When Shanghai-born, Sydney-bred Fan Bi, a senior at Babson College in Babson Park, Mass., decided last year to launch Blank Label, an online custom-shirt retailer for men, he didn't think twice about outsourcing the Web work. Bi had spent a year in London working in sales at an investment firm that farmed out work to analysts in India, SriLanka and Costa Rica. Surely, he thought, he knew enough to pull off this sort of arrangement himself.
Bi needed someone to design his Web site and develop the back-end systems that processed orders and collected the money. He trolled matching sites like Elance.com, Coroflot and Odesk and found Web designers in Romania and the Republic of Macedonia, and Web developers in India. The price was right: The designers wanted $5 to $8 per hour, while their U.S. counterparts charged $25 to $40; the savings were similar on the development side too.
"It was too good of an opportunity to pass up when we were trying to bootstrap our business," says Bi. "Getting the work done for a quarter of the price was tempting." Too tempting, given the saga that ensued.
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Bi's vision was basic: Shoppers would virtually build their shirts from scratch--selecting fabric, size, color, collars, cuffs, buttons and monograms--and place their orders.
Simple as that sounds, the designers couldn't seem to grasp it. A big problem, Bi realized in retrospect, was that he didn't define the specifications nearly enough. "The first design we got back was a terrible contrast of yellow on blue," he says. "I didn't specify a color, but thought it looked terrible and didn't convey the mood. It wasn't aesthetically in synch with what I had in my head."
The site also took a painful 10-to-12 seconds to load an image. "The developers basically said, 'This is what we can do. If it doesn't work, too bad.'" Bi recalls. Worse, "they never gave us suggestions for how to make it better."
Four months later, after burning through $7,000, Bi decided to bring on a chief technology officer and Web designer, in exchange for a minority stake in his company. (He won't reveal the exact percentage). Within six weeks, the twosome had built a site that was better than Bi had envisioned, without using any of the clumsy code written overseas. "The team abroad wanted quick and dirty projects that can be turned around quickly and get them paid," says Bi. "They had no real ownership."
Then there was the matter of fulfillment: Who would supply the shirts? Bi looked at nine tailors, all in Shanghai, who could custom-make shirts based on the designs. The first vendor he settled on proved infuriatingly nonchalant when it flubbed an order. After a few complaints from Bi, the vendor ended the relationship.
Bi hit pay dirt on his second try, but only after going so far as to share certain details of his business plan, to give the vendor more confidence that Bi was no fly-by-night operator. Visiting in person was critical too. Verbal contracts, especially in China, often mean more than written ones. "The idea of putting a contract in front of them rubs the Chinese the wrong way," says Bi.
Bi's Web site, www.blank-label.com, launched late last month. He plans to continue outsourcing his manufacturing, but not the Web work. "Our designer doesn't just do graphic design," says Bi. "He spends time with users and finds out what they care about. The guys I work with are passionate and really care about the business. You can't outsource that."
