10 Oct Successful Startups that were built with Outsourced Development
Outsourcing is a process by which companies and organizations assign their business activities to third-party vendors. Today, There are thousands of big and multinational chains and companies that opt to outsource to boost their company’s growth and optimize the operational cost. Following are the 5 success stories of companies that are engaged in outsourcing and achieved development in their early days.
Apple, the Cupertino giant and known for producing iOS devices, outsource most of its business functions to Chinese manufacturing firm Foxconn. It is evident that Apple cannot sell its products be it iPhone, iPad or other devices at an economical rate if they were not manufactured in China. China is known for providing skilled labor and has a cheaper market rate as compared to the US. Apple itself admitted that it is not an easy task to find skilled employees in the US and even the process takes months while in China the company can find professional employees in less than 15 days.
Alibaba.com is the biggest China’s e-commerce store which started as a small “internet company” called China Yellow Pages. Alibaba REcently acquired biggest Asian market, DarazToday Alibaba is the world’s biggest global e-market store.
Not everyone knows about the success story of Alibaba.com. The founder, JAck-ma revealed in a book that during the early days of the company it was hard to find skilled employees in China and talent was in limited supply. This made him contact the US firm and assigned the website to it. Back in those days, the US market had the talent Jack-Ma was looking for and hence he decided to outsource some of his e-commerce activities to the US. The company boosted its growth value in those days and grew by leaps and bounds success, Currently, the company still relies on outsourcing its manufacturing functions not only in China but in many other countries as well.
The search giant, Google though has its headquarter located in California is outsourcing its IT-related functions for many years. Whenever it comes to software developers, It experts and work related to Cloud and virtual reality, Google is a strong advocate of outsourced work to fulfill its IT-based projects. Google is mostly known for outsourcing phone product email support for one of its top product AdWords and has been successful to generate the biggest ROI out of it.
The next company comes in a line is WhatsApp. In 2012, The most popular messaging app has only 30 full-time and 5 part-time employees operating all the business activities of the app. But this could not stop it from becoming the worldwide favorite messaging app in just a few years after its release. It can be estimated from the fact that the app was downloaded over 50 million times in just 3 years after its launch. Then in 2014, just two years after launch, the company was sold to Facebook for $19 billion. The app today has around 1.5 billion active users.
When started, WhatsApp only had $250,000 seed funding, the company was in dire need to keep its operational cost down. To do so, the company decided to contact Eastern Europe in an effort to get the tech talent. WhatsApp hired multiple offshore developers from Russia because “there are excellent engineers there”, according to co-founder, Jan Koum. While, Most of the in-house employees were focused on customer support and operations, while IT development was handled offshore.
Slack which brings team communication and collaboration in one place has been designed by a designing firm MetaLab. The company was in its nascent stage when it contacted the MetaLab and assigned the redesigning functions of the app and website including logo design and graphics. MetaLab has designed numerous successful products over the years, including brand assets for Brit + Co, Medallia, Coinbase. Today, the Slack values $3 billion.
UpWork a network specializes in crowdsourced work. It was developed by numerous outsourced contractors. Not many of you know that the company is the product of a merger between the two largest freelancing platforms, ODesk and Elance. Stephane Kasriel, CEO of Upwork, told, 150 of the site’s 200 product and IT workers are freelance contractors and they are hired through the ODesk marketplace.
AppSumo, a daily deal site for software developed and founded by an intelligent entrepreneur T Sumo Noah. Interestingly, the website was started with an investment of only $50. Noah asked different successful engineers and entrepreneurs to help grow its websites. He placed job ads. He also found a developer willing to develop a PayPal button and credit card for in just $50. The concept was already there which helped him to convince the developer to work for him. Today, the startup developed from outsourcing is worth more than $2 million.
IBM is known for producing powerful processors and chips and generate most of the revenue through IT services and products. To make it a billion dollar company, the founders hired a great number of European employees and outsourced them IT based activities of the company. Even today, IBM hires IT developers and engineers to accomplish its business process. For this, IBM spends a huge amount of revenue to train outsources employees.
Skype, a popular video and voice calling app has gained remarkable success in its early days. Founded by Niklas Zennström and Dane Janus Friis, both wanted to create a channel that allows voice and video calling.They hired a large number of engineers and IT experts and assigned them the developmental work of the app and website which empowered video and audio calling. When Skype application was released, it took the world by storm and earned more than one million users just in few months. Skype is still a popular audio-video platform all over the world.
The famous web browser company outsource its development work to developers in other countries to boost its efficiency and make the platform up to date.
The above-mentioned startups all became success stories due to outsourced development. Besides these companies, there are thousands of other medium and small-sized enterprises which rely on outsourcing to increase the efficiency of their business and make them cost optimized. Other notable organizations which outsource their business activities are SeatGeek, Fab, Klout, Staff.com, AlterbBoot, MYSQL, Splunk, Piger, Axeda, and Solix are a name to few.