Let's Learn from a Loser: How I Lost $10k Outsourcing

[jrace4fun]

Look at this way: you wouldn't just take a bunch of plans and thrown them at a journeyman carpenter and expect him to build a house, would you?

If he's the general contractor I sure would, that's his job. He signed a contract saying that he understood the scope of the project and that he is capable of completing it.

 

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[johnp]

Good thread. Here is my perspective on things about 3 years out.... I try not to think back to that time, mainly because I need to keep moving forward. But maybe this will add some value to the thread.

In 2011 I started a web based project. I lost about 12K and 1 year of my life. But I didn't quit.

It's now 2014, my site is up and better than many of the sites out there, it's always improving and I'm gong to get it profitable this year. So the key this...don't quit. No matter how bad things get.


If you don't know what HTML is then you're already in trouble.

I started in 2011. I couldn't read a line of HTML or even CSS code. This is a huge problem, considering how easy it is to learn html today. I ended up learning html in about 2-3 days. But here's the thing, if you don't know html, then you probably don't know much about web development. If you don't know anything about web development then you're not going to know how to speak to the developers and the project manager. You also put yourself at risk of be taken advantage of.

Do your due diligence

I was a senior in college. I had this great vision (which actually sucked). I was so excited to get started. I got investor money. I incorporated. I was going to make my millions from advertising hahahahha.

But I never really took the time to do my due diligence on the company. I spent a few hours reading reviews about the company. Everything was positive...but that was probably because I was reading reviews on the company website. I just wanted to get started.

The company that I selected was a 5 star company on elance at the time. They specialized in building custom social networks. Since 2011, their star rating has dropped down to 2.5 and I have seen multiple projects get pulled out from under them.

Avoid outsourcing across the world for *complex* projects

My project was outsourced to India. I'm not going to say anything bad about their quality of work. The designers were actually very good (minus the constant spelling mistakes).

But I will say this, trying to outsource a project across the world is nearly impossible. There are major communication barriers, there are legal issues, time zones don't align, and communication problems again. It's just a nightmare and it adds so much stress. You don't need to outsource your work across the world. Network with people. Find college students. There is talent outside of odesk, elance, and freelancer .

Don't try to get it all done in one shot ---huge mistake

This was one of my biggest mistakes. I tried to build the entire platform at one time. Yea, I was stupid and I thought that the term MVP only applied to sports (most valuable player).

My initial quote was 20K for 7 months of development. That's a lot of money and a lot of time. I justified it by saying "well they are a 5 star development company" - it will be worth it.

...no it's never worth it.

My project had about 50 pages, dozens of features, pages and pages of mockups..it was pretty crazy. it only takes one feature to solve a need.

Pay attention to red flags - Being Optimistic will not always save you

I ignored constant red flags. - spellings, frequent vacation days, office relocations, a project manager who loved everything that I had to say, major communication issues.

It shouldn't take 7+ months to make wireframes

I started the project on June 1, 2011. We spent the first 7 months converting my mockups from photoshop pngs to new mockups with better designs. Then they spend the next 5 months creating shitty wireframes that didn't even match the mockups. That's 1 year!

I remember sitting in Starbucks looking over the mockups in Jun 2012. I practically had a melt down. That's when I realized that I had to go out and find someone else, and I had to take more initiative to educate myself.

I didn't have a business model

This doesn't really relate to the developers. But one of the things early on that hurt me is that I didn't have a business model. As a result, I didn't have the drive to get that first sale..I was kind of lost and confused. It took me a long time to finally get a business model that made sense.

You're always in control

I made a ton of bad decisions starting out. That's bound to happen when you don't know anything. But I have also made a handful of very good decisions. The best decision that I ever made was to pull out completely and restart the entire project.

This means that I had to take a 12K loss. I had to explain to family, friends, and investors that things just didn't work out. I had to put my faith into new people. I had to put my faith into myself to learn shit and get outside of my comfort zone.

But the hardest thing was def taking that 12K loss and 1 year loss of time. But the risk and sacrifice was worth it.

Looking back...

For the first year I blamed the developers. I got a huge fight with them. I told them that I was going to ruin them. I was pissed.

But now, looking back. I see that I'm the reason why I failed at my first attempt.

- I hired the developers
- I created the insane mockups
- I didn't take the time to learn even a simple thing like html (I can now write html in my sleep)
- I let myself get taken advantage of
...and the list goes on..

I only made one good decision between June 2011 to June 2012, and that was to try again. Notice that I said try again. I did not say quit, give up, bitch to my mom about it...I said to try again.

Honestly, the whole web thing is hard. If you want to do something really complex and really good, then it can sometimes feel like you're caught in a rat trap. It takes A LOT of time to go from 0mph to 100mph with this stuff. I don't even know how many hours I have spent sitting down and tinkering with design. It's hard all of the way around..for me, for the guys who do the complex coding and database work...there is a huge learning curve with this stuff...

If you're currently trying to build something complex (like a social network) and it's not going your way, then feel free to PM me if you need advice/help.

 

[jrace4fun]

@johnp, I just had a deja vu moment while reading your post

 

[CommonCents]

https://angel.co/coventure

Coventure We invest ~$30,000 of software into pre-seed tech startups and then help them raise their first round of financing. They were on FBN today and said they get 5-10% equity in exchange.

 

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[SGBoise]

Thanks for sharing. Definitely helpful avoiding problematic developers.

 

[MJ DeMarco]

BUMP.

 

[BradS]

Has anyone had any success using Ziptask rather than elance or odesk? I've read that using Ziptask has been easier for nontechnical founders because you actually hire a project manager rather than the developers. Then the project manager hires the developers and makes sure your job is completed how you want it.

Be careful with ZipTask. To me at least, the payment structure was misleading. Nowhere on the site (to my knowledge), is the payment process fully explained.

When you submit your project, you also submit your budget range. The next step is to talk to a project manager. What is misleading is that the payments to the project manager are not part of your budget. You have to pay the project manager on an hourly basis, completely separate from your budget.

If you want to talk to more than one project manager, you have to submit separate projects. You can only associate one project manager with each project. The first step is supposed to be a free video chat (1 out of 4 project managers that I talked to did a video chat). The second step is, you have to decide to either "hire" the project manager or submit another copy of your project and talk to another project manager. You have to hire a project manager without receiving a proposed budget / timeline / estimate. Once you hire them, they start logging the hours it takes to build your estimate. Some of this time used to build your estimate will be spent on the phone with you, where you explain your project to them. The rest of the time they are supposedly talking to their team to figure it out. You have no idea how much this process will cost you, how many hours they will "put in."

In my case, my hired project manager became very unresponsive, even failed to meet deadlines that he himself set and failed to get on calls that we had scheduled. He did not read the supporting documentation that I submitted, and anytime we spent on the phone was him asking me questions and me reading from the supporting documentation. So I fired him. Immediately (now all the sudden he is responsive) he sent me a summary of his work on the project - which was a cut and paste job from another project of his, even including parts from his other project that he forgot to edit out. Then he wanted to get paid, after wasting two weeks of my time and supplying me with a completely useless, error filled document.

To "hire" a project manager you must put in your credit card. ZipTask's website says the following about payments, "Milestone-based payments.
Payments are made to Ziptask as milestones are completed and deliverables are received. Since you review each milestone before it is officially approved, there is no risk to you." Based on that statement - one should feel comfortable about being able to find the right project manager without having to spend anything. However, now we must assume that at this point that project manager hourly retainer fees are separate from these milestone based payments, although ZipTask will lead you to believe otherwise. I even had a project manager tell me on an initial phone call that I would not pay anything until the first milestone was reached.

My project did not get far enough to establish milestones because my project manager was absent and uncommunicative for too long of a period.

Let's say your budget is $5000 - it could EASILY cost you $1500-$3000 just to get an estimate for your project - with barely any work having been done. If your estimate costs 30% of your budget, what will the final cost be?

I do feel like ZipTask can be used to find the right project manager to build what you want. However, I would expect that whatever you put in for your budget, expect your final cost to be WAY over budget.

 

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[mememan]

Let's say your budget is $5000 - it could EASILY cost you $1500-$3000 just to get an estimate for your project - with barely any work having been done. If your estimate costs 30% of your budget, what will the final cost be?

ZipTask is crap. Your description is spot on. I don't even know who their model is geared towards, since who the hell would pay $1,299 - $9,999 for a spec? $10k is too F*cking much for a simple website that's isn't just a brochure/blog, so why increase costs by 100% for them to make a nice flowchart for you? BTW, their "graphic designer" on the sales page isn't bad looking Actually, the whole animated thing is kind of neat on the site and might have been a little costly, so maybe their clients are paying for that.

Actually, screw all these agencies. If you want something developed find ONE dude who can do it all (excluding maybe some custom design work). Be able to talk with said dude via Skype or whatever (on text chat, video is DUMB and I've seen agencies push for meetings/discussions via this method even though connections suck) and not charge you for that. Fixed price. If you can't find one dude to make a simple web app for you, you certainly don't need to be paying for 10 mediocre people to be working on it.