Top companies outsourcing for development is a solid strategy to boost business. We at Codable are strong believers in that principle, so much so that our core business relies on it. That’s why we produce useful content that will help you understand more of how to, for example, integrate outsourcing into your current workflow, and other related topics.
The other side of this puzzle is sharing real-life examples of companies that are putting these practices into use. And that’s what we’ll do here. We’ll tell you more about the top companies in the world that leveraged outsourced/remote development and are worth millions of dollars today.
Let’s jump in!
Why Do Companies Outsource?
Outsourcing is a trend that’s only growing, and you may find it surprising that it’s not just happening in I.T. but also in industries like HR, where the market is predicted to reach close to $20B in 2023.
This doesn’t mean there aren’t those who raise their eyebrows or even wrinkle their nose when they hear the phrase “outsourced development”. From a broader perspective, not everyone feels comfortable delegating work to contractors. It might even provoke a deep feeling of discomfort in some. Sure, having a team of in-house developers undoubtedly has great benefits. The thing is, not everyone can afford (senior) developers, especially in the early stages of their business. And not everyone wants to spend money to hire full-time developers before they have a stable flow of incoming client work. That makes it a very frustrating ‘chicken and egg’ situation: you need the expertise, but you can’t afford to hire for it. That’s one area outsourcing fits in perfectly!
Surveys that included top companies like Accenture also showed that 56% of companies outsourcing cited cutting costs as a main driver in choosing to outsource.
Saving money is one reason business owners implement outsourcing into their business strategy. Other reasons companies might choose to outsource include:
- Increased productivity and competitiveness
- Hiring and staffing
- Growth and key advantages over competitors
As we’ll show below, those benefits are often a catalyst for growth; here is a list of 14 million-dollar companies that have used outsourcing to scale their business and see massive returns as a result.
14 Examples of Companies That Outsource for Massive Growth
1. Alibaba.com
For many, Alibaba.com is China’s eBay, but few know that it started as a small “internet company” called China Yellow Pages. Today Alibaba is the world’s biggest global marketplace. When it went public in 2014, it was able to score the biggest IPO ever. But what does outsourcing have to do with it? Well, according to the book “Alibaba: The Inside Story Behind Jack Ma and the Creation of the World’s Biggest Online Marketplace”, in its early days, the founder Jack Ma outsourced the website development to a U.S. firm. At the time, development talent in China was in short supply, while developers in the U.S. had the skills Alibaba were looking for. That’s just one reason, though. The other factor behind Alibaba’s huge success is that Ma was forced to find workarounds and viable ways to grow his company in the face of internet restrictions in China. Currently, the company still relies on outsourcing partners for production, but they’re mainly located in China.
Alibaba’s story is a prime example of a leading Ecommerce company using outsourcing to expand internationally and drive massive growth, which paid off massively in the long term.
2. AppSumo
If you’re just a bit interested in marketing, you already know the name I’m about to drop here: Noah Kagan, the serial entrepreneur who worked for Facebook, Mint.com, and founder of AppSumo.
Launched in 2010, AppSumo is a website that shares and distributes daily deals to its subscribers, mostly tech-focused or software related. These include discounted prices on high-priced software, as well as lifetime access to yearly online courses and other tech-oriented perks. AppSumois now valued at $2 million, with an impressive mailing list comprising some 700K subscribers.
In an entertaining blog post from a while ago, Noah personally explains how he saw a niche for the business he had started to work on and needed to validate his MVP. That’s why he hired a remote developer to code a PayPal integration and start collecting payments through his new website. The overall cost was $50. He then started selling subscriptions to Imgur PRO, an image-sharing website and image host, and then added to a broader list of paid web apps, software, and courses. To this day, AppSumo still relies on outsourcing for many of its areas and projects.
3. Basecamp
Launched in its first iteration in 2004, Basecamp is a web-project development tool that helps businesses and project managers to handle project development more efficiently. The company behind it, 37signals (later rebranded to Basecamp), had started work on the project a couple of years before when they noticed key issues with their client work. As Jason Fried explains:
”As demand for our services grew, we found ourselves increasingly disorganized.[…] We didn’t like the rag-tag image we were portraying to our clients. They were paying us good money — and our work was good — but the way we organized the work, communicated about the work, and presented the work wasn’t becoming. It was time to tidy up and get our shit together.
Still, they were a web consulting company, and Basecamp wasn’t their core business. To move the app’s development further, Jason and his teammates outsourced it to remote developers to optimize their cost-opportunity gain. Thanks to implementing outsourced development into their product development strategy, they quickly started seeing Basecamp generate more revenue than their current consulting work and opted to focus exclusively on working on it as their core business. Today Basecamp employs 57+ people across the globe, and continues going from strength to strength.
4. Expensify
Founded in 2008, Expensify focused on one goal: to help people by providing a tool to collect expenses and keep track of receipts and transactions, easily, efficiently, and simply.
Today, Expensify is a company with 130+ employees and is listed on the stock exchange, with over $169m in revenue per year and serving over 60,000 companies. But building such solutions takes a lot of expertise and effort: Expensify partnered with an outsourced international software house to help them build their back-end systems.his enabled them to concentrate (almost) exclusively on front-end development and focus their in-house resources on growing their business.
5. GitHub
In the world of code, GitHub is one of the most known communities people use and engage with. Founded in 2008 by Chris Wanstrath, PJ Hyett, and Tom Preston-Werner, as a way to host, document, edit, and share private code, it has its roots in an outsourced development consultancy. It was, in fact, by attending several local Ruby on Rails meetups in San Francisco that Tom met with Scott Chacon, a huge expert on Git, an Open Source distributed version control system.
As Tom recalls:
I was thinking Git might be really cool and could get really popular
Scott was the ideal candidate for that. The problem was they didn’t have enough money to hire him as a full-time developer. So they had only one choice left to reach their goal of simplifying their product and push it further: they hired Scott as a Git outsource contractor to eventually build the backend of Gist, a sharing feature within GitHub (See the difference here).
Started as a side project and banking on outsourced development, GitHub is now used by 100 million developers worldwide.
6. Google
As one of the top companies famed for taking care of its in-house culture and employees, it might look like a bit of a mistake to list Google here. The reality, though, is that the tech giant, headquartered in Mountain View, California, has been working with outsourced staff across multiple types of roles for years, with contractors even outnumbering the actual number of employees they have. Whether it’s IT specialists, developers, or multiple other roles, Google already had 120,000+ outsourced employees by 2019. Google is a strong implementer of outsourced work to take care of the many projects they continuously deploy and work on.
One example of where they made a big outsourcing decision is when they decided to outsource phone and email support for Google Ads back in 2011. Google Ads is their biggest earner, so getting it right was important: outsourcing provided the right solution to this and helped them continue their growth by focusing their resources on other areas of the business.7.
7. Unilever
As one of the largest companies for consumer goods in the world, you probably encounter or use a Unilever product every single day. With revenue exceeding $60 billion, it’s no surprise that this company outsources many portions of its operations.
One area it outsources is its HR Business Processing: a core function that supports its 148,000+ employees throughout their careers. As Teo Correia, a senior managing director at Accenture, the company awarded the contract in question, said,
“Unilever strives continually to find new ways of improving its HR function to enhance the skills and abilities of its global workforce, and this contract is key to achieving future success and higher performance.”
Outsourcing is therefore enabling Unilever to deliver efficiencies across the globe to this day.
8. Microsoft
Originally founded in 1975, Microsoft has grown to be a household name across the globe, with a revenue of over $198 billion per year. But even at that size, outsourcing is a crucial part of Microsoft’s operations: a wide variety of its functions are carried out by multiple companies across the globe. This spans a variety of the company’s core functions, including IT support and finance, accounting, and procurement services.
The company itself employs over 220,000 people directly, and it’s said to employ an equal number of people on an outsourced basis to keep it running at optimal condition!
9. MySQL
With its first release back in 1995, MySQL proved to the world it was something we needed when it comes to working and managing databases. Part of its success is due to two key elements: the release of its source code under the GNU General Public License and the smart outsourcing strategy implemented by the management right from the beginning.
In fact, the company saw its growth strategy would need to include mostly outsourced developers and staff worldwide to boost operations in each location. Today, MySQL runs on millions of servers, and it’s used by many of the world’s largest and fastest-growing organizations, such as Amazon, Facebook, NASA, and Cisco, just to name a few.
10. Opera
Opera is a modern and light web browser originally born as a research project inside Telenor, the largest Norwegian telecommunications company. It started out in 1995 with a public release, with the project branching out into a separate company named Opera Software ASA (later bought by Oracle).
Outsourcing made perfect sense for a fledgling company with a bright idea: they needed to maximize their available resources while keeping costs in check. That’s why they handed out part of the development responsibilities to developers across the globe when they started, helping them create and grow their platform to the successful browser in use by millions across the globe today.
11. SeatGeek
The ticket industry is backward, technologically.
It’s this blunt statement that the whole idea of SeatGeek gravitates around. As a search engine for tickets based on event-ticketing websites that help save money for its users, that was launched by two friends, Russel D’Souza and Jack Groetzinger, back in 2009.
Both are firm believers in the power of outsourcing in the early stages. When they needed to launch their product, they therefore relied on outsourced developers to build their website and their database structure. Even today, the company runs the business with an internal team (400+ employees worldwide) while receiving support from outsourced contractors.
12. Skype
Skype was one of the most disruptive tools and technologies during the early 2000s. The idea of Niklas Zennström and the Dane Janus Friis wouldn’t have been part of our lives if they hadn’t outsourced the back-end development of the app to three Estonian developers named Jaan Tallinn, Ahti Heinla, and Priit Kasesalu.
This team had already collaborated on another product with similar peer-to-peer technology for sharing music: a peer-to-peer software the older ones among us will remember, called Kazaa.
Thanks to its philosophy of outsourcing development, Skype was able not only to enter the market but also to become a widespread tool among businesses of all sizes. In 2011, Skype became part of Microsoft, which bought it for $8.5 billion.
13. Slack
If you work with remote peers, you probably use Slack, an online collaboration tool app for teams that has become ubiquitous with remote working. Launched in 2013 by four founders, Stewart Butterfield, Eric Costello, Cal Henderson, and Serguei Mourachov, this widely-used software perfectly embodies the startup approach to launching a new product. Before opening it up to the first beta testers, Slack’s development was outsourced to a design firm, which took care of the app, website, and even its logo.
After that phase, once the product was good enough for the founders, they invited other users and teams to test it out and provide feedback, with 8,000 users signing up on the first day. Today Slack accounts for more than 12 million daily users.
14. Whatsapp
Founded by two former Yahoo! employees, Brian Acton, and Jan Koum, Whatsapp is synonymous with smartphones today, and is the most commonly used communications app in the world. This startup which launched in 2009 and was eventually acquired by Facebook in 2013 for $19.3+ billion, has never denied working extensively with outsourced developers.
Based on publicly available info, we know the core development was originally outsourced to Russia, starting with a contracted iPhone developer named Igor Solomennikov, who then proceeded to join the company eventually as CIO.
Leverage Outsourcing in Your Business for Growth
What’s the story here? In a nutshell, leveraging outsourcing (moderately to highly) can truly have a positive impact on your business. Specifically, outsourcing part of your client work or even part of your site development can benefit you because it’s:
- Budget-friendly
- Time-efficient
- Enables instant access to expert and specialized service providers
- Relieves internal resource constraints
- Lets you efficiently balance in-house staff and overhead expenses
At Codeable, we specialize in helping companies unlock all of these benefits and more, by matching you with expert WordPress developers who will be able to embark on your projects efficiently, effectively, and at exactly the right scale you need. Start a project with us today!
