How Startups Outsource Their Tech Without Going Broke or Getting Screwed

A takedown of the traditional technical build proposal

Should you spend $50,000 to build out your tech?

This is not as uncommon a question as you might think. As crazy as it sounds, quite a few entrepreneurs have access to that kind of money. Or at least they think they do.

What most entrepreneurs don’t have is a technical background. Thus, most entrepreneurs are forced to rely on someone else to build out their tech. Not only that, most entrepreneurs are forced to trust someone else to build out their tech without charging them a fortune for shoddy work and layers of unnecessary billable hours.

Here’s how to make sure that doesn’t happen to you.

Trap #1: Don’t spend money you don’t have

Believe me, I’ve seen dozens of different ways for a $50K tech spend to evolve from “crazy idea” to “just might work,” whether it’s with credit cards, loans, friends and family, or the old standard of giving away 10% of the company to get an MVP built.

In fact, a couple weeks ago, an entrepreneur asked me to review a proposal for $2.3 million worth of tech build — before the entrepreneur’s startup was even incorporated. I was…