Percentage of successful technology start ups that outsourced product development


There's an interesting question from this site, but I'd like to ask something more specific. Let me re-post the original question first:

In fact, I've seen some start-ups fail quite badly after outsourcing
their development (and, in my opinion, that was because they did so).
By contrast, every start-up that succeeded spectacularly seems to have
had some serious engineering talent involved right from the start.

However, to keep an open mind, I'd be interested to know whether
anyone knows of successful start-ups (i.e.: made a good profit, and
are reasonably well-known in their niche) which did successfully
outsource their product development. It'd be particularly interested
if there are any such start-ups which actually outsourced their
development to a low-cost location like China or India, and still

The question I'd like to ask is what percentage of successful start-ups (successful as described by the original OP) outsourced their product development? An estimate for this percentage would be very useful.


asked Jan 14 '13 at 02:48
170 points
  • Close to 0%, based on a statistic I just made up. – Itai Sagi 10 years ago

2 Answers


I doubt you will find very many successful ones, let alone those who would admit it.

In the initial stages, you have no existing product, very little structure, and the vast majority of it is still in your/others' heads. Even worse, everyone's idea of it is going to be a little different.. both at the micro level and usually at the macro level. In short, v1.0 is the single riskiest time of product development.

In my opinion, outsourcing at that stage is dangerous at best.

That said, once you have v1.0 out the door and the product is some of what you envisioned, works somewhat like you thought, and some of the big architecture/UI/conceptual questions are answered, it's much less risky to outsource then.. simply because you already have structure and it's harder (not impossible) to veer off track.

At that stage, I'd say that outsourcing portions of the development is feasible.*

Regardless, I'd still keep the major decisions in the hands of someone who ideally has a common understanding of the target industry, but at minimum has common understanding of the same language.

  • Notice I never said "easy" just "feasible."
answered Jan 14 '13 at 10:53
Casey Software
1,638 points


You never can tell. Bunch of companies don't even want to say they outsourced it. I've worked for bunch of them and they had some sort of engineering at HQ but main development was outsourced.

Advice: find someone to manage the outsource team that's close to you and you should be good.

answered Jan 14 '13 at 03:56
594 points

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