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

[chrisbiz4444]

Thanks for sharing! Btw, there is a great conference call on the INSIDERS about outsourcing on Elance. It probably would have saved you 10k >.>

How much of a difference is there on the inside compared to the regular forum ?

 

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[IAmTheJeff]

How much of a difference is there on the inside compared to the regular forum ?

I hear millionaires are made in there. I might go find out as early as today.

 

[chrisbiz4444]

This is the only thing putting me down about fastlane businesses - the online game.

I think we are all better off learning to code ourselves. where will we be in 15 years time? perhaps starting another business? oh no, i have to pay someone to make an app for me again, i should of learned to code at the start.

'best time to plant a tree was 20 years ago, second best time is now'

This is the only thing putting me down about fastlane businesses - the online game.

I think we are all better off learning to code ourselves. where will we be in 15 years time? perhaps starting another business? oh no, i have to pay someone to make an app for me again, i should of learned to code at the start.

'best time to plant a tree was 20 years ago, second best time is now'

Sounds great in theory. But learning code is harder then it seems at face value. There are many languages. Would you rather spend your hours learning code or building a fastlane business? Unfortunately there is only so much time in a day. However I agree. I love the idea of learning code as well and skipping all the B.S with developers.

 

[chrisbiz4444]

I hear millionaires are made in there. I might go find out as early as today.

If you get on the inside today message me and tell me if it lives up to all the hype. I might join you. I have already learned so much from this group and If its magnified on the inside It would be well worth the $.

 

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[IAmTheJeff]

There are endless numbers of posts talking about why the inside is more than worth it. My only issue has been the money to do it. But now I'm like "F*ck it, we don't need to buy diapers, he's three! Potty train him already!"

 

[chrisbiz4444]

Lol ! Well im going to go look for those post and read up on this inside stuff !

 

[IAmTheJeff]

Everything you need to know is right here: https://www.thefastlaneforum.com/community/pages/fastlane-insiders/

This here is worth quadruple or more alone:
Educational Private Conference Calls
Every so often INSIDERS provide FREE, educational conference calls. In the past, topics have ranged from raising money to effective Facebook advertising to effective outsourcing on eLance. These are not available to the public, available on any PODCAST channel, or available to regular forum users.

 

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[mememan]

Just want to share a few views as a developer, hopefully it helps you guys.

1. Outsourcing is like picking a car mechanic. Always a gamble! What you can do is:

- Stack the odds in your favor by performing all due diligence already mentioned in many threads
- Check if they've done related work previously (or will be learning on your dime)
- If they did show you previous related work, ask for proof of credits, recommendations, talk to previous employers
- Ideally you want to find someone who is a good professional and a good person too. Because, many freelancers, just like many car mechanics, when they spot someone not versed enough, will always find reasons to milk more money, and will try to tell you all kinds of stories.
The more you know about web technology, the less they can full you. And start learning about cars too, I know I did and it saves me money


2. Don't Post Your Budget:

- While I browse freelance sites looking for work, I see this all the time. If you're willing to pay $3-5k for something, then - just like OP experienced, you'll get a ton of bids for $5k and for even more. Open another job, same requirements, but with budget $750-1500, and guess what happens? Open third same job, budget $30-250, and guess what happens?

The truth is, too many bidders don't even read or care about your project, they just want to know how much you will pay.

Another extreme is if your budget is too low for something. Good workers will skip it.

Until you gain experience for setting the right budget, let the freelancers give their estimates.

3. Avoid hourly billing:

- It puts the employer under stress and uncertainty. "How much will this actually project cost".

- It's really tricky for the freelancer. So the faster he can do the work - the less he will be paid?

- To make fixed pricing work, you need to be as specific as possible what is the scope of work, so that both you and the worker know when it's finished. And also need to be fair in terms of adding new stuff. It's ok to ask for some small features. But if you keep coming up with new ideas and requirements - be fair and offer an extra pay for that.

4. Keep the pressure: You want regular updates. Set the tempo. Ask about the progress, ask what's done, how things are going, ask to see results. Depending on the project, daily or weekly updates may be more appropriate. But remember that you are not merely a customer here, you are a project manager, so manage workers.

Looks like this thread has got some traffic randomly for no reason in particular, so I'll provide some comments. The main thing is that the above is all true

(1) Both of the devs (I'll just ignore the first one since it was just a clusterfuck of wasted time for everyone) had large numbers of hours, good feedback, apparent experience, references that checked out, etc.

Here's the thing though, these were pricey devs with thousands of completed hours and good feedback. They failed miserably on what amounts to a pretty simple project (and each said it was because I didn't give them time to finish; I'm sorry, but if you are going x2-x3 times over budget and haven't completed even half of the features in my spec which has not changed since it was offered for bidding at the start of the job, I'm not going to work with you).

I recall actively looking for and inviting some devs, but since they were so busy, most threw out a crazy price to see if I'd take it. For example, one guy had a blog, prior experience building a SaaS as a hobby, and a $20 hourly rate as recent as 2 years ago. I got in touch with him, and he wanted $1k a day minimum and said he'd never charged $20 an hour, even though you could see right on his profile that he had done a lot of work at that rate. There's no way he got 500% better in 2 years He hid his profile after that.

Also, though I never worked with an agency online on this project (and the first dev was just one guy "posing" as an agency I guess), I wouldn't recommend it. At one point I contacted the 30-50 top firms on eLance (mainly focusing on Eastern & Western Europe). Sent all my spec information, made videos discussing my project, hell, I even sent code from before since I didn't care if it was stolen. Some wanted hundreds to $1k just to look at the stuff. A decent amount have horrible intake people who sent me back form responses asking for information even though I sent literally everything to them.

I was close to working with one particular EE firm. Their price wasn't horrible ($5k for RoR implementation, but even that was unnecessary since I already had the code done 85% in PHP), their intake/point of contact had a CLEAR idea of what I needed (this was just a clone project, I can't even imagine trying something unique), free mockups/wireframes, etc. Also the price was fixed.

However, when it came to awarding the job, they switched over to wanting to do some odd escrowed hourly. Like they'd do the work each week, I'd escrow and release the money, they give the code to that date, etc. Oh, and the $5k wasn't fixed. If they went over, they'd do 25% discount on their rates, but still, it was pretty much hourly. Not only that, "design" wasn't included in the proposal, even though someone there took the time to mockup/wireframe a clickable version of the site. So yeah, didn't waste any more time with them.

(2) This is so true. Before going online looking for devs, I spoke with probably 20-30 of the ones who applied on DesignQuote as well as ones that I found via phone and e-mail. The ONLY thing most of them cared about was my budget. It was one of the first few things they asked and is honestly a major turnoff. It's been a while, but if I recall, I said $1k to $3k or $5k, depending on the features from my spec that could be implemented in the initial release.

These were largely US based companies, but I'm sure most had some offshore workers. Location was variable, but I know some were in low cost of living areas. Even with my stated budget, I had people coming back to me for $20k-$30k. I know (and knew at the time) what I was trying to would not cost even a fraction of that. I had one podunk person who worked alone and sent me a crappy church website as a "sample" of what they could do wanting $40k

I'd say "not sure" or $500-$1k are good enough budgets to put down on most projects that come with design assets from somewhere else and need some custom coding that puts them above a static WordPress site, but below something super complicated.

(3) Screw hourly billing on anything. I've even had some freelancers take 30 mins or so to produce a "free" sample (say research of some kind), and they came back with a cut and paste of crap from online, but went to a lot of effort to say it took 30 mins to complete. I don't care if your hourly rate is $3-$5, I'll just do it myself if you can only get one source in an hour.

I'd go so far as to say weekly or even monthly fixed payment if preferable so that you remain in control at all times. That, and you really have no business going through the work diary to make sure they are always "on task" and not charging you for going on YouTube. I caught the $40/hour dev trying to slip 2-3 hours in like this.

A lot of people like oDesk, but I don't since, at least last time I used it, they push too strongly for hourly, and for fixed price, you have to put in an exact price. There's no escrow and no "not sure" budget option. Also, I hate how your full name is out there, but that's just me.

(4) This is key. Hourly just does not work with wanting regular updates. Do you want to pay an extra "hour" a day to get updates? Do you want to talk with your developer on Skype and have the clock ticking. Screw that.

What you need is daily updates pushed to a testing environment so that you can actually go through the site in real-time. If I'd demanded this, I would have saved a decent chunk of change. The first dev I used that programmed any code took a good 2-3 weeks to get something up, and by that point, I was already on the hook for 100 hours or so.

oDesk has a "review period," but it means jack shit since all you can debate is if the hours were logged properly or not. What I found out once the site was live was that the data was all screwed up, half of my 6 features were not there, it was built as a WordPress plugin vs a PHP app (don't know where this idea even came from), etc.

Same with guy #2. Main warning signal for me should have been them offering fixed price to complete the job, then wanting hourly since they "had a bad experience with someone wanting to add too much after the fact."

I was an idiot and agreed to hourly since, honestly, the guy seemed to really get the project, saw what was wrong in the last developer's work, had excellent communication (better than some of the US devs even), and made frequent updates at the start. I hate to say that personality-wise and communication-wise, he was probably the top programmer that I spoke with, and I at least made contact with a good 100 or so over the course of losing this money.

That's all I've got for my wall of text. Any questions, shoot

 

[Phil Wei]

Hi Fellows,

I am new here and I sincerely respect all of you.

I feel sorry to hear your bad outsourcing experience, I think there are a lot of problems regarding to outsourcing a software related jobs like app development, web development and so on from a non-developer or non-engineering management companies. It is difficult to track projects when you hire someone on odesk or elance, and difficult to evaluate skillset / salary ratio. There are good developers out there, but they charge a lot more and most of the time, they maybe too busy to work on your stuff.

For example, you will see developers on odesk that logged so many working hours, and they literally worked on your stuff for a lot of hours in a day; however, why don't you see progress being made. Standing from a psychological point of view, we human, are not really productive when we work more than 10 hours a day. Frustrations got built up and productivity slows down quite a lot. The core of productivity is nothing but human. Developing a positive attitude is very important (Positive Psychology).

What's more downgrading the productivity? You, as being a client, probably do not understand how they think and give pressures on their work too. A developer, who worked 6 hours on other people's project, continued working for 10 hours in the same day on your project, may think himself has done way more than what you asked for. Well, thats just how they think. How do clients think? Clients always expect more than reality. You see the difference! There is a gap, a gap between the developer world and the clients' world.

Hope it helps. Shoot me a message if any of you needs any outsourcing advises.

Sincere respect!

Phil

 

[CommonCents]

are there fee based services/intermediaries that help manage the outsourcing process? doing searches for open source and outsourcing the rest? (something like hiring a building consultant to help you contract your own home build)

 

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[ari_ari]

are there fee based services/intermediaries that help manage the outsourcing process? doing searches for open source and outsourcing the rest? (something like hiring a building consultant to help you contract your own home build)

Not really. This is actually something my internal project manager wants to start , but the larger problem is that of education of the person who's doing the outsourcing. Outsourcing design is one thing, but a lot of people who outsource the tech stack dont have any technical background and are forced to choose tech people and make tech decisions without being able to properly evaluate.

I am not convinced that coming on as a middleman to be an advocate for the company doing the outsourcing makes financial sense for anyone involved.

 

[mememan]

Not really. This is actually something my internal project manager wants to start , but the larger problem is that of education of the person who's doing the outsourcing. Outsourcing design is one thing, but a lot of people who outsource the tech stack dont have any technical background and are forced to choose tech people and make tech decisions without being able to properly evaluate.

I am not convinced that coming on as a middleman to be an advocate for the company doing the outsourcing makes financial sense for anyone involved.

I've looked at a few places that do something like this, but it's not worth it. They add too much overhead, typically charge hourly, and are spread between so many projects that they really don't care about your success, just separating you from your money. Learn how to do it on your own. I can see the mistakes I made trying to be "nice" and looking for long-term technical partners. 1st time was a fluke of bad luck all around, 2nd time was the typically just shitty result, but the 3rd time was me being really dumb and actually liking the guy I was working with and allowing him to have too many breaks between working on my project and other things he had going on. I could have saved a good $3k or so by telling him to eff off earlier.

 

[jarecki]

What do you think about sharing profit, say 10-20% for 6 months, with the developer as his salary?

 

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[mememan]

What do you think about sharing profit, say 10-20% for 6 months, with the developer as his salary?

Hell, I wouldn't have minded that. I've considered doing something like that if I try again. However, the vibe I get reading online is that most people won't go for this.

I didn't lose $10k all at once. About $1k-$2k was from losing on a chargeback, lawyer fees, etc. $3k was for a WP plugin I did not need, want, or ask for. $5k-$6k was me just being idiotic with the last dev. I should have ate the cost at $2k before they took a month "break," but I just wanted to get something up that was workable and stupidly allowed him to "finish" it when he got back.

The thing is, you talk to any developer, even $20/hour ones, and they'll say that these rates were NOTHING for a web development project. I can kinda see this. One public report from Pat Flynn was on a Baby Maker app:

http://www.lolerapps.com/baby-maker-costs-and-earning-report-in-the-black

Says he spent $5k on this. Honestly, to me, this is just a dumb app and I'd never spend $5k on something like this. Then again, he actually got some up and I didn't, so again, I'm the loser

 

[jarecki]

Just spoken to a friend who works as a dev, on salary. He said that the dumbest iPhone app takes about $2k and 2 weeks (~80hrs) of developer time. It's his opinion, can't refer to personally to that.

 

[mememan]

Just spoken to a friend who works as a dev, on salary. He said that the dumbest iPhone app takes about $2k and 2 weeks (~80hrs) of developer time. It's his opinion, can't refer to personally to that.

I wouldn't doubt it. That's why I'm not too miffed at being a retard. I mean, $25/hour is also not a bad rate for a programmer as far as I can tell.

I wouldn't touch apps, especially games. Far too much risk, and I look at the app store and it's just full of dullness since the majority of things are these cutesy, freebie games that nag the hell out of you to buy crap.

 

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[ari_ari]

Just spoken to a friend who works as a dev, on salary. He said that the dumbest iPhone app takes about $2k and 2 weeks (~80hrs) of developer time. It's his opinion, can't refer to personally to that.

Blah. We just rolled out a simple Android App - $950 for the developer and $80 for the graphics. Doesn't included already developed resources in place (APIs, primarily). Developer is in Armenia.

I wouldn't doubt it. That's why I'm not too miffed at being a retard. I mean, $25/hour is also not a bad rate for a programmer as far as I can tell.

I wouldn't touch apps, especially games. Far too much risk, and I look at the app store and it's just full of dullness since the majority of things are these cutesy, freebie games that nag the hell out of you to buy crap.

The Eastern European rates are all over the place. They publicly charge (on oDesk) 25-30, but you should be able to get $18-20. What no one is paying attention to is that the value of Ukranian and Russian currency has plummeted in the last few months, making the dollar finally go farther somewhere.

 

[sk24iam]

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.

 

[mememan]

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.

Ziptask has barely any traffic. I really don't think their business model will work. I sent a message to them. The founder wanted to setup a Skype appointment during which I pretty much just explained my specs to them. What they don't say online (or didn't at the time) is that there's a pretty hefty domestic hourly charge for the project manager tacked onto everything else.

 

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[mememan]

Blah. We just rolled out a simple Android App - $950 for the developer and $80 for the graphics. Doesn't included already developed resources in place (APIs, primarily). Developer is in Armenia.

Would you happen to have a link to the project and/or the developer's portfolio? How simple of an app are we talking about?

 

[ari_ari]

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.

I've never heard of them, seems like an interesting idea that won't scale for complicated projects.
Here's the thing - I don't think you can be a non technical founder if you are building non standard projects (meaning you're not working with a standard e-commerce cart that needs customization, or some sort of relatively simple integration between a payment and shipping API).

I'm not saying you have to be a developer - but you have to have an idea of what's going on and what tech stack you want to use, and the scalability of your project. Decisions developers make without your input will have real implications on how a tech based business grows and may cost you a lot of time and money down the road. Hell, I am paying now for infrastructure mistakes that I made when we first started on a project, and I'm supposed to know what I'm doing!

 

[ari_ari]

Would you happen to have a link to the project and/or the developer's portfolio? How simple of an app are we talking about?

The App is not released yet, we're still QAing. I don't want to release the dev until he's free on this. Also keep in mind I have a full time project manager who chases after all of my developers around the globe.

The App is a 2 page app that takes data you give it, calls an API and gives you the result. It also has built in ad network testing and analytics.

 

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[mememan]

I've never heard of them, seems like an interesting idea that won't scale for complicated projects.

This. The PM cost layer is so high. Honestly, you're better off just paying the dev more if they're actually a good one.

The App is a 2 page app that takes data you give it, calls an API and gives you the result. It also has built in ad network testing and analytics.

So not a super simple app. That's kind of what I was looking for function-wise. Input. Call API. Output.

 

[ari_ari]

Right. also keep in mind it's android. If you drop me a PM I will try and see if I can help after we finish this project..

 

[mememan]

Right. also keep in mind it's android. If you drop me a PM I will try and see if I can help after we finish this project..

Yeah. Android I would think would be cheaper than iOS, but at the same time, iOS is a pretty closed development environment isn't it, meaning there is a fewer range of tools or frameworks at one's disposal, or is that an incorrect assumption?

I wasn't trying to build an Android/iOS app (though I did consider having that functionality available in the future). I was just trying to get a website built that acted as a web app in that you'd input data, the API would be called, data would be displayed, and the data called would be stored and a new page on the site index created.

 

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[ari_ari]

Yeah. Android I would think would be cheaper than iOS, but at the same time, iOS is a pretty closed development environment isn't it, meaning there is a fewer range of tools or frameworks at one's disposal, or is that an incorrect assumption?

iOS is sexier, everyone wants to be on the App store, the devs seem to charge more.

I wasn't trying to build an Android/iOS app (though I did consider having that functionality available in the future). I was just trying to get a website built that acted as a web app in that you'd input data, the API would be called, data would be displayed, and the data called would be stored and a new page on the site index created.

Without knowing anything about your site, if the function looks like this and nothing more:
home page -> form submit -> api call -> data parsed and saved to database -> data displayed -> new page generated from data
should cost $500 by a bad Indian and $1200 by a good eastern european developer.

 

[mememan]

iOS is sexier, everyone wants to be on the App store, the devs seem to charge more.
Without knowing anything about your site, if the function looks like this and nothing more:
home page -> form submit -> api call -> data parsed and saved to database -> data displayed -> new page generated from data
should cost $500 by a bad Indian and $1200 by a good eastern european developer.

Yeah, which was my vibe as well. Again, that's why I'm the idiot/loser

 

[jrace4fun]

There should be a list of credible developers. Is there such a list on this forum? I'd pay $$$ for it.

 

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[mememan]

There should be a list of credible developers. Is there such a list on this forum? I'd pay $$$ for it.

Agree with this. While I accept that most of the poor result is on me due to choosing hourly, the first EE guy I used had 4k+ completed hours on oDesk and 4.5+ stars. I checked with his references and they said he was good, but of course, I should have specifically asked what he contributed to the project.

Then again, I had everything outlined as to what I needed (even dipping into some of the technical aspects of it). I didn't change my spec. They agreed to the spec. They're the one providing the service. I get that I'm in charge and have to watch, but at a certain point, I feel that if things didn't work out with this guy, how can you expect to just find a random person who can do the same? It's like they couldn't just LOOK at comparable sites that I listed and wrote up comments as to how they functioned and THINK on doing it themselves.

 

[ari_ari]

There should be a list of credible developers. Is there such a list on this forum? I'd pay $$$ for it.

here's the problem. I have developers who I work with who are great but you could never work with them, because I have a deep systems understanding and sort of immediately understand when they are about to screw up. I also am able to guide them into solving the problems they encounter.

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?

You get an architect, a general contractor, all of the sub guys. As the building goes up, it gets inspected.

The same is for software development. But everyone wants their app or site done yesterday at lowest cost and then we end up with a thread like this one

Tomorrow I will post about a current project that is coming to an end and what it taught me about hiring devs. (6 month project, 3 devs, qa, overruns etc ).