact of the overall product, and focus was diverted to simply executing the projects. There were enough evidence to suggest it was time to move on.
We were clearly in trouble by late summer of 2010. The last project on Analytics caused many problems to the performance of edocr.com, and continue to do so today. We brought analytics around the same time as our competition, if not slightly before them. We read the market well, but could not deliver a great product. Question on my mind was what can we do next? Outsource or find a technical co-founder, as by this time, I was not enjoying having to make technical decisions. I wanted to focus on commercialisation, moving away from technical decision making. Once again, we were in the same situation as in early 2008.
At this point, I decided to not pursue outsourcing again. Whilst I did not loose my shirt this time, the opportunity cost was huge. I spent the next few months trying to find a technical co-founder, which resulted in even further opportunity lost. We had very short honeymoons with two candidates.
In house team building
At no point it occurred to me to build an overseas team from scratch until mid March 2011. Whilst chatting with few Sri Lankan IT folks including a tech entrepreneur, I enquired casually about the possibility of setting up a small team in Sri Lanka. These conversations started to take shape resulting in advertising for our first employee in Sri Lanka. The process took nearly 3 months before signing up the first Sri Lankan employee in mid June 2011. What is hard to swallow is that we could have done this at the beginning of our journey and not 4 years after. For the first time, we now have an opportunity to build our product with love and care! Its no longer a project of someone else that we had no control over. Yes, it’s early days (ironically), but its a great feeling to be in charge of your own product, even though we have to live some of the technical decisions made four years ago for the time being.
So what now? We plan to review the complete product over coming weeks and months, improving one user experience at a time. There is no place better to start than sign up. Once again, we will start communicating with you through the blog and other channels at our disposal.
This section is for those tech entrepreneurs out there, looking for a technical co-founder to take your product forward. During my tenure with Techcelerate, I came across two types of tech startups, those with founders who can code, and others with no coding skills. The second type always suffers unless they are well capitalised. Latest advise is to learn to code, and I know few of none techie founders taking the trouble to learn. I have much better understanding of technology today than when we started, but I am still no coder other than been able to hack the odd HTML page.
But there is another solution. Can you setup a technical product team in a country like Sri Lanka, where there is a significant wage gap when compared with UK? Of course, this is easier if you are from the same country, but near impossible if you are not. But if you can crack this, then you have a chance to build a loyal and highly efficient team the way you want.
With all the lean startup methodologies coming out of Silicon Valley, and the low cost cloud computing and tools, it is much easier to build a tech product now than ever before. However, it is harder to learn and iterate your product, if you follow the outsourcing model. The problem with outsourcing model is that it is very hard to gain loyalty. Whatever the arrangement you have, unless you invest large capital, you will rarely be in control. As a startup, you need significant flexibility and ideally no constraints. In most cases, this can only be achieved by having your own team. So if all the doors have closed on you, do consider the possibility of setting up your own team, perhaps thousands of miles away from your base! At least, do consider this as an option!