Outsourcing Core Business(swombat.com)
swombat.com
Outsourcing Core Business
http://swombat.com/2011/4/5/outsourcing-core-business
2 comments
For most tech-enabled subscription businesses, the core business is support. Your technology is easily duplicable, so your key differentiator has to be how you deal with customers, and how quickly.
Sales is core too, but sales is also a support task - you talk the customer through how you can help them and what they'll need to do in order to use your product. Educating someone into a sale is pleasant for both sides.
Doing support is time consuming, so make sure you factor that into your prices. Can you really afford to support your product for $9/month? Probably not, your time is worth more. Charge more than $9!
Sales is core too, but sales is also a support task - you talk the customer through how you can help them and what they'll need to do in order to use your product. Educating someone into a sale is pleasant for both sides.
Doing support is time consuming, so make sure you factor that into your prices. Can you really afford to support your product for $9/month? Probably not, your time is worth more. Charge more than $9!
Is it then safe to say you can outsource software development and focus on customer acquisition and support?
No, only that once you have your core features in place, building more won't improve your product and won't win or keep customers. Meanwhile, as a non-tech business, your competitors can easily copy the features you built, so how do you win? In the long-term you have to beat them on sales and support, and outsourcing that to someone without a deep knowledge of the product (as in the article) makes that hard.
The best entrepreneurs, from what I have seen, are the people that want to and must be involved in all core business responsibilities. The passion and persistence required to create something demands this.
However, I believe there are exceptions to this, such as design. If you have great product vision, technical ability, understand your users and you are infinitely passionate about the product you are building, I see no problem with outsourcing (at least initially) to 99designs or similar sites.
However, I believe there are exceptions to this, such as design. If you have great product vision, technical ability, understand your users and you are infinitely passionate about the product you are building, I see no problem with outsourcing (at least initially) to 99designs or similar sites.
Most startups claim to be technology companies. I think 90% of these are tech-based companies as opposed to technology businesses. The difference being the latter kind is more like Intel or VMware. If you are tech-enabled, then what is your core business? Is it the software you write?