Monthly Archives: March 2011

Outsourcing Offshore

Finding worthy topics to discuss was the highest priority when I started the Churchill Club 5 years ago, so I sought advice from a number of quite senior people on what they thought were issues that mattered to the technology start-up community. And like most advice in the world, it turned out to be horribly wrong. Eventually, I just started putting on events to discuss topics that I felt I would be prepared to pay to go to. Turns out, unsurprisingly, that I’m a good bellwether for events that matter to people growing new businesses.

So having decided to outsource some of the technology support parts of the Churchill Club business and not knowing how, I decided to have an event looking at outsourcing tasks offshore to get fast, quality service at the $10 an hour mark. The event focussed on using virtual assistants, sourced through products like oDesk and eLance. And as per the Churchill Club model, I got 3 experienced people on the subject to share their learnings – So here is what they came up with on selecting staff.

  • Start with simple, non-critical tasks until you get good at writing briefs and selecting people.
  • When you post your job you will get lots of responses and many won’t have even read the details of the job.  Therefore add something like, “write Banana in the first line of your response”.  If they don’t, ignore them.
  • Maybe split your tasks into two pieces and select 3 people to do say, the first 10% then select one to complete.  At this price it doesn’t matter there is doubling up.  Lots of mini tests when selecting, avoids heartache downstream.
  • Remember you can post a job but only invite one person to do the work if you want to test them further and still take advantage of the off-shoring website’s features such as payment escrow’s.
  • Avoid anyone who provides a generic response.
  • Always use people with a high rating.  But remember that people are comfortable adding positive feedback and are reluctant to add negative feedback so pay attention to the number of jobs that do not have feedback recorded against them.
  • Get sample work from all of your short list.
  • The supplier’s portfolio may look wonderful, however if it’s a large company, be wary – you may get the junior assigned to your project.
  • Consider outsourcing a portfolio of work to a consultant who then manages the outsourcing for you.
  • Consider outsourcing work to company, rather than an individual if you want something like cutting edge SEO knowledge.

The three speakers passing on their hard won lessons were Pete Williams, Alex Levashov and Linh Hoang , all of whom had thousands of hours experience with outsourcing work to individuals and teams al over the world. Turns out, unsurprisingly, that this question about outsourcing effectively was on a lot of other people minds as well, so I’m glad I asked the question.

Event Report – The 3D Printing Opportunity 17 Mar 11

My Event Report from the 3D Printing Opportunity 17-Mar-11

with

Andy Gelme – President, Connected Community Hackerspace
Travis Hardy – Market Development Manager, Formero
Milan Brandt – Professor of Advanced Manufacturing at RMIT University
Anthony Lele – Leaderof the Structured Ideation Process, Invetech

What is it all about?

At its simplest 3D printing could be described as using a printer to squirt plastic or metal in layers, building up an object in 3D. In reality though, Its one of a variety of accretive (adding stuff, rather than grinding it away etc) manufacturing techniques that first started to appear in the 70’s, but has gained recent attention due to reductions in cost and improvements in performance.

3D Printing means → You don’t need to spend $20-$30K on manufacturing a tool if you only want to do a short run or prototype. If you wanted 1 Million plastic cases, it is much cheaper and quicker to use an injection molding machine with appropriate tools. If you only wanted 200 though, 3D printing is the better option.

3D Printing is one of the rapid manufacturing technologies (which means no tooling is required in the manufacturing path). Rapid Manufacturing is generally suited to low quantity, high value manufacturing. There are competitors to 3D printing such as Selective Laser molding that meld powder layers to create complex, high quality objects that would be impossible to build any other way, such as a sphere within a void, within a sphere.

3D printing works with Metals and Polymers. Build time for small objects can be as little as two hours in a commercial environment, 25 minutes in a hobbyist envirnment.

There are a number of steps in turning a product idea into a 3d model, most of which are about digital manipulation:

  1. Create a 3D Model (Using proprietary software – or cheap/free software such as Blender Google Sketchup or Solidworks, or even use a 3D scanner to create a model).
  2. Convert your digital model into an STL file (built up from little triangles, without other attributes).
  3. Convert the STL file into 2D layers for printing (using a proprietary programme or software like Skeinforge).
  4. Your design is then passed as instructions to the firmware in the printer.
  5. The printer builds your object.
  6. The object is finished off.

What’s happening at the commercial end of the market

3D printing is no longer just a niche business in the manufacturing world, although it can drop the cost of a prototype from $30,0000 to a couple of $1,000
It is sensational for market testing. For instance Microsoft can create 20 different designs for its next Xbox and market test them before tooling up for a large scale production run.

  • Architects are using 3D Printing to create visual aids.
  • Dentists are creating bespoke dentures quickly
  • The medical implants community are now heavy users – there was around 12,000 different parts being manufactured in 2005, by 2009 there was 25,000 different parts being produced due to 3D printing.
  • Mechanics can use 3D printers to make rare spare parts.

Resolutions are improving all the time. Formero sells a machine that will do 16 microns, and in the Lab they are creating 4 micron machines. Current prices in the commercial world are:

  • A Selective Laser Melting Machine is currently worth around $1M
  • A Connex Digital Printer is around $300K
  • A Digital Scanner is around $500K

What’s happening at the consumer end of market?

Organisations such as Hackerspace are complimentary to the commercial end of the market. Its not full of hobbyists so much, but technologists running their own businesses who are exploring, learning and sharing in a non-competitive and normally open source environment. They tend to be first on the block to build machines such as the:

  • Reprap – the concept is an opensource printer that can build itself and costing around $1,000. RepRap was founded in 2005 by Dr Adrian Bowyer, a Senior Lecturer in mechanical engineering at the University of Bath.
  • fab@Home is another example of home 3d printers – it is currently being used to print food by one groups of experimenter.
  • Makerbot – a $1,000 3D printer that with sales of 3,500 is estimated to represent 10% of all 3D printers in existence.

These consumer level printers are allowing artists and inventors to explore what they can be used for.

Pairing a Makerbot with a $200 Microsoft Kinect (3D scanner) means that artists can experiment and do things such as creating ice cube trays of friends faces.

To create a working whistle on a Makerbot takes roughly 26mins with a printing resolution of 0.3mm

So what about the Medical industry?

We are getting older and more expensive to maintain. The demand for replacement organs has doubled, but supply hasn’t increased. We can’t regrow broken bits yet (note a first trimester fetus can regrow a finger, and infants can regrow a finger tip) So the concept of creating replacement body parts came into being (first talked about it 1937).

3D printers were originally though of as being useful to build structures to grow tissue on such as a bespoke cage to grow breast tissue on. However it was soon realised that they were an enabling technology for actually printing organic material. Printing arteries can happen right now (Invetech created this) and printing kidneys has been demo’d in the USA.

Issues

  • Growing cells outside the body and putting them back inside is hard.
  • Some cells are a lot harder to grow than others, eg liver and brains.
  • Tissue needs to grow with you – especially if implanted into a child.

A big question is – can we print in situ – ie directly into the area where bio materials are missing?

  • We need to do this very quickly then.
  • We need multidisciplinary teams to make this happen – eg mechatronics, cellular biology

Business Models

The rapid prototyping or manufacturing business model has been around for some time and is simply getting better, cheaper and quicker – but new models are appearing and being forecasted.

  • Individual World of Warcraft figures being transformed from digital creations to 3D creations, when purchased by the owner – 3D printing then mounted inside a glass jar.
  • Customising prosthesis and implants is accelerating the medical take-up.
  • Shapeways – An online 3D printing service (subsidised by Philips Electronics Incubator) is doing great business, if albeit unprofitable at this stage.
  • There is a need to create hybrid connectors – connecting common objects to rare objects such as mounting a common phone onto an old dashboard.
  • For businesses such as Zazzle that do bespoke printing on items such as T-Shirts, iPhone holders and Mugs, its the natural next step.
  • The SNAP printing model will appear with 3D printing and other “maker” solutions.
  • Businesses such as Fab@Home and Makerbot are profitable selling 3D printers and kits.
  • Glasses frames being printed, but not the actual lenses as yet.

Where is it going?

At the top end of the market – the price half life is now two years. Eg Eg $200K machine two years ago is now $100K.

At the bottom end of the market – innovations are doubling every two years. Eg Printer resolution goes from 1mm to 0.5mm.

There are organisations that are now effectively printing concrete and a group in britain that is working on printing houses.

Will there be a 3d printer in every house? Maybe not but certainly in poor communities in third world countries there will be enormous value in having a “maker” with a printer that can print out spare parts to conduct repairs.

Ceramics are on the path, although not being printed effectively as yet.

Plastic for printers is cheap = roughly $30 for 10kg.

Is it important to Australia?

HP obviously thinks so, as they have just invested in a number of 3D printing companies. The atom might not be the new bit yet, but its exciting.

In Australia there are 1M people employed in manufacturing, a sector that accounts for $37B in exports a year. Melbourne was historically the advanced manufacturing centre of Australia – Fishermens Bend was the place, and it even had its own airfield.

Thrre is a future in manufacturing but its about knowledge rich practice – creating textiles and products out of composites that exhibit new attributes. Not simply doing the 3D printing as the machine now contains the smarts so it can be located anywhere, even China.

RMIT has created an Advanced Manufacturing Precinct, focusing on Medical, Dental, Aerospace and Automotive.

From 7th June to 11June – The Pacific Additive Manufacturing Forum is on in Melbourne www.pamf.org.au

– end –

Creating Real Life

3D printing3D is fascinating to me at the moment. Not the insipid, head ache inducing versions being pedalled out at the cinema and on new TV’s, but the real life version.

Firstly I was fascinated with the Kinect. The Kinect, if you don’t know, is the game control system for the XBOX that Microsoft released. But actually, its a very low cost, roughly $190, reasonable quality 3D scanner. And for the first time in ages, Microsoft did something seriously clever by not reacting when open source drivers were released for the product, and allowing a Kinect Hack Community to develop. These drivers mean that the Kinect can be connected up to all types of computers and used for some seriously creative outcomes. Consider the mindblowing, live 3D movie experience delivered by Oliver Kreylos in this clip .

Secondly, I became fascinated with 3D printers, so much so that I am running a Churchill Club event around them tomorrow. For as little as a $1000, you can pick up a machine that will print thin layers of plastic to create whatever object that you have designs for. These devices are getting better all the time and soon we may have a situation where you don’t need to to ship in car parts, art, toys and even the machines themselves. You simply buy or create the digital design and get it printed out locally. Innovative communities such as the Connected Community Hacker Space are importing these machines and finding out what problems you can solve with them. Have a look at the video here of a 3D printer, connected up to a Microsoft Kinetic, being used to print out little people on the fly.

Thirdly, I became fascinated where these 3D printers are actually going. Have a look at this TED video where living cells are used in a 3D printer to create new organs. The video shows a fascinating attempt to print a kidney! Although not completely possible just yet, Organic material can be printed and Australian firm Invetech has been involved in actually printing blood vessels!

So just when every one is talking about the digital economy being everything, computing starts creating real life as well.

Event Report – Outsource Offshore 10-Mar-11

From the Churchill Club event of 1oth March 2011

With

Pete Williams – Founder, Preneur Marketing
Alex Levashov – Principal, Altima Interactive
Linh Hoang – Owner, Red & Black Solutions

Notes by Brendan Lewis

What are we talking about here?

In simple terms, outsourcing offshore means you can:

  • Build an validate web based business quickly and cheaply – e.g.   Have the idea, knock up a wireframe of the website, and have it produced in a week  by people being paid less than $15 hour.
  • Become vastly more productive. – For instance , spending an hour per day per person, managing people doing your work for you at a lower rate, means that you could be profitably producing 64 hours of “your work” a day.
  • Have a VA (Virtual Assistant) at $6ph in the Philippines rather than a PA (Personal Assistant) at $30 ph in Melbourne.

Firms in the western world, e.g. Australia, the US, the UK, Canada are using foreign workers every day to perform tasks cheaply (e.g. bookkeeping at $4ph being resold at $200ph).  www.ODesk.com (a website for finding and managing outsourced workers) has had US$2.6B of revenue go through it since it opened its doors.  It currently has around 1M freelancers in 250 countries offering their services.

Outsourcing offshore isn’t just accessing cheap labour though, its about what Tim Ferris calls Geo arbitrage.  Accessing:

  • A global talent pool.
  • Workers in different regions who will work whilst you sleep.
  • Workers who have full time jobs, but may wish to supplement their income and have available capacity.
  • Workers who will work for a much lower rate than locals.
  • Workers in countries where currency fluctuations currently make their rates cheaper than yours.

So its not just the $4 an hour crowd, you could be paying part time workers $500 a week.

Web based recruiting and management tools like:

  • http://www.odesk.com/
  • http://www.elance.com/
  • http://www.vworker.com/
  • http://www.remotestaff.com.au/
  • http://www.onlinejobs.ph/

and many others are being used every day by Australian entrepreneurs, professionals and SMEs.

What Options do you have?

You really have 3 of options.

  1. Outsource a project or task to a freelancer.
  2. Outsource a project or task to a company.
  3. Outsource operations by build your own team of part timers or full timers.

Depending on what you want to do, your approach to selecting and managing people will be different.

The question was also raised, “when would you use a crowdsourcing site like 99designs.com in preference to outsourcing offshore?”  The answer was it depends what you want.  Crowdsourcing is generally a lot more expensive (although still cheaper than engaging a local) however you will get more design options, new ideas and fresh approaches.

You really do need to have:

  • Clarity of thought about exactly what you want to achieve.
  • Develop the skills to manage the relationship you want.
  • Be prepared to experiment,  learn, and get better.

Normally anyone who starts the process simply trying to get $4 an hour workers will get burnt through poor quality work and not recognising the risks that are inherent at the price point.

On selecting Suppliers

Selecting the right supplier can be difficult.  Some overarching points.

  1. Expect to make mistakes and learn, not get it right first time, so try some small non-critical tasks first.
  2. Don’t expect perfection.  If the resources were good at design/marketing/reading your mind, its unlikely they would be working for $4 an hour.
  3. Hire for existing skills, not for someone you need to teach how to do the job.  However when you are employing permanent staff, you need to grow them with training.
  4. Keep your promises – these people are concerned you will try to rip them off.

In terms of specific supplier  selection advice.

  • Start with simple, non-critical tasks until you get good at writing briefs and selecting people.
  • When you post your job you will get lots of responses and many won’t have even read the details of the job.  Therefore add something like, “write Banana in the first line of your response”.  If they don’t, ignore them.
  • Maybe split your tasks into two pieces and select 3 people to do say, the first 10% then select one to complete.  At this price it doesn’t matter there is doubling up.  Lots of mini tests when selecting, avoids heartache downstream.
  • Remember you can post a job but only invite one person to do the work if you want to test them further and still take advantage of the off-shoring website’s features such as payment escrow’s.
  • Avoid anyone who provides a generic response.
  • Always use people with a high rating.  But remember that people are comfortable adding positive feedback and are reluctant to add negative feedback so pay attention to the number of jobs that do not have feedback recorded against them.
  • Get sample work from all of your short list.
  • The supplier’s portfolio may look wonderful, however if it’s a large company, be wary – you may get the junior assigned to your project.
  • Consider outsourcing a portfolio of work to a consultant who then manages the outsourcing for you.
  • Consider outsourcing work to company, rather than an individual if you want something like cutting edge SEO knowledge.

On Countries

The following experiences on countries for outsourcing to was offered.

Just because its overseas, doesn’t mean its inherently more risky.  You are just as likely to get ripped of in Carlton as in China

China – not particularly risky, just difficult to communicate with. Some great software engineers and designers.

India – Very formal British style English that sometimes can be difficult to understand.  Low cost.  Indian software engineers are very good but can be difficult to deal with and are very pushy.  Some of the panellists would not deal with Indians at all, due to the high incidence of scams.

Pakistan – Considered to be much easier to deal with than India, but similar apart from that.

Philippines – Low cost assistants with good American style English.  Roughly the same time zone as Australia

Spain – Has some great designers, but not particularly cheap.

Ukraine – The Ukraine has excellent technical universities and consequently very high quality software engineers.  In general terms dealing with people from the Ukraine was considered less problematic than dealing with engineers fro Russia.

USA – Has some great designers and software engineers, but not cheaper than Australia.  The chances of running into a scammer are high.

Payments & Pricing

Choosing Fixed Price versus Time & materials is complex.

  • Buyers generally love fixed price, but the supplier then wears the risk and prices higher  accordingly.
  • Buyers generally hate time and materials as they wear the risk, but they generally get the project a lot cheaper.
  • Different skills are required by you to manage a fixed price project (scope creep) compared to hourly rates (briefing effectiveness).

As a general rule:

  • Outsource a task = Fixed Price.
  • Outsource repetitive tasks = Piece Rate.
  • Outsource operations = Time & Materials.

When outsourcing a large, fixed price contract, Milestone payments are the norm.  In general terms 25% and 25% on completion.  Other payments will be matched to delivery of relevant milestones inside the project.  e.g. 10% on sign off of the detailed design specification.

A good method of determining whether you have the right price is to post a job at two different prices and see whether the number of applicants drops off.  e.g. Post a job at $2,000 then post it at $200.  If you only get say 25% of the applicants you know that $200 is too low, if you get the same amount of “real” applications, then you know $2,000 is too high.

Don’t expect to get the best prices when you start out.  See it as a learning process, and you will be able to access better prices as you become more skilled in selecting, briefing and managing outsourced suppliers.

Payment methods should always be discussed up front because the transaction fees will be material to the supplier these lower rates.  e.g. O’Desk charges a 10% commission.  It can be extremely difficult to pay people if your bank won’t talk to their bank.  Paypal however is a common solution.  Recruitment companies can be used as payment intermediaries if you are using one.

How to manage offshore projects

The three key skills of an effective outsourcer are:
1. They do their research and no exactly what they want to achieve.
2. They learn how to manage outsourced teams.
3. They see the process as a learning curve, they practice and get better at out-sourcing.

So how do you specify your website idea, when you are not an IT professional?

If is a simple website:

  • Create simple layouts (wireframes) of every page in PowerPoint or keynote, or take photos of drawings and send them through.
  • Draw out the work-flow by hand (and photograph) or with a tool and send via email.
  • Use partially free tools like http://www.jingproject.com to record the computer screens you like the look of, with your audio commentary – and send the resultant video off.
  • Make sure you go through design samples of what you like and don’t like.
  • Focus on the outcome or results, not the process.

If it is a complex website:

  • Hire yourself a project manager or architect to work with you to write up the spec.
  • Create a detailed specification as possible.
  • Use tools like
  • A good developer or development company will deal with inadequate briefs by asking lots of questions. They also do this if the brief appears not to make sense. (e.g. build facebook, why would you do this?)

How to Manage Offshore Staff

Offshore staff need clear simple instructions on the performance of routine and non-routine tasks.

At the end of every day, Pete gets an email that says 5 things.

  1. What did you set out to do today
  2. How long did you estimate it would take and how long did it actually take?
  3. What didn’t you achieve and why?
  4. What do you need need from me and by when?
  5. What are you planning on doing tomorrow?

Two great iPhone based tools for responding to emails on the fly or giving directions when you are out enjoying yourself are  www.Dictamus.com and www.SayItandMailIt.com  Both allow recording then email with recording attached, to either  a default address or selected email address.  Dictamus also allows the recording to be automatically FTP’d or sent to DropBox.

Minimising problems

When developing a relationship with a potential O/S staff member, the following process helps.

  1. Select someone to perform a task.
  2. Post another task, but invite only them.
  3. Hire them part time.
  4. Hire them full time.

Accept that if anything goes wrong, its your fault for not briefing properly and not making the system full proof.  Really good people (designer/developer/marketer) won’t be available as they will be living in the USA making $125K+ p.a.

Understand what regular tasks you wish to outsource to someone.  Otherwise in week one they will work 40 hours, week 2 they will work 2 hours, week 3 you fire them.

Don’t allow access to your personal email, instead  setup forwarders or share a separate IMAP folder with your Virtual Assistant.

Don’t give anyone access to your credit card – instead issue a Visa debit card that you can top up with the amount that your VA needs to have, and you are comfortable losing if things go wrong.  http://mycanvascard.com offers this service.

Organisations such as oDesk automatically handle things such as IP ownership and Non-disclosure Agreements.

Rather than getting someone to implement new software for you, use the “share your screen” option in Skype to have them talk you through the implementation.  That way they don’t get access to your passwords.

Change your passwords regularly.

Let your offshore staff in on the big picture so they feel comfortable (they are also nervous about being ripped off). Invest in them via training to create loyalty and a sense of team. There is plenty of cheap online training around at places such as www.learnable.com

And those links again were…

Web based recruiting and management tools like:

and many others are being used every day by Australian entrepreneurs, professionals and SMEs.

Use partially free tools like http://www.jingproject.com to record the computer screens you like the look of, with your audio commentary – and send the resultant video off.

To manage a complex website, use tools like

Two great iPhone based tools for responding to emails on the fly or giving directions when you are out enjoying yourself are:

Use Visa Debit Cards from organisations such as http://mycanvascard.com/

Offering cheap online training from resources such as www.elarnable.com builds staff loyalty.

– end –

unHacking Social Media

Famville ChickenIf a friend sent you a chicken as a gift online, would you click on it?

My use of Twitter has become somewhat patchy, as demands on my time increase. However I did come across something that caught my eye, someone tweeted

“WOW! You can see WHO VISITS your TWITTER profile. That’s cool! :) ”

Immediately followed by

“I just viewed my TOP20 Profile STALKERS. I can’t believe my EX is still checking me every day”

For reasons I can’t fathom, I casually clicked on the link supplied, and inadvertently gave a third party application access to my account, which then tweeted the same messages as above, but from me!

This type of spam is now going on all the time in Social Media, especially with Facebook and Twitter. Third party software makes social networking great, however it needs access to your account details to operate. You don’t want to get rid of it, because then you wouldn’t be able to do things such as tweet from your iPhone, or get updates of whose birthday it is this week on Facebook. Unfortunately to make it work for the good apps, it also has to work for the bad apps such as the FOLLOW YOU spam that caught me.

To fix this is easy, and also a little frightening.

In Twitter : Goto Account | Settings | Connections and then revoke access for anything you don’t want accessing your account.

In Facebook : Goto Account : Privacy settings | Edit your Apps and Websites Settings (bottom left corner) then remove the unwanted or spammy apps by clicking the x against each one.

In LinkedIn : Goto Settings | Groups, Companies & Applications | View your Applications then select the ones you don’t like and click the remove button.

The frightening part is how many apps over time I had inadvertently given access to my account. Although I was using only a handful, 39 different apps could access all my details on Facebook, including items such as the delightfully labelled “Vibrating Hamster”! Any of these could be sending out messages on my behalf, which I wouldn’t notice unless I was vigilant.

I don’t want to to have to give up Social Media, so have decided to diarise a task every three months, to check 3rd part application access to my social media. The definition of Spam maybe somewhat subjective, but if nothing else I want to make conscious, informed decisions about what I do on social media.

And yes, if you clicked on the chicken when it was sent to you on Facebook, you become a player in the Farmville Game, automatically allowing Farmville access to you account with right to update your status on your behalf. Not my thing at so many levels.