Outsourcing developers, scaling fast & side-stepping the second valley of death. Just another day in the life of a startup.

You need to scale, fast!

 

You’re moving at 100 kilometers an hour (because you’re in Australia and you don’t use ‘miles’). 

 

That’s break-neck speed and you’re rocketing along for good reason. 

 

Customer acquisition is picking up rapidly, and your current tech solution won’t hold for long.

 

You built your minimum viable product (MVP) on a shoestring, as every good founder should.

 

There’s only one problem. Your MVP gets you past the first stage, but not much further.

 

Hold tight. 

 

Take a moment to consider where you are in your journey.

DevHero offshore developers scaling a startup

If you’re faced with the challenge of scaling, the very first step to take is to inhale. 

 

Take a long, deep breath in.

 

On exhale, congratulate yourself. 

 

Try and verbalise your congratulations on the breathe out.

 

You, my good friend, have crossed the first, grand startup valley.

 

Known affectionately as the valley of death

 

So many valleys, so much death

DevHero startup valley of death

Surviving the first valley of death means you are beginning to generate sufficient forward revenue, your baby is becoming a fully-fledged, self-sustainable business. 

 

That’s a significant milestone!

 

A feat that bucks an otherwise unfortunate trend. 

 

There’s a statistic that gets passed around the startup scene. You’ve heard it before and it has undoubtedly left a sour taste in your mouth. 

 

Up to 90% of startups fail.

 

Yuck!

 

But not you! You’re not failing.

 

You’re growing.

 

Maybe a little too fast. 

 

With speed comes great responsibility. Your next move is critical. 

 

Your task? Cross the next valley of death.

 

Yes, apparently there are two.

 

Scaling up has its own valley.

 

And the experts agree, the real challenge is scaling up, not starting up.

 

Didn’t hear about that over beers at the office table-tennis table! Or maybe you did. 

 

For startups; funding is critical, a necessary evil.

 

Once product-market-fit is proven, an injection of financial capital is required to fast-track growth with the objective of seizing the market opportunity away from the snapping claws of those nasty big  corporations. 

 

And, despite more recent changes to the contrary, Australia isn’t seen as the best market for growth funding. 

 

“When a startup is looking to scale rapidly, there’s a market opportunity to capture and if they just grow organically they’re going to miss it.” OneVentures CEO, Michelle Deaker says.

 

That crucial scale up period is the second valley of death.

 

If funding isn’t secured quickly, the second valley widens.

 

If revenue from organic growth is not enough to sustain the company, the valley will claim yet another victim.

 

How to sidestep the second valley and scale quickly

DevHero minimum viable product

Your minimum viable product was built using the agile software development methodology. Great!

 

Your platform was cobbled together using cloud integrations to keep costs low and features rich. Nice!

 

Your hosting provider is highly secure, with elastic pricing and data is held onshore. Excellent!

That’s a solid foundation. It’s no doubt you’ve gotten this far.

 

Now you need to raise a round of investment.

 

How’s your pitch deck? 

 

Innovation Bay has a great 10 part guide to crafting the perfect pitch deck for Australian VCs. Check it out here.

 

Investment secured? Awesome. 

 

It’s not that hard, is it?

 

How to scale? 

 

The consensus is:

 

  • focus on hiring great people; 
  • track ROI on every dollar spent; 
  • surround yourself with others who have done it; 
  • stop trying to do everything yourself; and 
  • be relentless when it comes to customer problem solving. 

Entrepreneur magazine has a great take on this from experts who have walked the walk.

 

Cash in the bank is a nice feeling, I’m sure you’re feeling all warm and fuzzy inside. It feels great until you realise how quickly it’ll be consumed.

 

That rate of consumption is your runway. How many months have you got of cash-burn until your cash burns out? Hopefully 12-18 months. 

 

Wages, office, marketing. Off it goes.

 

And here you are, a technology startup, funded and ready to scale, with the majority of your new capital budget allocated to non-technical, operational expenses. 

 

Your tech needs to scale too and the upgrade needs to be balanced against the insatiable appetite of the sales team you’re about to hire.

 

That means you need to scale your tech fast too.

 

You know agile, but you need scalable, dedicated talent on a budget.

 

Outsourcing developers to help you scale

 

Yes, the thought of outsourcing developers or offshoring can cause feelings of trepidation. 

 

You’ve no doubt heard the stories; poor code that you have to re-write, freelancers who stop responding, a misalignment of expectations and, of course, in the worst case, a battle for ownership of the code when the relationship with the developer or agency degrades.

 

Whilst these stories are the exception and not the rule, they do highlight some key considerations when outsourcing developers to help you scale. 

 

You want to be able to trust your offshore developers.

 

Trust is built by finding the right offshore developers,  development agencies or freelancers, setting clear expectations, testing their work, communicating effectively and monitoring output to ensure agreed tasks are delivered in line with scope and commitments.

 

What might seem like new territory to you is actually common practice among the tech elites.

 

Apple, Google, GitHub, Slack, Basecamp and Skype have all outsourced software development at one point or another and many still do.

 

Offshoring development is definitely common practice and the market is well and truly in a mature stage.

DevHero USA IT services outsourcing market

With new strategies and solutions for digital transformation, IT outsourcing has become a competitive advantage for a great many organisations worldwide with the market projected to grow to $425.19 billion by 2026.

 

Outsourcing a dedicated team of software developers to help you scale is a great way to keep costs low and affords access to specialist talent at scale which can greatly accelerate product development, helping you advance your first-to-market position.

 

DevHero helps Australian businesses connect with the right offshore developers and dedicated development teams through our tried & tested vetting process. 

 

If you’re looking to scale your team or expand your development capabilities, an augmented staffing model combining onshore and offshore talent is an excellent way to get results. 

 

We can help take the pain out of scaling by matching you with the right offshore talent.

 

Get in touch with the team at DevHero today.