Why You Should Consider Offshoring Your Development

Episode 23 Why You Should Consider Offshoring Your Development

For founders who are in the early stages of their product concepts, they should begin the process of determining how to make their solution real. If you are bootstrapping founder who does not have a technical resource in-house, developing your MVP can be cost-prohibitive if you choose to develop locally. Also, many non-technical founders, especially those who are part of under-represented groups or are immigrants may have great ideas but may not have the network and relationships to find a good technical cofounder.

Offshoring could be another option for you. Offshoring can help early-stage, nontechnical founders turn their ideas into tangible and commercially viable products at a very low cost, compressing their time to market and improving their chances of getting early-stage investing.

But this doesn’t come without risks. You are exposing some critical parts of your company to a third party – your tech infrastructure, and databases. How do you deal with the time differences and project delivery? What are the communication challenges when it comes to culture and language? What are the security risks that come into play? What are the ideal use cases for offshore development?

We spoke with Tauseef Riaz, CFA and CTO of ConsidraCare, and Cofounder of Mashkraft, a digital transformation offshore services company. He is a serial entrepreneur, who is also all too familiar with the benefits and challenges of offshoring. Tauseef helped break down the benefits and show how offshoring can reduce scaleup cash burns and lower the costs of any pivots around the business model or the tech stacks.

Transcript
Hessie Jones

Hi, everyone. Today on Tech Uncensored, we’re actually examining the option for early-stage founders to offshore their software development. So this applies if you are a bootstrapping founder who doesn’t have a technical resource in-house, but also if you’re an underrepresented founder or a new immigrant founder who may not have necessarily the network or the relationships to find a good technical co-founder. So here are some interesting stats about the industry. In 2022, the global software outsourcing revenue was about $116 billion. This is a growth of almost 6.3% from 2021. By 2030, the market is actually expected to reach almost $283 billion. This is absolutely massive. So let’s define this first offshore development. This is the process of actually developing software by utilizing service teams that are located in different countries. So this typically gives companies and founders access to lots of skilled labor. They reduce their cost, and they also optimize the time required to actually develop the software. What we’re seeing is that cloud computing has played a vital role in offshore software development, as well as offering companies the option for flexibility and much more scalability in their software. So, high cost is a primary factor in software development, and the cost of completing a project on site is approximately 60% higher than actually doing the same project in an offshore facility.

 

Hessie Jones

So deciding to offshore doesn’t come without risks. You continue to expose your tech to infrastructure sorry, expose your tech infrastructure, your databases, your confidential information to third party providers. There are time differences when it comes to this. You don’t have direct oversight on the project delivery. And there can also be communication challenges when it comes to culture and when it comes to the language. So I’m excited to welcome Tauseef Riaz, who is the co-founder of ConsidraCare. This is his own startup, but he is also very familiar with the benefits and challenges when it comes to offshoring software development. So we will discuss all of this with him. So welcome Tauseef!

 

Tauseef Riaz

Yeah, great to be on this call Hessie. Thanks for giving me the opportunity to talk about offshoring. Yes, very exciting.

Hessie Jones

Yes, it is exciting, and we’re going to make it exciting. You’re a software engineer, right? You’re also a serial entrepreneur, but you’ve offshored your development. So give me your perspective on the circumstances of which you decided to offshore.

Tauseef Riaz

Yeah, so I think it’s a bit of my background. So I’ve been building and launching startups, mostly under corporate umbrella, since 2010. I’ve also done it in many parts of the world. Right. So the art, the dark art that I practice and which is very common in Europe but not probably much in Canada and USA, is rapid venture development. So you have an idea, you’re pressed for time. You’re operating in a very competitive market, and you need access to funding fast. And as you know, you can walk around with a PowerPoint and a lot of great ideas, but unless you have a working product, people will not take you seriously. And there are other challenges with that which you explore further. So, for me, it has been actually an essential part of my offshoring has been an essential part of my venture building toolkit. Like you rightfully said yourself, there’s a lot of benefits to offshoring. It gives you speed. So instead of wasting months on trying to find a good co-founder, like, I’m an engineer by profession, but I’m not a practicing engineer, so I don’t consider myself like a technical co-founder.

Tauseef Riaz

So finding a technical co-founder or a team, hiring them, figuring out if the chemistry is there, it can take months, right? While your ideas percolate and somebody else kind of comes into the market with that. So when you offshore, it gives you speed, first of all. Right, so you can build something quickly. Maybe it’s not the perfect solution, but your idea certainly has mass. It has kind of a physical kind of aspect that you can test on the market. Right? So it’s much better than wireframes. We should have a working commercial MVP. You can test it on investors, and you can also then attract more co-founders, a technical co-founder. So this is basically what has driven it, mostly when you’re working for a corporate venture builder that I was there’s also, again, time pressure from the board. They want you to build a venture fast. They want you to keep the HR budget and the burn rate low. So I found out offshoring kind of helped with all of that.

Hessie Jones

Okay, let’s talk more about cost, because this is the major reason why. And you know how much it costs to hire a developer. I know Google developers that make over like $200,000-$300,000 a year. This is a very cost-effective option. So tell me more about that from the perspective of salary versus project costs, when you decide to outsource.

Tauseef Riaz

Yeah, no cost, for sure. I think if you look at Canada, the average developer salary, like for a junior developer, is around $50-$60 an hour. Right. And it’s going up. I was working in downtown Toronto for IRAP, and we were funding a lot of technology companies, and they were all struggling with both hiring developers and retaining them because we are in Canada. So one of the challenges that Canadian companies have is poaching. Right. So first of all, it takes you a while. You get a good developer, you pay them $200,000 and they’re headhunting companies who would reach out to them on LinkedIn and say, oh, we were representing a US. Company. Right. And they are going to pay you $250,000. Because for American companies, it’s a bargain. Getting a developer in Toronto versus San Francisco, say, even if you have the money to hire a developer, there’s no guarantee they’re going to stay with you. Right. So the offshoring model, first of all, you save costs, right? You are almost 50% off the bat if you negotiate your contract properly, both in terms of developing your product and also for maintaining it, right?

Tauseef Riaz

The second thing is you’re also offshoring the headache. You’re offshoring the headache of hiring talent because that’s what they will do. You’re offshoring the headache of churn because a developer churn happens all over the world. You’re offshoring the headache of finding cultural compatibility with somebody, right? So all of these things are not maybe that relevant in the beginning when you’re building your ventures down the road. Obviously for many companies, offshoring is not a good solution. You want to build a good team. You want to have your technology exports close to you, you want to have a company culture and so on and so forth. But in the beginning, especially for me, I must have built like 12-15 ventures in my lifetime. That whole headache just disappears. It gets replaced with other headaches and we’ll talk about it. But this is the main benefit. So cost, for sure, you can, for a few thousand dollars, $10,000, get an MVP off the ground, right? So that’s like a rule of thumb I’ll use. You can negotiate it to around $10,000 for a fairly robust platform business automation venture or an e-commerce venture or a fintech venture, and then you can have two, three, $4,000 a month the cost of maintaining it, right?

Tauseef Riaz

And we’re talking about Canadian dollars here, by the way. So that’s just off the bat and it’s accessible to most founders who are non-technical. They can pull together this much money and take that risk. If you hire a developer, then it’s a long-term commitment and the cost is higher.

Hessie Jones

Well, let’s look at this from when we say cost perspective, because you’re hiring, let’s say assuming at 60% less than what you do locally, you actually increase your pool of talent and so you’re able to hire for more than just one specific individual resource. You can hire for teams. Tell us more about that.

Tauseef Riaz

Yeah, so I think that’s the other there are two models, by the way, in offshoring. So there are offshoring companies which are more actually suitable for mid to large sized telecom technology companies, which is like they are a staffing solution, right? So they’ll say, okay, we’ll build you a team. You say, Look, I need like a quality assurance person, I need three developers and I need like an AI expert. And they’ll find it, they’ll put the team in there and they’ll manage it for you. But now you’ve actually built a team there. The other is the turnkey model, which is very suitable for early stage companies. So they just work towards the solution. You say, Look, I’m working on this idea. I want to build a fintech platform that tokenizes real estate investments, right? And you go to them and they say, fine, don’t worry about it. Of course you need to figure out that they’re assigning the right resources to you, but they’ll assign a team that can almost be a black box to you. So you deal with one or two people who take all the requirements from you. They communicate with you, the progress of the project, if the issues they’re facing and all of that.

Tauseef Riaz

But behind them, they’ll build a team. And that’s one reason why the cost is so low, because they can even be sharing resources in the back end, right? So a UX/UI developer might be working in an offshore studio on three projects. So you save the cost because it’s not a full-time hire for you. You are only paying for 30% of them. In the beginning, I think some companies do prefer, we’ve noticed, like after seed stage, they’ll probably want to have their own team in place, and that option is always available with most offshore studios. But in the beginning, it’s almost like a black box. Like I mentioned, you give them your requirements, they come back with timelines and the cost, and then you just need to stay on top of it, which we will talk about a bit also.

Hessie Jones

Okay, so we’ll get into the risks after, but I think just to kind of create, I guess, the atmosphere for what kind of risk we’re talking about. Give me an experience that you’ve encountered. I wouldn’t actually call it a horror story, but maybe a negative experience that you’ve had within this space that we could kind of reference.

Tauseef Riaz

Yeah, just to kind of set some context for that. Also, like, offshoring is not a Pennish Air, right? So it’s suitable for certain people and certain stages, right? So it’s not a solution. And like anything else, when you’re offshoring, you have to manage it properly. And I’ve learned it the hard way. Right, so like I said, I’ve been doing it since late 2009, and most of the mistakes I made were in the early days because I just thought you give somebody a requirement and they’ll come back and build the product for you. So one of the earliest bigger mistakes, which were also affected my career a bit, was when I was in Indonesia, I was the Chief Digital Officer of a large telecom player there, and we decided to build a food commerce platform, right? So we went to our board and they gave us and we pitched to them, okay, we can get it up and running in three months. My own team was quite small at that time, so we did not have in-house resources who can build it. So we said, fine, we’ll just go with a large, well-established offshoring hub in another country, which we actually had some previous relationships with.

Tauseef Riaz

And it turned out to be a disaster because it was a big company, they were used to doing big enterprise-type projects. We were trying to build a startup, so they gave us an over-engineered solution, which kind of ran off its budget and was not really useful, right, because they didn’t even go through like a proper startup agile cycle to build it. And I think if there was a lesson I learned was you need to match your offshoring studio to your company size also, right? If you’re offshoring to a large studio, then basically you are too small for them. You won’t get especially if you’re a new first-time founder, you’re not really familiar with technology. You need a bit of handholding. You’re not looking for developers, you’re looking for also almost like a co-founder. So boutique and smaller offshore studios, which I learned later, we then kind of re-offshored to Singapore, to a small company, five, six people, and they almost became our co-founder, right? So it was almost like they were providing we were paying them for software development, but they were also giving us guidance based on their experience.

Tauseef Riaz

So that’s I think the horror story is like, there are many things you need to look at when you’re offshoring, but size matters also. If you’re a big startup, go for a big offshore studio. If you’re a small startup, you probably want to go with a small offshore studio because they’re eager to get your business and they know they’ll grow with you, so they’ll throw in more value for you also.

Hessie Jones

Okay, so let’s go more into the roles. From a Canadian perspective. I guess from a politics perspective, you’d want to hire locally. That’s the American premise, right? America. Same thing with Canada. But you argue that this is not necessarily a long-term thing, that this is the difference between what you term a commodity task versus high-value task. Let’s go into that.

Tauseef Riaz

So offshoring. Ultimately, if you’re successful, it’s through onshoring, right? Offshoring is not like a little niche thing that only small startups do, right? Like many large companies, when they were startups, they went with offshoring. So Alibaba, like the Chinese giant, like they were in China, where you can offshore software development. They offshore to Russia, right? Skype offshored base camp. And they were a small startup. They offshored. GitHub offshored to an Eastern European company. Right? And if you look at them, how many jobs have they created in the USA? Like thousands afterwards, right? So a little bit of offshoring in the beginning just to get the ball rolling and then when they got the investment, it got onshored right. So that’s one thing that from a political perspective, the most important thing is to get the ball rolling, right? It’s not about job creation in the beginning, it’s about getting a product out there and getting because as Mike Tyson says, “everybody’s got a plan till they get hit in the face”, right? When the product leaves your kind of head and turns into like a portal or a website or an app, it’s probably going to fail.

Tauseef Riaz

So you want to minimize your cost, first iteration. That’s why you should offshoring, right? But ultimately it will create onshoring. The other thing is how you offshore. So generally, it just makes sense to offshore low-value stuff, right? UX/UI design, website design coding is actually commodity thing, right? You’re not building skills in Canada if you’re teaching people to code. But as your company grows, and if you need more value adding people like AI experts, machine learning experts, blockchain experts, that’s where you hire locally, right? So even if you’re a large company, and many companies do that in Canada, right? So they will keep the high value jobs in Canada, right? So they’re high value jobs, they’re not only helping the economy, they’re also elevating the skill level of the population, right? And they will offshore commodity jobs to other countries, right? So whether it’s web development and web maintenance, things like that, there are other things, like if you’re doing a Pivot, you want to do like a test, you can offshore it without distracting your core team, right? If you want to do a technology stack migration, it’s like a very difficult thing.

Tauseef Riaz

You can find offshoring companies who can do it for you. They can create a parallel stack for you. Let’s say you’re on code igniter. You want to move to Laravel nine. They’ll do the Laravel Nine stuff for you while you keep running your old stack business. So all of these things justify offshoring and ultimately it will benefit the economy, right? It will create, if you’re successful, more onshore jobs. Obviously, you’re generating your revenue in Canada, you’re paying taxes in Canada. All those benefits kick in. But even myself, because you also own an offshore studio. Full disclosure, I would always argue with startups who are offshoring to us keep your high-value jobs with you. Don’t expect us to find machine learning and AI experts. You need to keep them close to you. That’s your intellectual property. That’s the skill that your country is probably better at. Like, Canada is really good at AI, machine learning, mechatronic, robotics experts. So you don’t need to offshore that. And even if you offshore that, A – you won’t find good resources. B – they will be very expensive, almost as expensive as here. So it’s more about the commodity stuff, the MVP, the wireframing, the web portals, like the apps. That’s what you offshore.

Hessie Jones

As you know, data has a huge value today. And in many cases, even when you’re doing development, you’re going to require that the third party is going to see some of your IP, some of your exposure to your database and Computer Weekly, here’s a stat that I found. They posted an article about bad outsourcing decisions that made up about 63% of data breaches, right? So when you do this, there’s a huge trust factor. But as you claim, there are many other things that you need to consider due diligence, et cetera, to be able to make sure that you’re offshoring to the right.

Tauseef Riaz

So that’s a real risk, right? That’s a real risk here also in Canada, but it’s a bigger risk when you offshore to other countries that your contractors, your developers, can walk away with your intellectual property, right? It happened to Tesla Elon Musk in the beginning, right, so that’s a real risk. The important thing is and then it all comes down to due diligence. And this is where you say offshoring is not, like I said, a panachia, right? You need to think that through. You need to have the right approach to it. So what you shouldn’t be doing, for example, going with freelancers. So the biggest risk is usually with freelancers because there are individuals who have access to a lot of private information. They’re not only having access to your intellectual property, they might have access to your company users personal data. If you’re a health company, they might at some stage get access to it. They might have access to their credit card information because they’re doing Stripe or PayPal integration. Who knows, right? So the trick is to find a reputable company, right? So it has to be a corporation. They have to be a legal entity.

Tauseef Riaz

It cannot be a group of freelancers. There are a lot of people who kind of make these kind of virtual teams on freelancing companies. I personally think it’s always a risk, right, so they’ll have one person pushing a team, but they’re not a corporation in their own country, right? They don’t have a legal entity that can be held ultimately accountable. That’s one thing. Second thing is always ask for references, right? So never be a first customer for a company. That’s the thing, right? So you need to make sure that they are reputable and they give you some references in your part of the world. If you are a North American company, ask for North American references. If you’re a European company, ask for European references, right? Because at least you can get that comfort that there are other companies who had worked with them and did not kind of run into this process. Third, you have to ask them about their own security policies, right? So when I offshore, for example, we put it down in writing, like the intellectual property is ours, for example. But the other thing is limited access, right? So you don’t give all the developers access to critical resources such as your AWS, right?

Tauseef Riaz

So many companies will actually, in some companies, for example, what might happen is, like the CEO, he says, okay, I will only have access to the AWS and let’s say court media or Stripe integration, they will not give it. So the CEO will personally take the responsibility for that, right? So these are things you have to go through your due diligence checklist. Like, first of all, do you have a security policy? Do you have firewalls? How long have your developers been with you that you’re putting on this project? Are they trustworthy? And then who will have access to the production kind of version of the platform? So sometimes what companies do is and this is a bit of technical knowledge that you need to kind of learn, right? So you have a developer server and a production server. So you always say, okay, do all the development on the development server, but only one or two team members would have access to the production server. So you need to make sure also, look, I mean, if you don’t put locks on your doors, even Canada, there’ll be theft, right? So that’s something that you need to make sure the process is in place, the policies are in place, and they are a reputable company.

Tauseef Riaz

They are a legal entity, not a group of individuals or freelancers. And also you get references like, they have worked for large companies, so they understand Western companies, so they understand what intellectual property and those things can mean. Right? And again, usually the mid-sized companies are best positioned for that because large companies usually get more problems. If they’re large, they might think, hey, you’ve got a good idea? I want to launch this in India or Pakistan or Estonia myself. So because we have the funding. So I think you need to kind of stay in that space. But generally for most companies, offshoring companies, reputation does matter. Like, most of them rely on word of mouth. So you might find out that most of them, especially like the legal entities, are more professional than you’d expect them to be, right? Just based on reputation for the region they are in. Okay. Yeah.

Hessie Jones

Okay. So talk to me about, I guess, one of the biggest barriers, and maybe this is a misperception about offshoring is are the cultural differences, the language barriers, I guess, also time, because you are working with third-party providers in a different time zone. So talk to me about this. And are these real risks that we’re seeing here, or are they just myths?

Tauseef Riaz

So they are real risks, but they’re all manageable risks also. Right. So I think let’s kind of tackle it one by one. So take the communication, for example. So in most of the countries that you offshore to, right, it will be Southeast Asia, south Asia or Eastern Europe. Right? That’s where the big kind of offshoring hubs are if you offshore to a reputable and people there don’t speak English. Right. So I think it’s a given in many of those or as fluently as you would expect them to be. So what offshoring companies should do, and you should make sure that they’re doing, is they’ll give you a liaison who is fluent in your language. If you are from French part of the world, they’ll have a French liaison. If you’re from Middle East, they’ll give you an Arabic speaking liaison. If you’re from the Americas, from Western Europe, they’ll give you an American-English speaking liaison, so they become a buffer between you and the team there. And they become two types of buffers, right. Language buffers, but also cultural buffers. Because, yes, it’s very difficult. The cultural differences can be very different. They might have holidays on a different day, right?

Tauseef Riaz

So this morning, like our own team, they’re saying they’re off on Monday because of May Day. Like, we’re not celebrating May Day and we’re saying in a panic, like, okay, you don’t have developers there on May Day, but we need to do some work. Right. But they did, to be fair to them, they told us, like, one week before, right? But there’s a buffer in there. There’s a person who I can communicate with and who I would have access to holidays and things like that. Right? So that’s the company’s responsibility. You just want to make sure they’re not putting you directly in charge of the developers. Right. There’ll be a liaison. That liaison will become a buffer both for the language and for the cultural things, right? Because miscommunication is also an issue and how you approach people in some countries, you need to be more authoritative. You cannot be nice and friendly, you cannot use first names. So all of those things that person will take care of, right? The second thing, the third thing, rather, that you talked about is the time difference, right? And there most companies will actually match their development cycle to meet yours.

Tauseef Riaz

So that’s usually not an issue. If they have, let’s say a company has a lot of clients in North America, they’ll work at night. So there they’ll kind of adapt your cycle to yours or they’ll make sure at least there’s a four to six hour lap. And it is important. Again, as an offshore, you have to ask for it because you need to stay on top of what’s going on there, as is here, right? Good managers are detail-oriented and they stay on top of what’s going on. You cannot just delegate everything to them. It will surely get off the track. Right. So you have to make sure you have daily calls, ideally, or at least three times a week with them, just like your standups. Where are you with the project? What are you going to do next week? What happened last week? Give me something that you built so I can start testing. Right. And for that, obviously, time differences become important, but that’s their job. You have to tell them, look, best time for me to talk to you is or my team to talk to you is in the morning, they’ll change their cycle.

Tauseef Riaz

They’ll put their developers on that shift. So if I was to say the most important one is usually the language one, and that’s the biggest risk. And for that, definitely, you need to make sure they have an English-speaking liaison. But the cultural ones and the time ones, this is a mature industry. You go with a company that has been around for 510 years, they can handle it. If it’s a new startup, offshore company, then you’re taking a big risk. Right?

Hessie Jones

Okay. The next risk is really about service delivery. And there have been, I think, in a lot of cases, and this is something you can’t necessarily control because I’ve dealt with freelancers or offshoring companies as well. And there are times when they will subcontract the work. From that perspective, control is almost out of your hands and that will impact quality, that will impact time and all that stuff. Can you tell me a little bit more about that from your perspective?

Tauseef Riaz

Yeah. So, QA quality assurance, if you were to ask me what has been the thing that has constantly pained me, even with my own developers that I hired offshore and managed directly, is QA. So quality is something, it doesn’t necessarily mean that they are bad developers or they don’t have the technical skills. It’s usually, again, a communication barrier, right? So the subcontract risk, I think I wouldn’t go with any offshoring studio. And you have to again, ask them upfront who do not have their own employees working on it. They can hire employees for short-term. And it happens a lot. Like employees go main churn, they let them go, but they have to be on their payroll. They cannot subcontract to another company. Right? So the moment you do it like you’ve got these two degrees of separation with them, it’s going to become more difficult, right? And again, if you go through freelancers, if you go through these kinds of virtual teams online, you can run into this problem. But if you’re going with a company, like I said, which is established company, they can share their financials with you, they can share their experiences with you, they can give you references, you won’t run into this problem.

Tauseef Riaz

But QA is important. And that’s where the thing that you have to do as a non technical co-founder who decided to offshore, you have to become the head QA yourself. Right? So you need to make sure that as they are building, you are testing. And that’s basically the time that that’s the effort you will need. That’s basically, I think the extra work you have to do in turn for offshoring, you need to stop. So there are two things. First of all, anyway, any professional company will give you all the specs up front. So upfront you have to agree on the goals and what the deliverables are and what are the timelines, right? So you need to make sure, even before you start paying them and they start developing on it, that you’re 100% aligned with them on the outcomes. Now, usually for non-technical, first-time founders, it might be a challenge. They might not know themselves what they want, but that’s still a good strategy. At least get some sort of clarity. Ask them to give you some mockups talk about a few customer journeys with them so they’re aligned. Then you have to make sure, like I said, daily, if not daily, possible at least one or two times a week, you review the work they’re doing.

Tauseef Riaz

Right. Maybe not from a technical perspective. Don’t do a code review if you’re not a developer, but you need to make sure that the things are being delivered as you expected them to. It has two benefits. One, you can catch any mistake or divergence while it’s happening. And second is sometimes you have an idea in your head, they start developing it. And you realize once they kind of start putting the screens and pop-ups or apps or kind of analysis or whatever that your app or startup wants to do that it’s not exactly what you thought it would turn out to be. And you can change it early. Again, I said communication. I would say the biggest challenge is actually not communication, it’s quality assurance. And the best way and the only way to mitigate it is if you have to stay on top of it. If it’s you too shy, you cannot make the time for it and you’re not interested in it, then you shouldn’t be offshoring. Right. You have to be a bit of a product manager and a lot of quality assurance manager when you’re offshoring. Right?

Hessie Jones

Yeah. And I think that plays a lot more, especially when you’re non-technical. The way to make sure of it is make sure the product works on your end.

Tauseef Riaz

Like, I’m almost kind of restating, I would say the obvious so I used to do M&A. We hire McKinsey and Bain and BCG, like the top consulting companies, for due diligence. If you’re not staying on top of them, they’ll go off track. Also, you might end up so I think it’s generally a good principle as a founder, right? Founders are not all about pitching and posting on social media. You need to be detail-oriented and you need to be a good people manager. Right. Otherwise, you’re just a fundraiser. So I think if you’re offshoring or if you have developers here and you want to be a good manager, a good founder who’s delivering a good product, you need to learn these skills, like whether you’re managing offshoring. And most important thing is attention to detail and staying on top of what’s going on, right?

Hessie Jones

Absolutely. Jack of all trades, master of none, right?

Tauseef Riaz

None. Exactly.

Hessie Jones

Okay, so let’s do a recap. So from your perspective, you’ve laid out a lot of things here from a best practices perspective. Let’s recap some of the main things that founders should think about when they’re actually offshoring.

Tauseef Riaz

Yeah. So the first thing is you need to ask yourself, like, is offshoring the right thing for you? Right. And we didn’t touch upon it too much. But who is offshoring good for non-technical co-founders? But especially in Canada, if you’re an immigrant founder, or if you’re from an underrepresented segment, right? Or if you are from a small city, you will not have access to the technology resources of big city, or your network might not be good enough, or people might just not know you like you just got off the plane. Like, who wants to be your co-founder? For them, offshoring can be an ideal thing, right? Or if you have a simple idea, or if you’re pressed for time, right, and you have some funding, so it will still cost a few thousand dollars. So I think that’s basically you are in that sweet spot if you hit those tick boxes. Second, when you’re offshoring, do due diligence, right? It might take less time than hiring a resource, but you still have to reach out to people. Best way is LinkedIn, actually. Or going into your own network, or coming to Altitude Accelerator or some other accelerator, asking other founders, you’ll be surprised.

Tauseef Riaz

There are more companies that are offshoring than they’ll admit it. So if you start asking people, 50, 60% of the companies, early stage companies, I will bet you in GTA are offshoring. So then they can recommend you. Some companies. So don’t kind of bid for projects on upwork or kind of just do cold calling, Google search, right? Ask people and then do your due diligence. Ask the offshoring studio what their experience is, how many people they have. Ask them to give some references and talk to them. And most importantly, ask them what the process is. Would they dedicate like a resource to you? Who will take care of all the cultural language issues? Ask them to provide, they won’t charge you for it. Like a proposal, a detailed proposal, what the outcome is going to look like. Ask them what the cadence is, what do they expect from you, right? Because if you don’t, they have their requirements also to deliver a good thing. So all of those things need to be kept in your mind. And last thing, like I said, again and again, keep on top of what they’re building because it can get off budget, it can get off track, and it might be something you didn’t want, right?

Tauseef Riaz

So these are the things, but it’s just good management practices. If you follow it, it might be the best option for you. And we have many companies, like I’ll use the name first, car Group was a German company that used our offshore studio as a startup. Then they become a multinational company. They had branches in Africa and in Europe and they then exited a few hundred million dollars and they used us for most of their development, right? So these offshore studios can also become your partners, right? If you manage them properly and if you’ve done your due diligence properly.

Hessie Jones

Okay, awesome. This has been excellent. And I can tell you I’ve learned more today than I have in like ten years working for AI companies.

Tauseef Riaz

It’s just scratching the surface though.

Hessie Jones

It is, but I’ve never been in a position where we’ve offshored in this way. So thank you so much.

Tauseef Riaz

No, it was good to be thanks for asking me all these great questions.

Hessie Jones

No problem. So Tauseef has actually volunteered to share some of your best practices in the toolkit, so we’ll publish that in the next week or so. But thank you for joining us. If you, our audience, have any ideas that you want us to cover on Tech Uncensored, please email us at communications@altitudeaccelerator.ca. We are also on Podcasts, so you can find Tech Uncensored wherever you get your podcast. So thank you again Tauseef and for everyone else. Until next time, have fun and stay safe.

Host Information
Hessie Jones

Hessie Jones is an Author, Strategist, Investor and Data Privacy Practitioner, advocating for human-centred AI, education and the ethical distribution of AI in this era of transformation. 

She currently serves as the Innovations Manager at Altitude Accelerator. She provides the necessary support for Altitude Accelerator’s programs including Incubator and Investor Readiness. She will be the liaison among key stakeholders to provide operational support and ultimately drive founder success. 

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