New startups are born every day. Few of them succeed and become the next Facebook. Most of them fail though. According to Small Biz Trends, around 90% of startups fail sooner or later. The reasons why they fail are numerous. One of them is lack of focus and incompetence. You see, founders often try to focus on too many things at a time: marketing, sales, software development, customer support, branding, and so forth. The truth is, we humans can focus on very few things simultaneously, if not on one only.
Taking this into account, it becomes clear why outsourcing is a must for all startups. It is a good idea to focus only on your core competencies and vital areas such as marketing and sales and outsource the rest. For instance, you can hire from a Ukrainian software development company such as to help with product development, use the services of an accounting firm to have them manage your finances and bookkeeping, and outsource customer support overseas.
What areas you should outsource depends on your specific circumstances. But before we talk about specific reasons why outsourcing is a good idea, let us explain to some of our readers who are unfamiliar with the term “outsourcing” what it actually means.
What Is Outsourcing?
Simply put, outsourcing is the process of hiring someone to have them do your work for you. For example, if you don’t want to bother with customer support, you can outsource this area to a specialized agency which will take care of all your customer support needs. The largest companies in the world such as Google, Microsoft, General Electric, Apple, Exxon Mobil, and others outsource as well.
They have discovered a long ago that outsourcing allows them to be more cost-efficient and productive as well as focus on the most important areas in their businesses and core competencies. Now, if such giants do so, wouldn’t it make sense for startups to learn from them and outsource as well? If this argument is not convincing, let us explore the main reasons why every startup must begin outsourcing.
Why Every Startup Must Outsource: Top 5 Reasons
So, here is the list of the key reasons why every startup founder should consider outsourcing:
- Limited Focus
- Limited Resources
- Focus on business development and growth
- Lack of expertise
- Lower costs
Let us review each of these in detail.
As we’ve already said, focusing on too many things leads to nowhere. This is especially true for startups. Since they initially have few employees (usually just one or two founders), the area of focus is pretty limited. Remember, most humans in business can effectively focus on one or two things at most. If you have an army of hundreds of managers, that’s a different case, your company’s area of focus can be much wider. But with startups, there are only 2-3 things at most which they should and can really focus on. The rest, of course, has got to be outsourced.
Besides limited resources, startups are usually “gifted” with limited resources. They cannot afford expensive marketing, office space, top talent, etc. Therefore, they have to find ways how to obtain them in some other way. Outsourcing provides a solution to this problem. With outsourcing, you can often get access to so much needed resources even with your limited budget. Startups, in many cases, can’t afford to hire many people and to pay large salaries. But they can always outsource.
Focus on Business Development and Growth
When you outsource, you can focus on things that really matter in business – marketing and growth. Your chosen outsourcing partners take care of the rest. Whether startups should outsource marketing and sales is a matter of debate. However, it’s always a good idea to seek outside advice and help from marketing professionals.
Lack of Expertise
A founder can’t usually be an expert in everything. Most likely, he or she is going to be an expert in one or two things. In the case with tech startups, most founders tend to be experts in technology and software development but often suck at marketing and sales, or accounting, for instance. Therefore, determine your area of expertise and outsource the rest.
And, of course, outsourcing almost always helps to cut costs, which is a big deal for startups for which every cent counts. The saved money can be invested in marketing and growth instead. The more you outsource, the more money you can save. For instance, many US-based tech startups completely or partially outsource software development overseas because local development costs a lot of money.
Outsourcing can become a great business solution for almost any startup. It allows to cut costs, get access to qualified talent, and focus founders’ attention on things that matter the most which are marketing and growth. Undoubtedly, if done correctly and diligently, it can make any startup more profitable, efficient, and successful, and decrease its chances to become just another failed idea.