Why is it not advisable to outsource the full development of your own ICO?

5 years 8 months ago
Tania Cuesta
Developer and Blockchain investor.

Why is it not advisable to outsource the full development of your own ICO?

The hiring of outsourcing services for a company is a valid option, a process by which you can get professional services, either by engaging in a sector different from yours or by a matter of logistics, it was impossible to achieve efficiently.

However there are some disadvantages to keep in mind if you are supposed to use this kind of services in IT business, and more specify in a Blockchain related ICO, where is meant that the development, transparency and trust in your team are some of the key points of a solid structure, stable from the investors and from users that support your network.

PayPro lost of funds case was the last one related with this problem, among the technical factors it is very important to get the businesses to realize the importance of being in control of your project, it never should be a valid option that someone who wants to launch an ICO in a sector that is not fully known.

Is it really a good idea to seek investment for your project when your project was not really developed by you?
Let’s suppose that you have a small company in IT business and you make drones with a unique feature, by example, they track movement of an object and can automatically follow it by themselves, in that case you know the technology behind it and you are able to understand how each small part of it works and to explain how.

There are no barriers for you and you decide to put in the worldwide market your product, but to achieve it you need to outsource the distribution process that is a transport related business. This outsourcing is a necessary point because you know nothing about this sector and working with such infrastructure have very high costs, you have to buy vehicles, to get licenses, and to hire drivers ... something in which you have no skills to get good results, or your skills are not better than those that will give you a professional company with years of experience in that area.

However, when we say that it is not recommended in the case of a Blockchain ICO, we can go back to the last example. In that case, you decide to start that small technology company, you have the idea of drones and you know what you want to do, but you decide to outsource the core business to a consultant who invests in the steps you have to take.

You deposit all the trusting for the very first moment to an external company, instead of spending most of the money and efforts in making the best possible company, you pretend that some few consultations are enough for you to begin to continue by your own. One third party tells you what you should do with your company and you trust it and do it blindly.

You hire a company to do all the core development that converts your makes your idea a reality and you give it all the responsibility. Programming is the key point of a tech company but you focus in the management because you do not know that point, and to ensure everything is right you outsource the services of an sole auditing company too.

You can be good in another sector such as marketing and get to convince a few investors that your drones are the best. The problem arises when all of them trust you but they realize that the product does not does not fly in the way meant, neither in the way that was promised in your well made advertising campaign when they did invest a large sum of money.

When this happens, the most common thing that everybody do is to blame the outsourced companies for not doing "that thing that must be done to make it work", however no one notices that maybe you should not make business in something you do not know and in which you have to delegate all of your own development in the hands of the third parties neither to trust a single company to audit your company, when people in the industry always insist that safety be a priority.

Neither inverstors should do it, and is for things like this, that the appropriate tech formation is a very important thing in Blockchain business, we are not only talking about economy, we are talking about a revolution that combines very different things but that have to go hand in hand.

What disadvantages do you have to totally outsource your own ICO?

We clearly talk about the disadvantages outsourcing the development of "your project" from beginning to end to have control over it or sufficient knowledge. One of the characteristics of the public blockchain is the ability to have the community around the world if your development is open source and that is extraordinary. But if you're going to do, you should keep these points in mind:

1. 1. To avoid legal problems you have to make your responsibilities very clear and if something similar to the PayPro case happens to you, to need to have a good lawyer nearby, when you ask yourself, what is my foult?

2. You lose control of the development, all your code is in the hands of a third party and if you do not have technical knowledge, you lose reaction capacity, in security business, time is gold and a failure can destroy your company. It is important to test everything before launching a development, those things have to start from the person who hires and if they are not required due to ignorance, it is possible that they can not save us from an undesirable ending.

3. When we talk about fully outsourcing, we mean that it is always possible that specialized technical personnel are needed in some specific fields, a good project in Blockchain, as detailed at the beginning, you need a diverse, specialized and highly talented team . Outsourcing a company with developers is fine, but if it is your own ICO, things must change.

4. The expenses increases. If you really want to cover a specific need it is fine, but to realize an ICO and a completely external project, I assure you that it will not cost 500€ and if it costs, it is better that you go looking for a good legal adviser, because it will not go out all right.

5. Trust is the key point, it is true that you also need it when you hire a team or when you form it with colleagues, but this is not about trusting a team member, it is about having to trust a company that has your own team members and that team is not yours.

With all of this, it is important not to leave all the necessary services of your company in the hands of other companies. However, if it can have advantages, if they are simple tasks such as Mechanical Turk that do not involve the loss of control, it is something that can help to obtain better technological resources with which you do not have skills or flexibility.

The Blockchain Technology has the ability to give back the worth to people, the power to give freedom to ideas, decentralizing power and building new rules, those ideas that can lead you to want to start a project that you believe in must not be left in third parties, unless the intention is not to contribute, but to enrich yourself instead of avoid these possible scams, contribution is important and pay special attention to the data objectively.

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