Choosing an outsourced development provider

As part of product management and development support to an expansion stage software company in our venture portfolio, I recently helped with the selection of an outsourced product development vendor.

I was looking at all the standard issues, including their adoption of agile practices, experience with specific technologies, experience level of the team members, experience with certain types of projects and customers, references, price, and so on.

Based on these criteria, and others, a few vendors looked all about the same. But then I considered the size of the vendors.

One has close to 1,000 staff. One has 80. And one had very recently started out with just a few.

I then remembered an experience I had with a project, where the project went into failure mode because it was a relatively small project for a big vendor, and it wasn’t being properly resourced as a result, with the attention focused on larger, more lucrative projects.

I realized that in the 1,000 employee company, our portfolio company would be just another of many, many customers and projects.

The new small company was probably too risky.

But the 80-staff company offered a nice mitigation of the risks I was considering. It was small enough such that our portfolio company’s project would be a big portion of their business, and thus receive the top people and the right level of attention, but it was big enough to be secure as a business.

This is of course one of many factors to consider in outsource agile product development, but one that hadn’t occurred to me before, and I hope will guide me to better decisions today and in the future.