A lot of work goes on behind Silicon Valley’s glamorous luster, much of it done by foreign developers. So what do American startup founders look for in overseas contractors?
Software development costs are sky-high with most U.S. development companies asking for $100,000 to $500,000 to create a mobile app, an unthinkable price for cash-strapped startups.
Like other industries, American tech founders outsource their development abroad. Eastern Europe alongside India and China have been primary destinations for years, but global competition is growing. Egypt, Malaysia, Vietnam, and Colombia are joining the game.
How can Eastern European teams stay ahead of the competition? These days it’s not just about low costs.
1. Do: Get out of the ivory tower
U.S. startups do not want want to hire the next John Nash. Impressing clients with the ivory tower of abstract algorithms is not a sales strategy. Instead, they want a contractor that listens to their needs and delivers a product that works.
Zach Hendrix, co-founder of GreenPal, a service connecting customers with lawn services pros, said he wasted $90,000 working on a new app with a U.S. contractor.
The provider was great at writing code but refused to understand the realities of crafting a consumer product. Ever since, GreenPal has worked with teams based outside of the U.S.
2. Don’t: Forget that you compete against – the world.
American startups have the whole world to choose from.
“I emailed, texted, and spoke to prospects in India, Russia, the UK, Romania, Ukraine, Singapore, Brazil, Canada, the U.S., Mexico, and Israel,” said Gustavo Reyes, founder of TravelMobili, a group trip planner.
The most sought-after destinations in Eastern Europe are Ukraine, Poland, and Romania because of competitive pricing, high quality of code, and English fluency.
But the legal implications of outsourcing can be difficult. That is why many American founders prefer agreements within the U.S.
3. Do: Communicate clearly and speak “consumer”.
Many U.S. founders come from other industries with little tech experience and struggle to understand developers.
Communication is not only about correct grammar, but also about cultural understanding. The U.S. are known for a direct communication, which seems to resonate well with Eastern Europe.
Despite the fact that English is not their native language, Eastern European developers are praised for their clarity of communication.
Matt Stover, founder of A36 Analytics, a startup providing retirement and benefit data, said he has worked with approximately 20 different countries. Eastern Europe has become his favorite location to source from.
“I’ve found the technical ability in a lot of other places, but the communication gaps are much larger,” Matt said.
4. Do: Break the isolation.
Eastern European contractors are initially hired for a specific programming tasks. But building a product is an entire design cycle, and writing the code is just one of the many tasks the U.S. startup is handling.
Those contractors who can understand how they fit into and add value in this flow will be truly appreciated. For example, the ability to provide ideas is another sought-after quality.
Global competition in software development increases daily. Eastern European providers are known for delivering high quality code at relatively low costs. But in the long term, only those who build strong relationships, focus on communication and understand the realities of U.S. startups will succeed.
By Victoria Zavyalova, co-founder, V Startup Agency
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