Should you outsource?
I’ve gotten in the habit of paying freelancers to help me do things. While I would prefer not to spend the money, I figure that most talented founders could be commanding great consulting rates – so it seems silly to work on tasks that someone else could do for much less.
That being said, I’ve found it consistently difficult to muster up the courage to pay for things when there isn’t a lot of revenue coming in. While difficult, I think it’s necessary to pay freelancers to do some of our work in order to guard our time and rid ourselves of as much work as we possibly can.
I’ve spoken about the merits of outsourcing with a lot of friends. Many are excited about jumping on-board but don’t know where to start. So, I decided to write my ultimate guide to growing your startup with freelancers. Below, I go through the types of work I have been successful with outsourcing, the best place to find freelancers and give 9 lessons I’ve learned along the way.
The Types Of Work You Can Outsource
Before we get started, just to wet your appetite a little, I thought I’d share a few things freelancers have been helping me with lately.
- I recently wanted to convert a new WordPress blog design into a functional WordPress theme, so I found a developer in Greece and paid him $20 an hour for 8 hours of his time to code it up.
- I was afraid to publish blog posts on my personal blog before they were edited so I found a US based work from home mom to edit them at a rate of $10 an hour. She usually takes 30 minutes (or $5) to edit each post. She edited this one in 50 minutes! (Thanks Crystal!)
- I wanted to chat with people who have taken an online course, so I paid them $2 each to speak with them for 10 minutes! One simple request on Mechanical Turk had them calling me rather than the other way around!
- I had a request for 10 paintings to be stretched and framed for a bulk purchase on Art Sumo, so I found a laid off painting framer with 20 years of experience frame them all for for a whopping $100!
Where To Find Freelancers
I’ve found oDesk, Craigslist and Mechanical Turk to be the best places to find quality freelancers. I use oDesk for finding developers or virtual assistants, Mechanical Turk for doing market research and then I use Craigslist for everything else.
oDesk: oDesk is a goldmine for finding quality developers in hard-to-reach places. It provides a complete package: searching for freelancers, arranging contracts, interviewing them, and then tracking their time when they are working!
Craigslist: Craigslist can be amazing for finding people to do odd jobs in addition to freelancers. Two tips: some cities charge for placements, so just post jobs in the gigs section (which is free). And – if you’re ok with freelancers working from anywhere – be sure to add the freelance wanted post to other Craigslists located around the world. Canada in particular is a great place to find talent since the population is highly educated but there are fewer tech jobs in general.
Mechanical Turk: Mechanical Turk is a great tool to do customer research. While I initially assumed that the site was filled with Indians trying to make a buck, it turns out that the majority of workers are from a wide income range in the US. For specific details, I’d suggest checking out Customer dev labs’ overview of doing customer research via Mechanical Turk.
9 Practical Tips
I suggest you follow these nine practices when hiring freelancers:
1. Interview through sample projects
Finding freelancers can take a lot of time. Not only do you need to post the job and review each submission, but the back and forth required to vet candidates can be time consuming. I am therefore a fan of interviewing candidates through work samples which takes a maximum of an hour’s work to produce.
Interviewing a freelance writer? Have them write a 500 word blog post. Interviewing a front end developer? Have them code up a static HTML page from a PSD. Interviewing an editor? Send them a poorly written blog post and ask them to edit it.
While it’s possible that some candidates will refuse to do samples, I’ve found that this itself is a good test of the attitude that you’ll deal with over time. If the sample work took a lot of time, or I thought I might use it, I’ve paid candidates for interview samples. Even if it is $20 per sample, it’s probably money well spent since it can save you a significant amount of time in by glancing over samples, rather than spending hours interviewing all the various candidates.
2. Get developers from Eastern Europe
I have consistently found that the best developers come from Eastern Europe, and it’s best to work with individual developers rather than working with an organization.
I have found that organizations provide little additional value over direct contact with the developer. Further – they also introduce complexity and cost since they ask you to communicate with two people, rather than one. They also cost more than dealing with the developer directly since they include a management overhead.
I highly recommend searching for developers from Eastern Europe (Russia, Moldova, Ukraine, etc.) For some reason Eastern Europe seems to be full of developers with great attitudes who are meticulous about their work. One friend theorized that the old USSR used to have a great math education program and this has created a very logical culture in ex-soviet countries. Go figure!
Beware of firms from India who promise the moon and tell you they can get the work done very quickly. I have nothing against Indians, but it seems like the word got out in India that you can swindle lots of American companies by promising big and filling projects with people who barely code. Most of my friends who have outsourced development to India have seen their projects end in tears.
3. Outsource front-end but not back-end
Building software is fundamentally about communication. Communicating what to develop is pretty difficult and normally requires specifications, walkthroughs, lots of discussions and iterations until things are just right. Because of the communication cost, I have avoided outsourcing back-end work as the amount of communication required to get it right is usually very high.
I’ve found it much easier to outsource front end development work since the PSD provides a very clear picture of the expected end product.
4. Pay hourly but ballpark
Freelancers typically like to be paid by the hour since it provides assurances that if the scope changes, the freelancer will be fairly compensated. I therefore am fine with hourly rates, but am sure for each task which is assigned to the freelancer to ballpark the time allotted to it before any work is done.
Ball parking/estimating the time for each task is important since you’ll be the one paying for it if it goes overtime, but it also helps to clarify assumptions which may naturally be lost in communication.
5. Use tools to track time
Since I pay by the hour, I like to use all means to ensure that I am paying only for the work that’s being done. If the freelancer is on the clock, but they are playing Solitaire, I want to be sure I’m not paying for it.
This is why I require all freelancers working for me to track their desktop using freelancer time tracking tools which take screenshots of their desktop as they work. Luckily, oDesk provides this automatically.
I find that capturing a desktop results in every freelancer actually logging fewer hours than exist in any working day, since they don’t expect you to pay for hours they spend surfing the internet. It results in getting billed for just 4 hours out of an 8 hour work day.
6. Look to the Philippines, the US or Canada for assistants
I have had the best results working with Virtual Assistants who are located in the Philippines, the US, or in Canada.
Many Filipinos speak fluent English, have a great work ethic, are University educated and are looking for virtual work. Several have also told me that making $5/hr is a lucrative salary in the Philippines! This makes them ideal for the type of administrative work that I despise but is necessary like internet research and posting to social media sites.
For more involved work, I suggest hiring a VA located in North America. While their rate will be higher than those overseas, I find that work from home mothers or college students can provide reasonable rates and are very happy for the work.
7. Make your project stand out
oDesk and other outsourcing sites are filled with projects which sound scummy – projects like “Write a 100 page eBook from these 5 Wikipedia entries.” So I highly recommend that you make your project stand out by selling the perks of the position and the importance of the work.
Freelancers, like every other employee, want to work on interesting projects which actually are contributing to moving society forward. So if your project is interesting, please do sell it! You will get more applications overall and the ones that you do will tend to come from better quality candidates. If you sell it well enough, you might even get people who volunteer to work for you for free!
8. Be good to your people
While it’s just good karma to treat your employees well, there are other perks that come with keeping your people happy. Your people are more likely to do good work, charge lower rates and take your follow-up projects if they like you. Word gets out about how to treat your employees – especially when a rating system, like on oDesk, is in place.
To harness the relationship, I suggest investing the time to get to know the freelancer and their goals at the onset of the relationship. Be reasonable about expectations and if there is a way for you to give them work that will help with their goals, by all means do it.
9. Fire Fast:
Freelancers, like every employee, need to be set up for success and managed with clearly defined expectations and deadlines.
That said, I have found that if a freelancer misses a deadline or falls short of your expectations in an early task, it is usually an indicator that they’ll continue to be troubling to work with on down the line. Low performing employees can soak up a lot of your time when they miss deadlines and cause a lot of back and forth when details come out sub-par.
When somebody is consistently not performing to your level of expectations, it’s a good idea to let them go sooner rather than later.
If you can find the right people, I think you’ll be surprised at just how affordable it can be to have freelancers work for you. Heck, if you can hire the right people and create the right system – you REALLY can sit on a beach while you make money.
Personally, I’m just happy with freeing up some time to focus on other important things.
If you have any additional tips for working with freelancers, please do share them to the comments.