Transcript: The Outsourcing Playbook Gets an AI Rewrite: Engineering in the Age of AI and Global Teams
0:00 Brad What we're really talking about is the need for communication and shared understanding of how a system works.
0:05 Brad When you have people who are in different locations,
0:08 Brad how do you get them to work together effectively?
0:28 Brad Welcome back, everybody,
0:29 Brad to another episode of How Many CTOs Does It Take?
0:35 Brad And in this case, it's how many CTOs does it take to find software engineers to work with you or with us who live in another country,
0:44 Brad as they say offshore or outsource or near shore,
0:48 Brad all those things.
0:50 Scott Or maybe not necessarily.
0:52 Scott offshore but even just outside of your company like
0:56 Brad Yeah.
0:56 Scott agencies consulting firms right like that's the thing i want to talk about is when we as a cto or when an entrepreneur who's got an idea basically uses an outsourced firm
1:17 Scott What are the pros and cons of that?
1:19 Scott What are the risks of that?
1:21 Brad I
1:21 Scott That's what's on my mind.
1:24 Brad have had, I would say, three experiences using outsourcing.
1:28 Brad They are very successful,
1:31 Brad somewhat successful,
1:33 Brad and not successful.
1:35 Scott Wait, I thought it was one of the possible answers, complete and utter failure.
1:42 Scott Or is
1:42 Brad I
1:43 Scott that
1:43 Brad have
1:43 Scott under
1:43 Brad that.
1:43 Scott not successful?
1:44 Brad That was under not successful. I have had the complete and utter failure a long time ago,
1:50 Brad and I've learned along the way, but I feel like I haven't got it nailed.
1:55 Brad And I feel like I want to learn from some people who have got it.
2:00 Brad Let me tell you what I feel like I do have figured out.
2:04 Brad There are a handful of, there are probably many firms out there, but I know of one that I go to, which.
2:10 Brad essentially is a group it's almost a collective it's a group of about 20 staff level engineers and they charge like that too it's not a bargain but when I work with when I know I want something done and I want it done well those are the guys I call because I know that I'm going to get people who are not order takers but who are bringing something to the table
2:35 Scott Yeah.
2:35 Brad And then I've had an experience where we set up like an office in Europe,
2:42 Brad in Eastern Europe,
2:43 Brad maybe Central Europe.
2:44 Brad I don't know. It was in Romania. Do they call that Eastern Europe or Central Europe?
2:47 Brad I'm not sure,
2:48 Brad but it was in Romania, whichever Europe that's in.
2:52 Brad And so we,
2:53 Brad and that was like a long-term commitment, you know, 10,
2:57 Brad 15,
2:58 Brad 20 engineers for.
3:00 Brad a year i mean multiple years um and there were pros and cons that very talented engineers um fully you know dedicated to us like each individual was hired to be on our team so it was like they're really building a team for us um but then the time zone was a killer really Yeah. hard
3:18 Brad And ultimately,
3:19 Brad at that company,
3:20 Brad we had ended up buying a company that was based in Barcelona.
3:24 Brad So those engineers in Romania started working with the engineers in Barcelona and that it wasn't such a big deal.
3:28 Scott Solve the time zone problem.
3:30 Brad It's called the time zone problem.
3:32 Brad And then I've had some experiences that are like what I would call staff augmentation where you get individual engineers,
3:40 Brad sometimes you get them through an agency,
3:41 Brad sometimes you get them.
3:43 Brad just individual view of the street and you just embed them with an existing theme.
3:49 Scott I okay so I might here's my list of kind of like experiences using these sort of like various outsourced teams so
4:01 Scott I have had a team that was a full-fledged engineering team given a specific project that was in India.
4:13 Scott And that was a team that we kind of like shopped around,
4:18 Scott found a team,
4:19 Scott selected them,
4:20 Scott you know, flew to India and met with them. And, you know, they were.
4:25 Scott pretty solid and they had you know solid leadership um i've had um i worked for a company 20 years ago that actually had outsourced team that was in syria uh this was 20 years ago so it was before um you know all of that um
4:44 Brad Yeah,
4:44 Scott yeah
4:45 Brad Civil War.
4:45 Scott um and um and then interestingly enough
4:51 Scott Because that Civil War in Syria is a great example of a thing that happened.
4:56 Scott I also had an outsourced team that was in Ukraine and they were very top-notch engineers doing great work and then boom,
5:04 Scott Russia attacked.
5:07 Scott And so that was a great example of, you know, the types of things that you,
5:13 Scott I almost have like,
5:15 Scott you know, is that something that is on my list?
5:19 Scott My engineers might actually have to like shelter in place like that's
5:24 Brad Mm
5:25 Scott so
5:25 Brad -hmm,
5:25 Scott and of course, there's plenty of places in the world where that's like a reality.
5:31 Scott Right.
5:31 Scott I mean, fantastic engineering teams in in Israel doing amazing things.
5:38 Brad mm-hmm.
5:39 Scott uh i've had plenty of teams that i've worked on where we did the staff augmentation thing you know where it's like oh you've got like a kind of a you know engineers for hire and they just kind of come in and start working on the team and you're they're mostly like a expensive employee because you're you're essentially paying hourly plus the extra add-on for the agency right
6:05 Scott And then I've worked with agencies that are like, like you said,
6:08 Scott kind of like the staff level engineers or agencies where it's like they kind of do a whole project,
6:14 Scott they assign their project leader,
6:17 Scott which is usually a kind of a staff level product and engineering architect expert,
6:23 Scott and then they have.
6:25 Scott you know, different grades of engineers working for them and you give them the whole project.
6:29 Scott And so those are kind of the mix of things.
6:32 Scott Now,
6:32 Scott as a fractional CTO, I've ran into, I've been called many times, like more than once I've been called by an entrepreneur who's like,
6:41 Scott hey,
6:42 Scott I have my MVP kinda,
6:44 Scott I used this outsourcing team in, you know, name a continent.
6:50 Scott uh it's buggy and it's and they're slipping and they can't give me you know they can't um i'm struggling to get results out of them right
7:00 Brad Mm
7:00 Scott and
7:00 Brad -hmm.
7:00 Scott um so
7:06 Scott that's kind of the stuff that's on my mind is i think
7:09 Scott Like that, that, that, that particular question is really,
7:12 Scott I think, quite perplexing because I think it's very closely related to what we're about to see with these, you know, vibe coding things where it's like the person that's the product owner,
7:24 Scott like they can get far enough to like describe the thing. Like I almost feel like maybe we should think of vibe coding as like the.
7:34 Scott The sort of like game of telephone,
7:36 Scott distant engineering team that if you're not technically capable of sort of validating or verifying their work,
7:48 Scott that can get you in trouble.
7:52 Brad Mm
7:52 Scott What
7:52 Brad -hmm
7:52 Scott do you think of that? What do you what do you have you seen that where essentially like the business owners who aren't strong technically kind of can get.
8:04 Scott I'm not suggesting that they're like in any way nefarious intent by these outsourced teams.
8:10 Scott But, you know, if you if you have that, if you don't have that like bridge of communication,
8:15 Scott you can it just feels to me like you can get really, you know, kind of stuck in churn.
8:20 Brad Yes, I've talked to several people who have had that problem and I feel
8:26 Brad um sad for them sometimes and they're not getting swindled necessarily but they spend a lot of money and a lot of time and they don't get working software i had this idea once i wanted to write a book called how not to build a website and it was cautionary tales for people i'm thinking of a particular friend who inspired me like she spent easily a couple hundred thousand dollars on having someone build something for her that never really worked
8:51 Brad Um,
8:52 Brad and do I believe that the engineers she hired were totally incompetent?
8:58 Brad I don't think that's probably the case,
9:00 Brad but somewhere something got lost in translation.
9:03 Scott Yeah.
9:04 Brad And there's also the piece, especially if you're doing an online type of thing where if you're a non-technical person trying to hire a firm.
9:13 Brad You also, someone has to operate it after it just you can't just build it, be done and like here's your website or here's your mobile app and it's
9:21 Scott Right.
9:21 Brad over with.
9:21 Scott Right.
9:23 Brad And that's often a puzzle I've seen people get from some puzzle but a situation I've seen people get themselves to which is like,
9:30 Brad okay I got this I build it, they built it they put it on this server for me that was 18 months ago,
9:36 Brad and now it doesn't work or I'm getting this error.
9:40 Scott Right.
9:40 Brad and what do I do they're saying I need to do this that or the other thing I
9:45 Scott Or hire them again.
9:46 Brad mean yeah higher than that's what I mean by this that or the other thing higher than again that's exactly what I meant to say about uh there's a dimension I haven't experienced though probably at least the last 15 years
9:59 Brad which is you know working inside companies that have gotten a little bit bigger you know the company i'm at now is not acceptably big that's 500 employees or so give or take a little bit um and the business people say well couldn't we move some of this engineering from san francisco and seattle and you know the we hear about these places they're cheaper right the philippines or india or
10:24 Brad probably ukraine or mexico or wherever and i would love to do that and i would love to do that not as much to save the company money which i would like to do but hey boss i didn't mean that what i meant to say was i definitely want to save you money no what i mean to say is i found you can sometimes just get more people for the same amount of dollars right so i can get more done which is what's important to me
10:50 Brad And I feel like I haven't totally cracked that nut yet,
10:52 Brad with the exception of the case where we put a long-term investment into Romania and really got that to work.
11:05 Brad I haven't quite figured that one out yet.
11:07 Brad Well,
11:07 Brad the challenge with Romania was the time zone.
11:09 Brad So I haven't really figured that one out yet in a closer time zone.
11:12 Brad And the reason the Romanian firm worked is because we hired a guy who had come to the United States from Romania.
11:18 Brad And we were saying, hey, we were thinking of hiring some contractor. He's like,
11:21 Brad well, hey,
11:21 Brad I know these guys at this firm. That's where I used
11:23 Scott By
11:23 Brad to work. They're all great.
11:25 Brad Right. So we
11:26 Scott the way,
11:26 Brad had.
11:26 Scott that's interesting that you say that because that particular pattern.
11:31 Scott of a local person who you are able to interact with and know and trust like you you can validate their bona fides right bona fides and then they essentially have developed
11:49 Scott affirmed they're essentially signing their name to as far as quality goes right in
11:54 Brad Yeah.
11:55 Scott some location that's exactly the pattern that i had successfully work when we had a strong outsourcing team in india and we had the strong outsourcing team in syria and the strong outsourcing team in ukraine so like in all three of those cases they were that kind of a they were that kind of a relationship where they had strong
12:15 Scott verifiable U.S. leadership that then moved back and was co-located with the team, managing that team, hiring that team,
12:27 Scott vetting that team,
12:28 Scott vetting their processes.
12:31 Brad That isn't quite what happened with us. We kind of had the opposite.
12:34 Brad Let's call him John.
12:35 Brad He worked there. He was Romanian.
12:37 Brad He worked there.
12:38 Brad He came to the United States.
12:40 Brad We're sitting around. We hired him.
12:41 Brad He applied for a job.
12:43 Brad We hired him.
12:43 Brad He's a very talented engineer.
12:45 Brad We're sitting around one day saying,
12:46 Brad hey, we need to hire a contracting firm.
12:48 Brad He said, well,
12:48 Brad I used to work for a contracting firm in Romania.
12:51 Brad And they were all good engineers.
12:52 Brad We trusted him because he was a good engineer.
12:54 Brad Right. And he made the introduction.
12:56 Brad So with a little bit of the reverse,
12:57 Scott but I
12:57 Brad it's still
12:57 Scott think there's this is
12:58 Brad a a person
12:58 Scott similar.
12:58 Brad of out.
12:58 Brad It's a person of out, really.
13:00 Scott That's the part that's the part that I think really matters.
13:03 Brad Well,
13:03 Brad I'd love to get some other people on here and talk about how they've made it work.
13:08 Brad And we could talk about all the different dimensions,
13:09 Brad whether it's agencies or individuals or building teams. I'd love to figure out how to build teams in South America and Mexico.
13:16 Brad Things like that. It's the kind of thing I'm doing right now is a real leverage point.
13:21 Brad If I could stretch, just like people are trying to stretch their dollar with AI,
13:25 Brad I can stretch my dollar with, you know, I can hire one engineer in San Francisco or two engineers in somewhere else
13:32 Scott You know, it's so
13:33 Brad in
13:33 Scott interesting.
13:33 Brad the Western Hemisphere.
13:35 Scott Yeah,
13:35 Scott it's so interesting,
13:36 Scott right?
13:36 Scott Like, what is the overlap with this and AI assisted coding?
13:41 Scott I think there's a lot of overlap.
13:46 Scott The
13:46 Brad Agreed.
13:46 Scott first one is at a simple level,
13:49 Scott right? Like your point you made is capitalism constantly is about how can you be more efficient,
13:58 Scott right?
13:59 Scott And so, you know, again,
14:01 Scott I was just talking to this.
14:03 Scott uh fractional CTO client uh yesterday and I was like look you know eventually the CEO you as the CEO you're always going to say like how come my engineers can't build stuff faster right like I want to build things faster like that happens everybody asks that question and so that's all about efficiency right that's whether that's
14:24 Scott I need and I want to build faster without paying a lot more,
14:28 Scott right?
14:29 Scott Like I can't necessarily increase my burn by to build faster.
14:33 Scott And so anything and everything that helps us build faster with less burn is something that we're going to want to try as CTOs, as advocates for the business of building these things.
14:47 Scott And so AI is one of those things. And then essentially.
14:54 Scott more affordable labor is another one of those things and
14:57 Brad Right. Yeah.
14:58 Scott no
14:58 Brad Go ahead. You're going to say it.
15:00 Scott well what I was going to say is what I think what the part that I think is also related to this is just that I
15:09 Scott don't want to say you get what you pay for because that's not that's not what I I believe but I think it's very difficult to avoid the fact
15:19 Scott That you still need someone who knows how to vet and verify and lead and audit and manage all of those engineering choices that happen,
15:32 Scott because that's
15:32 Brad Mm-hmm.
15:33 Scott where the problems come,
15:35 Scott right? That's where the tech debt comes from.
15:37 Scott That's where the failures come from. It's the oops,
15:40 Scott we made the wrong decision.
15:42 Scott And who's?
15:44 Scott on the hook for that and
15:45 Brad Right.
15:46 Scott that's the that's the common thing i see in these these
15:51 Scott these like uh sort of like outsourced type solutions is that's where it can go wrong you even said it yourself right like you use a team that's all staff engineers so you know that you're going to get what you want
16:03 Brad Yeah,
16:03 Brad I'd say the tradeoff there,
16:06 Brad whether it's AI or lower cost is.
16:10 Brad essentially the quality of the code and the quality of the technical design and that's not a commentary on the people i would say it's mostly a commentary on lack of especially younger less mature companies commentary on the lack of understanding exactly what they're doing having to you know because they're coming into a place with you know just institutional there's just tribal knowledge they don't have institutional knowledge
16:37 Brad Um,
16:37 Brad and you know, you know, like in the case, I mean, now very monolithic system is very hard to come in and work on when it's all institutional knowledge or tribal knowledge.
16:46 Brad And so I imagine like I have this dream,
16:50 Brad I'd love to hear if somebody succeeded at this dream,
16:53 Brad which is, hey,
16:54 Brad we have we have a service oriented architecture,
16:56 Brad and we have this team in Mexico City that owns Service X and it does whatever it does.
17:03 Brad does and that's their thing we've got this other team and I don't know Santiago Chile I'm making these locations up I mean there are real locations but I'm picking them out of thin air and you know they own service why and I have this idea that that might work
17:23 Brad But it means a commitment to those areas because you're saying,
17:26 Brad hey,
17:26 Brad the ServiceX team is going to be in Mexico City and it's not just like, oh, we're going to hire them for three months.
17:32 Brad And so we're making a commitment to having, as a company, we're making a commitment to have a presence in Mexico City,
17:37 Brad whether it's a owned and operated commitment like we hire people or just a vendor commitment where we.
17:42 Brad Not employees there, not employees, but contractors there.
17:45 Brad I have a hypothesis that could work, but I've never made it work, and I'd love to talk to someone who has and how to do it.
17:51 Scott So I totally agree,
17:53 Scott and I think that's a great,
17:54 Scott let's put that out there.
17:56 Scott Hey,
17:56 Scott listeners,
17:57 Scott if you've done this before, we would love to talk to you about this.
18:00 Scott And I think that if I kind of like circle back,
18:03 Scott like what are the topics that were sort of like.
18:08 Scott scratching at right well one of those topics is a time zone distribution right like that that can be a problem whether they're in-house employees that just happen to work for mega corporate
18:25 Brad 100%.
18:25 Scott or their individual contractors so that's like a piece of this puzzle
18:31 Scott you kind of describe an architectural approach to it like service you know service-based architecture or like microservices or something like that where maybe you're like hey let's give you an area let's give a group an area of concern and that allows us maybe to reduce the amount of overlap and back and forth right and that that might that's a strategy that can apply
18:57 Scott regardless of whether they're outsourced in-house,
19:00 Scott time zone shifted or not, right?
19:03 Scott So Yeah, that might be
19:04 Brad yeah.
19:04 Scott a really important part about this,
19:06 Brad right? What we're really talking about is the need for communication and shared understanding of how a system works,
19:12 Brad whether they're contractors or full-time employees.
19:16 Brad I mean, that's just a legalism of how someone gets paid, right?
19:22 Brad what we're really talking about is how do you have teams this gets the remote team the remotes and hybrids of the world right when you have people who are in different locations
19:34 Brad how do you get them to work together effectively um and so much of this job is communicating believe it i mean people don't you know people say oh engineers they just like to talk to computers they don't like to talk to people that's why they're a soccer programmer but it's so much about it is
19:49 Brad understanding shared understanding it's just it's
19:52 Scott Yeah,
19:52 Brad like the whole thing
19:54 Scott 100% every single retro part of it has to have that topic in it, right?
19:59 Brad We understand what we were building.
20:01 Brad It's always on there.
20:03 Brad And I think that last point is kind of one of the reasons I reached out to you for this conversation today is I've also noticed that that challenge of shared understanding is particularly challenging if you don't have that strong Rosetta
20:25 Brad Stone voice.
20:26 Brad And you and I have talked about so much about the job of a CTO or the job of that engineering leader is to be that translator between the business requirements and
20:37 Scott Mm-hmm.
20:38 Brad the technical team.
20:40 Brad And that's all about shared understanding. That's all about communication.
20:43 Brad And it's about being able to do that communication across these two,
20:49 Brad you know.
20:52 Brad colloquial languages right and
20:55 Scott Mm-hmm.
20:56 Brad that's where i've seen this this process blow up right the the go get them energetic business owner non-technical ceo product person who is like yeah i'm gonna hire a firm and then that gets away from them i think maybe because they don't have that champion
21:18 Scott Everybody forgets.
21:20 Scott The key in this is the role of product management,
21:24 Scott whether you have product managers or not, right?
21:27 Scott The role of product managers and the role of tech leads,
21:29 Scott right?
21:30 Scott The people who figure out what's the thing that we're going to build and how do we translate that from an idea into a software plan like those, everyone just wants to hire a software engineer.
21:41 Scott Can you hire someone that codes for me?
21:43 Scott It's like, sure, I can hire a guy that hits nails into a two by four,
21:46 Scott but you actually need the architect and the engineer to tell that person what to do.
21:51 Brad Yeah,
21:51 Scott And that's, it's like, it's so fascinating about our industry. Everyone focuses on how many carpenters do we have when the thing that really builds
22:00 Brad right.
22:00 Scott you good houses and accelerates your building of houses are.
22:06 Scott The architects and the geotechs and the structural engineers and all those kinds of things.
22:12 Brad And so the part about this that I kind of gravitate back to is, to your point,
22:18 Brad it's really important that you have that architect.
22:24 Brad And I wonder,
22:26 Brad are there parallels to the way that, you know, outsourced engineering teams, agency-based engineering teams, those are not new.
22:34 Brad Those have been around for a long time,
22:36 Scott Mm
22:36 Brad 15 years
22:37 Scott -hmm.
22:37 Brad easily,
22:38 Brad 20 years, right,
22:39 Brad depending on the language that you're playing with,
22:43 Brad right?
22:45 Brad And is there a parallel with...
22:48 Brad the sort of the architect that somehow is running the minions of AI agents.
22:55 Scott Right.
22:55 Brad Right.
22:56 Brad Like, is that is that actually the next job?
23:00 Brad Is that is that really, you know, you and I were talking like, what do we how do we coach young people coming into industry right now? Right. Is the is the thing that we need to be coaching people on is look, it's really about how many carpenters can you orchestrate effectively?
23:16 Scott Yeah, yeah.
23:19 Scott Well, I think there's another thing that I think I hear you getting at, which is if we can talk to people who've successfully figured out how to wrangle large groups of outsource engineers, there's maybe something to learn from there how to wrangle a lot of AI bots.
23:35 Brad Yep, that's my current operating theory.
23:38 Scott All right.
23:39 Scott Let's leave it at that for today.
23:41 Brad All right. It was great talking to you, Scott.
23:43 Scott It was good talking to you too,
23:44 Scott Brad.
23:45 Brad Another fun episode.
23:46 Scott Till next time.
23:46 Brad Exactly.
23:47 Brad Till next time. And wait,
23:49 Brad remember,
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23:54 Scott I know.
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23:58 Scott Thanks,
23:59 Scott Brad.
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