World-Renowned Brands Owe Their Success to Outsourcing: How Did They Do It?

Greater cost-efficiency, scalability, flexibility, and faster time to market are just some of the benefits we’re bombarded with whenever someone mentions outsourcing. So it shouldn’t come as a surprise that the outsourcing market reached a staggering value of $245.9 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.

Nevertheless, there’s still quite a large number of businesses that are not convinced that outsourcing is the right way to go.

And you know what - we agree, IT leaders are right to take it with a grain of salt.

As much as a quarter of all outsourcing partners break up in the first two years, and half survive only up to 5 years.

Like all relationships, the professional ones between the outsourcing parties are known to hit a few bumps in the road. But if handled the right way, these seemingly detrimental issues become minor hurdles that eventually lead to fruitful partnerships.

In fact, some of the biggest brands on the market built their stature and reputation because they decided to dip their toes in the outsourcing waters. 

First, let us tell you a bit about who they are, and then we’ll share a few tried and tested tips on how you too can face outsourcing challenges and possibly build global recognition.

8 Companies That Scaled Thanks to Outsourcing

The list of successful companies built on the backs of outsourced teams could be a lengthy one. But for this article, we’ve selected the crème de la crème to show just how big you can get with the right external team. 

1. GitHub

Today, we know GitHub as one of the essential platforms developers use to build, edit, and share their private code. However, its complete backend was built by an outsourced team. As it turns out, the founder had a good idea but required top-level Git expertise. Their budget wasn’t substantial enough to cover the costs of a full-time developer, so they hired one to work as a part-time backend consultant. He wrote Gist, GitHub’s sharing feature, and now this outside consultant is GitHub’s CIO. 

An excellent example of how a strategic approach to cost-savings can deliver a profitable outcome, wouldn’t you agree?  

2. Google

Google’s no stranger to outsourcing various internal projects to outside firms. This enables them to add new services to the roster more quickly and still leave enough room for their internal teams to focus on core business processes.

One of the first large projects of this kind was AdWords in 2011. Today, AdWords generates billions of dollars in revenue, proving that outsourcing doesn’t only bring cost-efficiency but can deliver a high return on investment. Then in 2014, they announced an official partnership with Globant, a technology service provider from Latin America, with whom they worked on Project Ara.

In 2018, the number of Google’s outside contractors officially surpassed the number of in-house employees. 

3. Slack

Slack is one of the most popular corporate communication tools today. It was founded by a company called Tiny Specks (now called Slack Technologies Inc.), but you probably didn’t know it was mainly built by MetaLab. This Canadian design outsourcing firm refined the app, logo, and website design - precisely what attracts millions of daily active users. 

Slack’s stellar success drove more work toward MetaLab that ended up signing outsourcing contracts with companies like Coinbase and Brit+Co. 

Slack is a great example of how outsourcing key dev and design processes in the earliest stages can set a solid ground for long-term success. Tiny Specks approached MetaLab with a prototype, and the 100% outsourced team turned the tool into a global success. 

4. Skype

Another world-renowned online communication tool - Skype, the OG video conferencing platform - was built thanks to remote experts. Though its founders were from Denmark and Sweden, the platform was actually developed by a now-famous Estonian team (Ahti Heinla, Priit Kasesalu, Jaan Tallinn, and Toivo Annus). They were the main ones responsible for the platform’s backend and, as you may have guessed, they eventually became the official partners - all thanks to the well-established outsourcing relationship.

5. WhatsApp

Allow us to add one more messaging and video chat platform to the list. With 2 billion active users around the globe, we can agree that WhatsApp is a no-small competitor. Facebook acquired it in 2014 for $19.6 billion, but how did it all start?

The founders of WhatsApp hired an iOS developer from Eastern Europe using a RentACoder platform for hiring freelance developers. They were the ones who put the app on the map, and as soon as they uploaded it to Google Play and App Store, it made SMS technology obsolete overnight. Ultimately, this offshore contractor became a full-time WhatsApp employee. 

6. App Sumo

App Sumo was founded by entrepreneur Noah Kagan and is today widely known as the go-to platform for the best daily deals on software, apps, eBooks, and courses. It is popular among startups and entrepreneurs interested in business, marketing, and tech. 

But it began as nothing more than a simple PayPal button and credit card form. App Sumo was supposed to be a side project, but Kagan eventually realized he had a strong concept. He decided to outsource the core development process and leave the technical stuff to the best people he could find. 

7. Basecamp

One of the most renowned project management tools for remote teams was built by - a remote team. The founders (37Signals web consulting agency) had an innovative idea but lacked the internal resources, so they decided to hire an external development team to facilitate platform growth. Today, Basecamp employs more than 50 people from all over the world. 

8. Alibaba

One of the world’s largest marketplaces was founded by Jack Ma, who outsourced development to the U.S. firm because China couldn’t fill the talent gap at the time. The outsourced team played a key role in platform development and made it possible for Alibaba to compete with other players in the market, like Amazon and eBay.   

But it wasn’t just about finding a specialized developer. Jack Ma explained that outsourcing helped Alibaba appeal to a bilingual audience - both Chinese and English speaking world. They expanded their user base globally, and thanks to the U.S. team, they aligned the product/market fit.

How to Join the Big League: 6 Outsourcing Challenges and Proven Solutions for Each

Want to see your name on a list like this one? Just know that it’s not as easy as it may seem, and every single outsourcing relationship hits a few bumps in the road.  While each situation is unique, one (or more) of the following 6 problems seem to put every outsourcing relationship to the test.  

1. Difficulty managing a remote team

With people working from multiple locations, overseeing their day-to-day progress is far more challenging, which leaves more room for misinterpretation and (unintentional) mistakes. 

• What you can do: First, define a communication style and the tools for getting in touch with the remote team when necessary. Then set up an appropriate meeting cadence, sprint reviews, and retrospectives to ensure the milestones are met within the expected time frame. To achieve this, appoint a project manager to dedicate part or all of their time to supervise the team. 

2. Cultural misalignment

The further you travel to find your partner, the more likely you’ll meet someone with completely opposing views and approaches to the project. However, that doesn’t mean you can’t get on the same track - you just need to communicate your perspective, ideas, and plans to confirm that all parties involved are working towards the same goals.

• What you can do: Look for a team with a similar working culture and provide clear instructions on what is expected of them. Then touch base once each milestone is achieved to see if they are on the right path or need more guidance. But be sure to keep the communication channels open and let them know they can speak freely, so they don’t hold back with questions or concerns.

3. Lack of personal bond 

When your colleagues are miles away, possibly in different time zones, getting to know the people you work with is a challenge - but it is still crucial. Successful long-term outsourcing partnerships are the ones where you build the same bond with the outsourcing team as with the internal one. 

• What you can do: Find a way to bring new people into the office for on-site onboarding. Not only will this get them up to speed faster, but they will also form a stronger bond with the in-house team. And don’t stop there - organize regular knowledge-sharing sessions, communicate regularly, and invite everyone to team-building events.

4. Lengthy onboarding 

If the onboarding practices and processes are ill-defined, the outsourcing team can take too long to get up to speed. Truth be told, transferring the knowledge your in-house peeps possess to outsourced allies can sometimes even take months. That’s not something you can afford, is it?

• What you can do: Define an onboarding process and prepare detailed materials to include everything about the company mission, vision, and objectives. Also, clearly state the tools and technology you plan on using, but leave room for the outsourcing team to weigh in with their suggestions on the best approach.

5. Undefined specifications

Some companies find it hard to set out project specifications upfront and thus worry they won’t be able to transfer their idea to the outsourced team. While the lack of details can create misunderstandings, it is not a deal breaker. 

• What you can do: Not every project plan should be set in stone from day one. It’s ok to leave room for adjustments and additions and take an agile approach. Who knows, an outsourcing team might have a few better suggestions that never even crossed your mind.

6. Complexity

Some companies fear that the project is too complex to outsource. Though greater complexity does come with greater difficulties, there are ways around it. 

• What you can do: If the external team still has difficulty learning your in-house ways, you can try working on a specific area. Once they get the hang of the simple things, move on to more complex matters. You can also set up regular code reviews and have a dedicated internal engineer provide feedback to identify errors and suggest improvements.

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Once you’re ready to seek the right outsourcing team, Nearup stands at your disposal to help you tailor your strategy and find the best developers to join you. We’ve established strong relationships with vetted professionals who can work with a rich tech stack, build solutions from the ground up, and facilitate long-term growth. 

Let us in on your idea so we can find the best talent that will turn it into a reality.  

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