Personal Offshoring

Slashdot had an post a few years ago about a developer who was able to get paid $67K for an assignment, in which he outsourced to India for $12K. This post caused a stir in India, who felt underpaid.

I just came back from the Shareware Industry Conference, where I met someone in the shareware business, who made millions ($3,000 to 6,000 a day) from his first product in the mid-90s selling for $10 – 15 dollars a simple program that changed two registry keys to make Internet browsers perform faster. He had only learned to use a computer a few years earlier. (Note: His sales rate grew from an original $300/day because of RealNetworks promotionin its website in exchange for a cut.)

This entrepreneur is not a developer, so he had to pay a student to develop the application. In later years, he hired developers from Russia and Israel to produce additional applications, since they were much cheaper than hiring one from the states. Having written earlier about outsourcing, I inquired about how he was able to find such developers, but he didn’t give any details.

Last week, Guardian Unlimited had an article on Swift and Offshore which describes how individuals can make cost and time savings by offshoring their own work. Examples include using RentACoder.com to hire a Belorussian developer to produce two-weeks worth of code for 200 pounds, or using templatekingdom.com to hire a Bangladesh developer to produce a website design for 30 pounds.

Comments

[Jose]

What about the concept of quality? I have heard contrasting views about the use of offshore coders; poor code, late, not to spec - these are just some of the problems when using outsourcing. The ability to manage these issues are significantly reduced when the coder is half way round the world and only available via email. Another example I heard was that a company would only use outsourcing if the individuals concerned would install some kind of big brother surviallance program so they they could monitor what they were doing!! Also what about protecting IP?

[Wesner Moise]

The issues of code quality and IP protection are known; that's why offshoring is used to develop fairly simple products.

[Chris Weed]

This is loosely related to your new post on "Personal Offshoring".

See http://www.37signals.com, and http://infoproc.blogspot.com/2005/07/instant-companies.html:

This excellent article (PDF) from Business2.0 discusses the drastically reduced barriers to entry for designing, manufacturing, marketing and distributing new products. The combination of Web collaboration platforms, outsourced design and outsourced manufacturing (typically in China) are changing the landscape dramatically.

A related phenomena is the "long tail" -- as you might expect, the distribution of market sizes in a product category is a power law, with a few big niches and lots of smaller ones. Now, with efficient search and distribution using the Web, small virtual companies can profitably attack the smaller niches. The winner, of course, is the consumer, who has greater and greater access to inexpensive and innovative goods.

[Jonas Antonsson]

I have quite a bit of "hands-on" experience with outsourcing and off shoring. In my view off shoring is a viable option for well defined and completely structured projects, big and small.

There is a catch however and it derives from a cultural difference. Western European and American culture (which is dominant where I am from) is totally different to Indian and Chinese culture. To begin with an Indian developer will never tell you that something can not be done - that something is not possible. He will state that "It is very difficult" but, in his culture such a statement is the equivalent of a strongly voiced "No - That can not be done".

So, the cultural difference is a huge barrier. Work ethic is another thing. I am not saying that Western European culture or work ethics are superior. I am just stating that there is a difference which creates a hump, at least initially. If you can settle those differences you might be on to something.

J#

[Abhishek Rungta]

Hello Sirs,

I just wanted to correct that TemplateKingdom.com is an India based company and not a Bangladesh based company.

I know it does not make a lot of difference when it comes to the context of this post. However it is important so that our customers who are researching on Template Kingdom are not misinformed.

Thank you.

Regards
Abhishek Rungta