Working on an ICO with a Software House - 6 Insights on Blockchain Development Outsourcing
Unless your team is experienced in creating cryptocurrencies, while working on ICOs you will come to a point where you will be in need of additional backup to support you in solving particular technical issues.
Being a tech expert, you already know the pros and cons of outsourcing. But what are the biggest problems and pain points in outsourcing this kind of project? How does it differ from the usual? Is there anything I should beware of?
Here are a bunch of our comments, coming from the L4A team, on delivering successful blockchain, ICO and Web projects of various complexity.
Let’s jump right in:
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What do you have to consider before launching an Initial Coin Offering with a Software House?
1. Avoid rates based on cryptocurrency
Some software houses base their rates for ICOs on cryptocurrency tokens. While it might seem to be a tempting model, allowing you to pay directly in crypto raised during the project, it also carries some risk.
The first and the most explicit is, of course, a change in the crypto value.
Of course, it can also work the other way around: you can actually save half off the price. But if we are talking about projects worth, for example, 50 bitcoins ($420 000 at the moment of writing this), the leverage can swallow your whole project. You are playing roulette - a big event on the crypto market can actually drown your ICO.
2. Discuss the level of control and responsibility
In ICO projects, a lot of elements are extremely painful and complicated to outsource. When you are working with blockchain there are points of no return, along with sensitive data all around.
The comfort of outsourcing is often in giving up the responsibility for your project to someone else. However, if you are dealing with financial data, you simply cannot let yourself do that.
That’s why, while working with CTOs, we’ve developed a cooperation model that instead augments their in-house resources, giving full control to their tech team. They use our experienced blockchain developers to deepen their understanding of blockchain and build a solution for their companies.
Of course, you may not have your own team to take care of that at the moment. In this case, you will be dependent on an external partner to assess which technology would be best for the project and the way of approaching it.
That’s the moment when trust comes into play.
3. Give them a credit of trust
After picking the right software house, based on referrals, delivered projects and testimonials, a good practice is to give them a healthy credit of trust. A credible partner with the proper experience will know how to proactively make you feel safe about your project.
Why do I mention that? An overzealous approach to micromanagement might slow you down and distract you. That’s why “transparency” is a mantra used in all software houses - to help you feel safe, secure and in charge, and let them do their job with all the experience they’ve gathered.
Simply find a self-sufficient team with strong business ethics and let them do the job for you - that’s what you are paying them for.
And talking about money…
4. Mind the precision of your ICO budget estimation
The rule of thumb is: if you get a quick custom project estimation in a Time & Material model, it is imprecise and you will actually have to pay more to get the project done.
We know that a precise estimation takes time, and it shouldn’t be rushed - our analysts take great care to make sure any estimate will be accurate and fit into the prescribed budget. Development is pricy, and you don’t want to spend any more on it than required.
Working with a proven software house, you might find a bunch of costs in the estimation that might surprise you at first - such as a lot of man-days put into testing. But, in dealing with financial projects, you really want them to be triple-checked.
>> Check our post about ICO traps
If you are looking around for a simple budget estimation, you might also like to take a look at ICO Calculator that we are currently working on - it will give you an idea on how much a basic ICO project may cost.
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5. Pay attention to the requirements analysis of your ICO
Requirement analysis is a huge, and perhaps the most important, single point in your communication with a software house. Working with outsourced teams before, you know that it is a key foundation in delivering a successful project.
It differs a lot depending on the technical skills of the team on your side and the maturity of your vision. You may know all the details of your solution, or just have an elusive sketch of an idea.
The software house you choose needs to adapt to that.
To be honest, we have a bit of a fanatical approach to this part. Technical details behind an ICO launch can be extremely complicated - for example, we’ve delivered a project with complex intertwined blockchain systems.
Working on such a project actually resembles building a bridge starting from both sides of the bay, with the goal of meeting in the middle.
But in this case, there were multiple bridges.
Connecting at multiple levels and various points.
With all that sewed into a blockchain cloud.
Planning and delivering such a complex project is a humbling experience, where one gains a lot of insights on how much it really takes to deliver a particular feature, and how to make sure to deliver it on time and on budget.
That being said - focus on a proper requirement analysis with your software house. It will save you a lot of headaches further on.
6. Pick the right tech people on your side
We know that we already have one tech expert on your side - you.
If you are not familiar with blockchain technology, in working with outsourced developers you have to be extra careful. But experienced Software Houses will know how to address this - they have specialized Project Managers that organize workshops. It gives them a good grip on the idea of the project and pins down all the details.
But if you have your own team and only need some extra resources, that’s a whole different story. In one of the ICOs we’ve delivered, which raised over $15M, we were actually working with a client’s team in a dynamic and agile way.
It is a challenging approach and to ensure seamless cooperation you have to communicate very clearly. Simply make sure you have everything written down, that your partner understands every detail and that you won’t get lost in the exchange of technical mumbo-jumbo.
>> How to launch an ICO project
Summary: how to work on an ICO with a Software House?
To wrap it up - ICOs for CTOs are usually quite demanding projects, with the main threats revolving around communication and budgeting.
When you outsource your ICO, pick a software house that has the experience, credibility and precision to deal with your project and your money. Dealing with blockchain, you simply won’t have the space for mistakes - and the irreversible transfer of money is not something that can be treated lightly.
In the end, an ICO is an investment that has to bring you an ROI - make sure you choose a partner that deeply understands that and has proven experience in this field. A proactive approach is the icing on the cake.
Let’s talk about your ICO!
We would love to hear more about your project and contribute to your success.
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