Entrepreneur Office Hours - Issue #51
Drip campaigns, outsourced development, and other dull (but useful!) startup things
Thanks for all the great feedback on Startup Gold (in case you missed it, you can check it out here). Seems like a winner. I’ve recorded hundreds of similar gold nuggets of startup wisdom from successful entrepreneurs while hosting interviews for Web Masters, and I’m looking forward to sharing more of that wisdom with all of you in future issues.
As for this issue, lots of practical advice (at least I think so) including:
A step-by-step guide to creating drip campaigns;
A Q&A about choosing in-house versus outsourced development work; and,
How to tell if an investor is actually interested in… you know… investing.
Great startups need to be able to execute great customer acquisition strategies, and great customer acquisition strategies start with email drip campaigns.
Do you know how to tell when an investor is **actually** interested in investing in your startup versus just being nice? If not, you'll want to read this.
Office Hours Q&A
I’m desperate for someone to build my app. I’ve been trying to find a tech co-founder for over six months and still don’t have the right tech talent.
A company is offering to build my app for me using an outsourced firm in Eastern Europe. Would you recommend going that route? What are the pros and cons of having an in-house tech team versus using something like an outsourced firm?
Unfortunately, this is another one of those questions I have to answer with “it depends.” Every situation is different, every type of startup is different, and there’s no “one-sized-fits-all” answer as to whether an in-house versus outsourced tech solution is going to work best.
Rather than trying to tell you what you definitely should or shouldn’t do, I’m going to offer some thoughts that’ll hopefully help make your decision (slightly) easier.
Why are you struggling to find a tech co-founder? Is it just bad luck? Or is your inability to find a tech co-founder a sign of a bigger issue? For example, are your expectations for what your technology can accomplish unrealistic? Are you not valuing the tech enough? Are you over-valuing it? Are you misrepresenting what you need? And so on..
Try answering these questions as honestly as possible because they’re probably more important that you realize. Usually not being able to find a co-founder is, in itself, a red flag. If you can’t convince at least one other person you’ve got a worthwhile idea, how are you going to convince the hundreds, thousands, or millions of potential customers you’ll ultimately need in order to be successful?
Tech outsourcing firms are motivated differently than in-house tech teams. Specifically, outsourcing firms are contract workers. Fundamentally, they don’t care whether or not the things they build are successful. They care that they get paid for their work.
To be clear, I don’t mean outsourcing firms are dishonest or unethical or bad at software development. For the most part, I’m sure they want the things they build to be successful. However, their top priority is getting paid for their work, and that impacts the ways they operate.
Specifically, it’s not in the best interest of an outsourcing firm to tell you whether or not you should build whatever it is you’re trying to build. If anything, it’s in their best interest to tell you your idea is brilliant so you’re more likely to build it (and pay them to be the builders).
In other words, regardless of whether or not you choose to outsource development, make sure you appropriately contextualize the type of advice and feedback a development firm is going to provide. Make sure you stick to talking with them about what’s technically possible, and don’t have conversations about business decisions. They’re not an unbiased source of feedback.
Is your product a tech solution? Or is your product a tech-augmented solution?
For example, are you selling a physical product and just need a basic ecommerce website that allows people to buy it? If so, outsourced development is probably a good option. (Or... screw outsourced development and just use Shopify!)
Alternately, are you selling a SaaS product? If so, then your technology is a core part of your company, which makes a stronger case for continuing to search for a tech co-founder.
Whether you move forward with in-house or outsourced development, your product isn’t nearly as important as you probably think it is. Customer acquisition still needs to be your top priority. How much thought have you put into that?
In other words, don’t fall into the “if you build it, they will come” trap. Having a product built isn’t going to magically make your startup successful.
Are you even sure you need to build something right now? Have you proven market demand? Have you proven a customer acquisition strategy? How do you know the thing you want to build is actually the thing you need to build?
A lot of entrepreneurs jump straight to building a product without ever validating a market opportunity and proving that they can access customer demand. But market validation and demand validation are things you can (and should!) do before having a product. No tech founder required! For example, why not build a prototype using a “no-code” solution? Use it to prove market demand, and let that propel you into hiring or recruiting the right tech resources with the money from your early customers or the funding it allows you to raise.
At that point, the relative benefits or drawbacks of an internal versus an external tech team will hopefully be more obvious, and the question you’re asking at your current stage might not even matter.
Which brings me to...
Does your question really matter right now? Or are you using the question as an excuse to focus on unimportant things?
Honestly, I’ve seen in-house development succeed and fail, and I’ve seen outsourced development succeed and fail. What that suggests to me is that the choice may not be a dealbreaker one way or the other. Don’t let it slow you down. And definitely don’t let it distract you from other (probably more important) work you should be doing.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!