Start-Up Uses Offshoring to Bring Its Product to Market Faster | Article

mobile applictions in ChinaYou pre-ordered tickets to the latest hit movie, but when you arrive at the theater, the line for tickets backs into the parking lot and you are worried you might miss the beginning of the film. Don’t you wish you could securely access your tickets via your mobile device and print them from your pocket-size portable printer?

Or, you’re at the Greyhound terminal on a Sunday night in Philadelphia when a crush of people is going back to New York City. Wouldn’t it be great to access and print your ticket from a secure kiosk, get on the bus, and avoid the pushing throngs?

You’re at the grocery store check-out and you want to print out money-saving coupons. Or, you’re a tourist lost in a strange town and want to print out a map.

The scenarios are numerous, but the answer is simple: you need to securely print essential documents from your cell phone or mobile device.

Soon, printing from a mobile device will be possible thanks to the work of AirPrint Networks. The Waltham, Massachusetts, company is currently writing software to run a content delivery platform enabling cell phones to print documents. The company uses the familiar client/server platform; however, here users load the software client onto their cell phones, not laptops.

“Our method mimics how voice mail works with a cell phone,” explains Mark Thirman, founder and CEO of AirPrint Networks. When you retrieve your voice mails, you actually dial into a server to listen to the message. “The message streams through your handset. At no time does the software transfer that message to your phone.”

Needless to say, AirPrint is eager to get its product to market now. (The first release is scheduled for fourth quarter 2008.) “Time to market is everything,” Thirman points out.

The new company recently raised $3 million in venture capital funds to produce the software. “We have to be very efficient with our capital. Part of my job is respecting my investors’ money. The best way I can do that is to offshore much of our software development,” says Thirman.

Why AirPrint chose to offshore its software development

AirPrint engineers built the initial architecture for its software platform, but company management offshored the remainder of the development process to China.

Of course cost was a key consideration. Thirman estimates the savings ring in at a ten-to-one ratio.

But cost was not the only factor to consider. Locating effective talent became a priority. “There are 130 colleges in the Boston area, but we still couldn’t find the necessary mobile client software developers. With so much competition for those skills, we had to look elsewhere,” reports Thirman. Specifically, the company needed engineers with Microsoft .NET familiarity and proficiency.

Flexibility was also a key business advantage to offshoring their development. AirPrint needed a team that could expand or contract by the month. The last thing the new company wanted to do was hire full-time employees and then tell them it only needed them for two weeks that month.

AirPrint selected Dextrys for its application development and maintenance (ADM) partner. “We are AirPrint’s product development arm,” says Brian Keane, CEO of Dextrys. Dextrys has focused on global delivery from Suzhou, China, for mostly North American companies, but it is also servicing multinationals in the Chinese marketplace, he says.

In a hurry to bring its product to market, AirPrint began leveraging the time difference between the United States and China to its advantage. The nearly opposite time zones enable a sort of round-the-clock development perk for AirPrint. “Dextrys’s Chinese team can work on fixes during the overnight hours,” Thirman explains.

AirPrint liked the fact that Dextrys’s corporate headquarters is U.S.-based and also a neighbor in Massachusetts; Dextrys’s management team and offices reside in Wakefield, Massachusetts. Culturally, “it was the right fit,” says Thirman.

By extending its mobile development expertise and providing access into China, the largest, growing consumer market in the world, Dextrys is “making China easy” for AirPrint Networks. “Dextrys’s familiarity and longstanding relationships within the region have helped AirPrint navigate the complicated business landscape in China,” says Thirman.

The combination of a deep understanding of Western business practices combined with a local U.S. front-end is invaluable to customers such as AirPrint, a company eager to reduce the risks associated with outsourcing and one which expects strong project management, fluid communications, and high-quality, reliable customer service.

How the two work together

The two partners created a two-pronged business strategy designed to ensure that the management processes remain in Boston while sending the product development work to Dextrys’s China location. As a result, AirPrint’s U.S. team works closely with Dextrys’s U.S. team. “All of our relationships on the business side are with American executives,” says Thirman. He says he checks in with Keane “frequently.”

Keane says Dextrys’s model is to have a minimal on-site presence coupled with a “tight development process.” His Chinese teams do most of the work. Currently there is a dedicated team of engineers in China working on AirPrint’s software development.

Thirman says teams from both companies spent months planning the transition of work. “We wanted to make certain things didn’t get lost in translation.” Keane points out that Dextrys had to clearly understand AirPrint’s vision and direction before initiating development of Airprint’s product.

Today, using Skype conferencing technology, AirPrint’s vice president is able to work with the Dextrys team from 9:00 p.m. to midnight. The two teams use whiteboards to display their notes and diagrams during conference calls. The partners also use e-mail and text messaging “in a highly interactive process.” Thankfully, “the technology exists today to allow small companies like us to conduct essential business and offshore effectively,” says Thirman.

Early benefits

Thirman is pleased with the little things. For example, he’s impressed with the strong work ethic of the Dextrys team. He likes the idea “they really care” about this project. “I’m surprised that they are as invested in this project as I am,” he says.

“We care about the opinions of our Dextrys colleagues and value their perspective, which is insightful,” says Thirman. China, he points out, is a culture more oriented to mobile technology than America. He reports the Dextrys team has offered suggestions that have made the product’s interface more user friendly based on their “on the ground” experience in the United States and China. “As a result, the product will be easier to use in the American market and more conducive to the Chinese market. We couldn’t have done that without their input.”

Keane boasts of an extremely low employee turnover rate (seven percent) among his China-based engineers, which is far lower than the national average. While engineers in India tend to job hop because of the high demand, “this isn’t true in China because the supply is much larger than the demand at the moment.”

In an effort to make business practices seamless, English is the primary language of commerce. Dextrys requires that its Chinese engineers speak and write English fluently. In addition, the company offers professional development courses to help employees meet these expectations, notes Keane.

In fact, many of Dextrys’s middle managers either earned an American college degree or worked for U.S. companies before relocating to China. “They came back to participate in ‘the China Miracle,'” Keane continues. This becomes useful because “they understand American business practices.”

Keane says offshoring has “become a new best practice for start-up companies.” Profitability for smaller start-ups becomes more difficult as product time to market is delayed. Therefore, “the focus for the start-up lies in product conception and architecture, while outsourcing partners such as Dextrys provide access to cost-effective talent to complete development.”

Would Thirman offshore with Dextrys again? “Absolutely! Dextrys has become an essential extension of our business team. Dextrys has been able to accelerate our time to market while simultaneously offering us a gateway into the massive Chinese consumer market.”

Lessons from the Outsourcing Journal:

  • Start-up companies such as AirPrint are using their key personnel to design a project but rely on offshore partner, Dextrys, to efficiently and effectively bring their product to market. This is important because start-ups usually have “limited” finances. They turn to companies like Dextrys to help accelerate growth in revenue, market share, and profitability.
  • AirPrint was drawn to Dextrys due to its corporate structure. The partnership provided AirPrint with a U.S.-based executive team who understand and effectively implement American business practices, coupled with a local China presence and deep engineering talent in the region.
  • AirPrint is profiting from Dextrys’s local Chinese expertise to launch its technology to a sizable consumer market with an advanced mobile infrastructure. Dextrys’s U.S.-based executive team and China-based engineering team have also helped to expose AirPrint to China’s vast mobile marketplace.
  • The demand for mobile development talent is far outpacing the current supply in the New England area. AirPrint embraced an offshore solution with Dextrys to enhance and speed its product development.

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