I Was a Newbie to Project Outsourcing


I\’m a young entrepreneur. In this article I share the process I went through to turn one of my ideas into reality. To make it happen, I relied on outsourcing the creative and Web development aspects of the project.


To get a basic Web site up and running, usually, you register a domain name (example.com), hire freelance Web design and programming talent and pay a monthly hosting fee to an Internet service provider. Unless a content management system is included, you can expect to pay your Web people by the hour to make changes to your site. All of this can cost several thousand dollars upfront, not including the monthly hosting fee. The idea for my new business — called Posima.com — is to include all of the above for an affordable monthly fee ($35) so small businesses, sole proprietors and non-profits can get a professional looking Web site with minimal effort.


Once I had the idea, the next step was to turn my thoughts into a working product. I consider myself fairly Web savvy, but I\’m neither a programmer nor a designer. I had a few options. I could get venture capital and hire staff — an unlikely scenario given the competition of the second tech boom. I could gather a few ambitious people with the right skill sets to become co-founders with me. This option would lead to less profit for me and to having my idea molded by others. Battling between who was doing the most work or how much everyone should be compensated was also something I didn\’t want to deal with. I’d rather have full control over everything.


My final option — the one I went with — was to gather up my savings and hire people to do all the work I couldn’t. The benefits were that it cost less than hiring a full-time staff, I would have final approval over all aspects of development and I would own 100% of the final product. How could I go wrong?


Obtaining and Paying Contractors


I had heard of a site called RentACoder.com, which was essentially EBay for software buyers and sellers. There are thousands of coders worldwide who are available through this site. I created an account and placed phase 1 of my project online. Roughly 30 coders viewed my project and made bids from a few hundred dollars to several thousand. I picked several proposals that looked right and exchanged emails with each potential service provider. I wanted to make sure the coder had ability, knowledge of what I was trying to accomplish and a decent grasp of English.


Once I identified my Òknight in shining armorÓ — a programmer in the state of West Bengal, India — RentACoder did the rest. It provided the legal text about ownership of the software, and my money was put in escrow, which I could release in increments of my choosing. The site keeps track of how long the project is supposed to take and allows the buyer to cancel the project if it\’s not completed by the specified date. It also provides mediation and arbitration if either party feels he or she has received less than what was agreed upon. Coder and buyer are allowed to rate each other at the end of the transaction. RentACoder helped me tremendously in finding three of the four contractors I used for the project.


Aside from the main programmer, I also work with a contractor in Kiev, Ukraine and a 16-year-old IT/server guru in Vian, OK. I\’ve developed a strong relationship with all of them, which allows me to contact them outside the site if small changes or fixes are necessary on any of their scripts.


I also hired a Web designer in the UK, whom I found, frankly, by stumbling onto his Web site. The agreement I made with him was a bit more of a headache. We made informal agreements for the two projects he handled for me, one for the design of the site and control panel as well as a template my users would use for creating their sites. After a few weeks, we formed our own relationship, talking over instant messenger about details of the design. We agreed on a laptop computer as payment for one of his projects. I wanted him to be able to use the new computer to design the site. I considered him a trustworthy person, so I had no qualms about paying him early — convinced he would complete the project.


He received the laptop and was ecstatic. He worked diligently for a while — that is, until he got a job with a Web company that paid on a more consistent basis than his freelance business. He began only working on my project after getting home from work. As time passed, he spent less time each day on my design. His wife also became ill early on in her pregnancy with their second child. It then became weeks before he would spend as much as an hour on the site. While I believe that family comes first, the problem was that he had been paid in full, while I was waiting for my design so I could launch my site. A project that should have taken a month turned into six months.


The lesson here is never to pay a contractor more than 50% until all work is completed and tested. The value of payment diminishes once it enters the contractor\’s hands.


Should I have had a formal contract? My father, somebody conversant with the law, informed me that creating legal documents for small projects like these that cross borders is somewhat worthless. There are international courts, but he describes them as ÒinefficientÓ as well as being of astronomical costs. I believe the best way to protect yourself is simply by doling out payment to your contractors as they reach preset milestones — with an initial deposit upfront. I\’d also emphasize finding someone who has a quality list of references for a mini-background check. A site like RentACoder is optimal for these reasons.




I\’ve never met any of the individuals who have built my Web application. However, communication is fairly easy. After spending time as a cubicle monkey and working on this project, I can honestly say there\’s little difference in how people at a large company typically communicate vs. how I communicate with my contractors. We use the same tools, though it often takes longer to get a response due to differences in time zones.


The tools I use with my contractors are email, instant messenger, Basecamp, and Skype. The first two tools you should be familiar with, unless you were recently unfrozen by scientists. I\’ll run you through a quick crash course on the other two.


Basecamp is a simple collaboration and project management tool created by 37signals. The software is Web-based (just like mine), which means you can access all of your information and documents related to the projects from anywhere in the world. I found this handy for keeping in touch with all the contractors while I traveled in Japan and visited Munich for Oktoberfest. All you have to do is give your contractors access to their specific projects. They can update the information as often as they like and won\’t be able to see any of the other projects you may be working on with other contractors.


Skype is a tool that allows you to make phone calls through your computer. If you and the person you are trying to contact are both Skype members, you can talk for free as long as you\’d like. It doesn\’t matter if you\’re in a shack on the beach and the other person is in Timbuktu — as long as you both have high-speed Internet access.


I mainly use email and instant messenger. I can\’t help it; I grew up communicating using these tools with friends who lived down the street, so there was no learning curve. I use Basecamp to store all the information my contractors and I need. This includes documents that state the details of what was agreed upon originally, briefs stating how certain features should work, everybody\’s contact information (in case they need to ask one another questions), and a section just for me, where I brainstorm all possible new features or updates I may want to add in the future. The information is always online, so all participants can check in with Basecamp if they\’re not sure about how something was supposed to work or look before getting in touch with me.


If the other three tools aren\’t getting our messages across, we use Skype. Sometimes explaining something for a few minutes over the phone can prevent many torturous hours of text communication.


Time Management and Overcoming Obstacles


These two issues alone are probably the leading cause that outsourcing hasn\’t become mainstream. Not one of the projects I\’ve had my contractors work on in the last 14 months has been delivered on time. I can blame these delays on communication barriers, working with service providers who have day jobs, and because I made changes to the project during development.


Communication (or lack thereof) is something we all have to deal with. It\’s often a problem among people who work in the same building. So there\’s no reason to believe it won\’t be a problem between you and someone who speaks a native language other than your own. Many contractors freelance in addition to holding down a full-time job to bring in extra cash. I had a programmer leave on two separate Òthree-weekÓ occasions because his boss sent him on a business trip at the last minute.


Today, I\’d be cautious of hiring someone who has a regular job. That simple decision will prevent their putting your project on the back burner because they\’re overloaded at work.


Another bit of advice. You\’ll most likely be making changes to the project during development. For this reason, it\’s important to have extra cash on hand to give the contractor as a bonus for extra work you may find necessary. It\’s important to tell them upfront that you\’re giving them ÒxÓ amount of dollars more if they include ÒyÓ in the project. Also, when setting up your deadlines, build in buffer time. If you have six weeks to complete the project, ask them to complete it in four.


As the project goes along, speed bumps will show up on the road to progress. Solutions aren\’t impossible, but they sometimes delay work. For example, my host shut down my account because I was taking too much of the server\’s resources. My programmer was unable to complete his assignment because he couldn\’t access the server. I was forced to lease a dedicated server for him to complete his work. The host also took a solid week to get my new server up and running.


The Rest of the StoryÉ


My role in this process has been that of project manager, user interface consultant and quality assurance/tester. I knew what I wanted the software to do and set up small projects accordingly among my four contractors. Every day I would check my messages and IM with members of the team to see if any new code or designs needed to be tested or looked at. I would then make suggestions on what I wanted the final output to be. At times my contractors and I disagreed; but this was helpful because occasionally they came up with some great ideas on how something should work that I hadn\’t thought of. However, at the end of the day, I made all the final decisions on how I wanted the software to work.


The launch of Posima.com occurred on Dec. 13, 2005 on a whim. I had been delaying the launch date for over a month due to a few small bugs in the software. I eventually decided it would take a while for me to gain enough clients for these issues to even be a problem. (Of course, there are, no doubt, bugs I have no idea about that will only become apparent when a large group of people begin using the software.)


After a month in business, I have four clients and several others who are interested in using the software. I am still in constant communication with all of my contractors, continually working on bugs and updates that will make the software easier to use. I plan on Posima to be in continuous development with the help of the team that brought it to fruition.


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