How Startups Outsource Their Tech Without Going Broke or Getting Screwed

A takedown of the traditional technical build proposal

Joe Procopio

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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 surprised, but not shocked, and a little mad at the tech firm, whom I did not know.

But ultimately, the fault was with the entrepreneur, in the sense that they asked for all the wrong things at the wrong time. When an entrepreneur has money, or access to it, or they believe they do, that problem can wind up hurting a lot of people, including the firm that agrees to build the tech.

Trap #2: Don’t spend all the money you DO have

Very few technical firms are sketchy, but most of them will build what you ask them to build. Most. Some are even altruistic. I’m reminded of a conversation I had with one of my tech-firm-founder friends:

“I won’t take $50,000 from a startup if that’s all they have,” she said. “Because I’ll end up building beautiful tech for them and it’ll just sit there and do nothing because they don’t have money to spend on sales, marketing…

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Joe Procopio

I'm a multi-exit, multi-failure entrepreneur. NLG pioneer. Building TeachingStartup.com & GROWERS. Write at Inc.com and BuiltIn.com. More at joeprocopio.com