How Startups Outsource Their Tech Without Going Broke or Getting Screwed

A takedown of the traditional technical build proposal

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.

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:

Trap #3: Don’t build everything at once

Most of the tech proposals I see are out-the-door pricing for the build of an entire product. Then usually the firm either walks away or tacks on a program to support exactly what they built.

Trap #4: Don’t look for a provider, look for a partner.

Now that you’ve got your design broken up and prioritized, this is a golden opportunity to vet whatever firm or individual is going to build your tech.

  • Do they get that you’re going to spend in small increments, go away and test, and then come back with changes?
  • Are they willing to take the risk of inconvenience to their billing cycle for the reward of your success?

Trap #5: Don’t go into the selection process uneducated

If you’re buying a new or used car, you don’t necessarily need to know mechanical and electrical engineering up and down. But you should know what undercoating is and whether or not you need it.

  • What a tech stack is and what some of the differences are from stack to stack.
  • The popular coding languages, databases, and backends and a little about why you’d choose what.
  • How security, privacy, and backups work.

Trap #6: Don’t pay by the hour

If you pay by the hour, you’ll always be questioning the firm’s methods, and whether you’re asking for something simple or complicated. You’ll subconsciously nickel-and-dime your product to death.

Trap #7: Protect yourself

I get this question a lot — How do you prevent the firm from taking your idea and your tech and doing it themselves. The answer is: You can’t.

I’m a multi-exit, multi-failure entrepreneur. Sold ExitEvent. Building TeachingStartup.com & GetSpiffy. Former Automated Insights. More info at joeprocopio.com

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