OutsourceSurvival.com

This article discusses the 4 different business models used by outsourcing companies. Each of these has distinct advantages and risks. Which one is right for your next project? Read on and find out!

This is the second article in a 2 part series. You can find Part 1. The ‘3 Flavours of Freelancers’ here. It discusses the features and risks associated with the different types of freelancer.

Part 2. The 4 Flavours of Outsource Service Providers

So much choice... Does it really matter?

This article discusses outsource companies, as opposed to individual freelancers. Hiring a company to do your work can offer some significant advantages over a freelancer, but it does come at a cost.

Outsource Service Providers- General Information

Before we dive into their respective models, here are some of the general pros and cons of using a service provider/company instead of a freelancer.

Pros

• May apply more rigorous development and project management systems to the work, lowering the risk of failure
• May be able to offer a range of professionals. Diversity of skills allows for multiple tasks to be carried out simultaneously
• Scalability, can often add more people or remove people at short notice
• May appoint project managers or project leads to manage the team for you. This gives you a single point of contact and a single point of accountability if something goes wrong
• Can ‘crank out’ large quantities of work in very short period of time. The easiest way to get bigger projects done FAST!
• In-house infrastructure such as hosting/development environments can reduce your costs in the short term

Cons

• Less visibility of work (you’re likely to have groups of people doing your work, without knowing who they are or their skill sets)
• A greater tendency to ‘black box’ work. That is, hide the work from you until it is ‘finished’ in their opinion, and then ambush you to signoff on the project on the due date
• Can have trouble with communicating requirements because of ‘Chinese whispers’. Often there is a single representative appointed to act as a go between, screening you from direct interaction with the people doing the work
• Some companies are skilled at extracting more money for less work. Particularly if they control development environments, you could find yourself held to ransom by an unscrupulous provider
• May get lower skilled labour assigned to your project, resulting in lower quality output (the classic bait and switch)
• Larger companies may be less committed to your success if they have a high volume of work. One bad review can be buried very quickly, and may be less expensive than fixing the project. Sucks if it’s your project they decide to cut their losses on
• Jack of all trades mentality. ‘We’re experts at everything’ attitude can result in generally poorer quality product, and many companies are reluctant to admit which areas they are stronger or weaker in

Where do they come from?

Online, Outsource Service Providers come from just about everywhere. Like freelancers, they tend to be predominately from developing nations; however unlike freelancers, a large proportion of providers have created ‘local’ presences particularly in the US and UK. There are also a lot of locally based companies that do the opposite to compete in this space. In addition to their local business operations, they create a business unit offshore and send work there to be completed at lower cost, whilst charging you a premium rate.

Below, we’ll discuss the 4 distinct models that I’ve come across are:

• Type 1: Standard Full Service Providers
• Type 2: Specialised Service Providers
• Type 3: White Label ‘Full Service’ Middlemen
• Type 4: White Label ‘Hands Off’ Middlemen Read the rest of this entry

This article discusses the different models used by outsource service providers and freelancers. We will talk about the different types, as well as the pro’s and con’s associated with each. These differences can have a major impact on the success of your project, and it’s important that you select the right one for the right situation.

This is part 1 of a 2 part series. You can find ‘Part 2. The 4 Flavours of Outsource Service Providers’ here.

Note: to my North American friends.. I apologis(z)e for the repeated spelling of flavoUr… I just can’t give that up to U

Part 1, The 3 Flavours of a Freelancer.

More flavours than you care to know about

If you jump onto one of the many outsourcing/freelance websites you could be forgiven for thinking that all outsourcer’s are the same. Sure, there’s an obvious difference between a solo ‘freelancer’ and a company; some have a logo and a website, some don’t. But there are differences that run deeper than that.

Why should you care?

As we’ll discuss, if you want a successful outcome on your project you need to understand who you’re hiring and how they work. This will affect the:

• quality of their work and what they can offer,
• work they can do well, and what they will likely do poorly,
• how they interact with you,
• price they are likely to demand,
• ‘value for money’ that they can offer.

As always, I’ll start with a list, and then describe each in detail. In my descriptions below, I’m talking from my personal experience, and I’m not dealing in absolutes. So you may find someone who has all of these qualities or they may have none. I’ve broken the article into 2 parts, as it was a little on the long side. So here’s the list:

Article Part 1. 3 Flavours of Freelance Providers:

• Type 1: Casual Freelancers
• Type 2: Sleepless Professionals
• Type 3: Fulltime Professionals Read the rest of this entry

This article discusses why startup business plans should be short and action oriented. It is mostly intended for new entrepreneurs wondering ‘what makes a good business plan?’

The Hockeystick. My favourite work of fiction.

There’s no such thing as a perfect business plan, but that’s ok. You’re not going to win or lose on the back of it. All you really need is to describe your situation and what you plan to do. The intention is to organise your thoughts, and make sure you’re clear about what you want. Many academics and business analysts will have you believe that your plan should be 100+ pages long, define multiple scenarios, provide detailed resource allocations, and include hundreds of statistics or fancy charts from authoritative sources. This is a colossal waste of time for most if not all small startups. If you don’t have teams to coordinate and millions to spend, you’ll be better served by a lean simple plan.

It’s a business fantasy

By its’ very nature a startup business plan is attempting to predict the future; and we all know the future is unpredictable. So whilst it feels reassuring to write an enormous plan, the first two things you should consider are:

• No matter how hard you work on it or how much time you spend, your plan is fictitious. It’s just the story you’ll tell yourself and others.
• It can never include all possible outcomes or details.
• It is neither right nor wrong. Don’t get fixated by striving to make your plan ‘right’. Likewise, don’t worry about things not going as predicted. Remember it’s just a story, it’s too early to know if it will work as planned. Read the rest of this entry

This article is for those who don’t have a technical bone in their body, and feel intimidated by the prospect of hiring some guy in India (or wherever)to do it for them. Aside from convincing you that ordering a website IS like ordering a hamburger, this article will give an outline on what you need to know to build your own website.

There is a common misconception that if you don’t know how to muck around with code, you don’t know enough to outsource the building of a website. Let’s just burst that bubble right now- it’s easy. Anyone can do it. Yep anyone, even if you’re still not sure what a blog is, and you think .NET is just a web address

A Website is like a Burger

mmm weburgerlicious...

Ok, here comes my food analogy… it’s late and I haven’t eaten dinner. Bear with me it should eventually make sense. The premise is that you don’t need to know how your favourite hamburger is made to order it or enjoy it. Likewise, you don’t need to know what’s in the guts of a website to have a freelancer build it. In fact, just like with food sometimes it’s nicer not to know. Blissful ignorance can be a powerful thing

However, just like buying a hamburger, it’s up to you to decide what fillings, buns, and sauce you want. Those decisions are your responsibility. There’s nothing worse then waiting for someone to order when they haven’t worked out what they want. They fumble around, change their mind, and keep everyone waiting. Often they’ll ask their friend or the person serving them ‘what should I get?’ Desperately seeking to dodge that tremendous commitment and get someone else to make the decision… then in the heat of the moment, they order something they didn’t really want. Don’t let this be you when it comes time to build your site. Read the rest of this entry

This article discusses how outsourcing can dramatically reduce the cost of launching your startup, sometimes by up to 90%.

So you’re thinking of starting a business. Chances are that you’ve got your business plan (even if that only means a few scribbled notes) and you want tp open your doors and start making money. Right now.

Visual representation of purchasing power

If you’re like me and 99% of entrepreneurs out there, the first thing on your mind is ‘how am I going to get this all done’… followed by a glance at your bank balance, and the thought that another $100k would be nice

But you don’t have it, and you don’t want to keep your day job and save for the next 10 years! So now it’s time to ‘bootstrap’ and cut some corners (Jules Edit: alternatively send your partner out to get a permanent job so she can support you and your business!) and see how far you can stretch your coin.  Cash is king as they say, and you need to preserve it. Read the rest of this entry

This article aims to save you time and improve your project success by discussing how to systematically select the best freelancer bids. It is part of a series of articles “How to Find a Great Freelancer Online”.

On any given project, you’re likely to receive somewhere between 10 and 50 bids if you post it to one of the larger recommended sites. As a general rule, the larger the project the more interest you’ll get. Bigger projects are far more lucrative, and occur less often in the marketplace, so freelancers tend to queue far and wide to try and win it.

Don’t bother talking to everyone…

If you don’t have a system for managing this deluge, it’s easy to get overwhelmed by the sheer volume of bids you receive. Reading them is hard enough… responding to them all… no way! Read the rest of this entry

There are literally hundreds of websites now where you can hire individual freelancers or contract to full service outsourcing companies. Your choice could make or break your project. So how do you find a good one?

This article is part of the series “How to Find a Great Freelancer Online”.

In this article we will discuss the best websites to find a high quality freelance or outsource service providers. These are the sites that I’ve used, or had personally recommended to me by other entrepreneurs. I consider these to be the market leaders for services, and I really don’t think there’s much need to look further. Just like I don’t really need more then 1 or 2 eBays… the same idea applies.

Without further ado, here are my top 4, in order of preference:

• www.rentacoder.com
• www.guru.com
• www.elance.com
• www.odesk.com

If you think I’ve missed an important one let me know and I’ll add it!

Want to blaze your own trail?

Suppose you don’t like the above four, what should you look for generally? These are the features you want as a minimum: Read the rest of this entry

In a recent post on  Entrepreneur’s Journey blog, Yaro has an interesting discussion on being a successful entrepreneur. To (crudely) summarise the post, his point is that to be happy and successful you need to have positive patterns of behaviour. Do what you know you should be doing, and positively reinforce that behaviour (think positively about the actions you’ve taken). Check out the link to read it in full.

I read this post and it struck a cord. This is a battle I am currently waging, and one that I am winning for the first time in my life. I used to believe that fixing my behaviour would make me more successful. However, I now believe that behaviour is a symptom, not a cause. If you are struggling to fix your behaviour, you are probably focusing on the symptom and aggravating the cause.

Ok, so what does this have to do with outsourcing?

Both a lot and nothing Like many entrepreneurs I have a… shall we say ‘peaky’ personality. I experience high-energy high-productivity highs, and low-energy, low-productivity lows. For the last 6 months I’ve taken the conscious effort to ’smooth’ this out, by being more disciplined in how I think about things; in particular problems and challenges. I’m not bi-polar, but I’ve discovered that I do have some thought processes that promote ineffective behaviour.

DISCLAIMER: I am not a fluffy-wuffy touchy-feely kinda guy.

I am a big fan on the power of being positive, but I’m not into new age fluff. However, I recognise that I struggle to sustain ‘positivity’ and am prone to fall off the wagon. As part of a long search for a solution, I picked up a book called Learned Optimism: How to Change Your Mind and Your Life written by a renowned psychologist Martin Seligman.

Without sounding like a vegetable-kissing-tree-hugging-hippy, this book has dramatically improved my life. It will help you understand your cognitive thought processes- it is not fluffy, and will not have you chanting-positivity or star jumping at dawn. It does give you a great set of tools to apply discipline to your thoughts. Read the rest of this entry

Welcome to Part II of how to use customer feedback to select a freelancer. This article covers how to analyse and vet customer comments, as well as how to do a simple web background check.

This article is part of a series on How to Select a Great Freelancer Online.

You can find Part 1 here.

Read the recent positive comments

Don’t just take an average rating as your guide, jump in and read customer comments. In particular, find jobs that sound like yours and see what customers had to say. Were they ecstatic or just so-so? Check the English quality in the posts, if you find recurring grammatical errors, or strangely recurring comments. Not everyone is an English major, but sometimes these little things can help you identify falsified comments, or at least suspect ones.

Customer’s Seem to Have a Positive Review Bias

Be aware that customers are often coerced, begged, cajoled by their freelancer to leave favourable comments. The freelancer may also try and use their personal relationship with the customer as leverage to ensure that ‘minor issues’ are left out of reviews. Some flippant examples…

“Look how hard we worked for you, it COST ME money to finish your work!”

“Hugh my friend, it has been an honour to work with you. I will leave excellent feedback for you. I would be privileged if you would do the same!

Why mention this? Are they bad people for trying to sway your grade? No… it’s just business. A bit of a gentle squeeze can add a few points to their average rating, and a few extra dollars in their pocket.

The point I want to make is that glossy reviews are more the norm than the exception. Average providers with charismatic ‘front men’ will have very similar high positive ratings, to technically excellent providers. You need to look very closely to see the difference.

An average quality freelancer will provide a worse experience then an excellent one; but they’ll do a better job convincing you that there were good reasons why you had trouble! The fact that there is a positive bias in customer reviews is another reason why outsourcers with bad ratings should generally be avoided. Read the rest of this entry

This post is the first of a series on How to Select a Great Freelancer Online. It specifically discusses how to use past customer feedback and work histories to ‘read between the lines’ and reveal a freelancer’s real performance. You can find the index for the series and the first article here.

Part 1 of How to use customer feedback/ratings covers:

• How to use the average feedback rating (or score) to weed out under-performers
• How to assess past work performance and determine a freelancer’s credibility
• How to avoid being Scammed

Part II of How to use customer feedback/ratings (find it here) covers:

• How to analyse customer comments, what they mean, and reading between the lines
• How to do a background check on your potential outsourcer

So, On With Part 1. Customer Feedback, Past History = Future Performance?

The only way to verify someone’s past performance and identity online is by reviewing their customer feedback and interaction within outsourcing websites. All freelance/online outsource sites have customer feedback because it’s extremely useful for filtering out the trash (scammers, fly-by-nighters, psychos etc.). When using feedback and ratings it’s essential to remember that it isn’t perfect. As any investor will sorely tell you, past history is no guarantee of future performance! Add to this the fact that feedback histories can be gamed/manipulated, you’re left with an information source which is only useful if it’s used with care.

How to analyse customer feedback:

All feedback is not created equal, some reviews should be given more weight then others, and there are hidden stories in the data. Here are a few things to look for to keep you safe. Read the rest of this entry