I think you have a good understanding of what's at stake. If you want to have reliable folks, they're going to need a recommendation from someone you trust, no ifs and or buts about it. Don't risk capital you can't afford to lose.

$25k for 6man weeks sounds about right (in the US), but you really want to pay by the job. If you can get it for half price by going over seas, and you TRUST! the source (references, great recommendations from folks you know) then that's a great bargain.

$8k in the states can get you ~2+ man weeks of worth of quality work. Again pay by the job if at all possible, the best can probably get you something you're happy with sooner than you expect.

Can you prune down your prototype some? This could get you a great designer for the price you can pay. You can negotiate with an individual that has good references and a solid reputation.

In case you are looking: check into some social media (twitter, friendfeed, googlewave) and talk directly to folks that are in the community. They can help point to friends that are good and need work. There's always sites like http://www.getafreelancer.com/ http://www.elance.com/

I've had a lot of experience outsourcing projects and also have a team of 45 guys in house doing SEO, design and programming.

If you go with a provider in Elance, or Rentacoder or Odesk that is very highly rated you should be ok. But when I say high ratings I mean a lot of ratings and almost all of them 10 out of 10.

If you go for guys in India that have reasonable ratings you still might end up tearing your hair out.

I don't think you can get any better than these three sites. I've tried pretty much all of them, and these three seem the best.

Elance - slightly higher prices, but more reliable providers Odesk - more focused on hourly work. If you don't have specs that are accurate with all of the small details then you might be better off doing hourly work anyway. It's so difficult to get the specs right. As you start to use your web site you will notice things that you didn't realize when you first thought of the project and you will likely want to make changes. Rentacoder - best for fixed price projects. They have a good escrow system which gives reassurance to the providers.

So basically can you get quality at a cheap price (from overseas providers)?

The answer is yes with some caveats.

You are much safer with a US provider. They are less likely to screw it up.

If you go with someone on rentacoder or odesk (or getafreelancer and any of the others) that has no reputation, a random choice, your chance of them doing a good job is probably 20-50% if it's a big project ... in other words an 50-80% chance of them not doing a great job. Those are pretty bad odds. It's it's an easy project, then there should be no problem going with a new provider from India.

However there are ways to manage it so that you can get a large project handled successfully at lower prices. You need to take one of these two approaches:

1) You try out several providers on a small scale and get experience with one who seems great, and then continue with that person. 2) You get a team with extremely good ratings on the site.

If you take one of these approaches your chance of success go up to about equal with the 25k USA provider.

That's my experience after outsourcing literally hundreds of projects online.

I've also put some more information on this page:

http://timemanagement.com/why_outsourcing_doesnt_work.html

Finding a reliable outsourced developer/company in India is not an easy job at all. Straight out of the college guys think themselves as real developers and start posting on sites such as Rent-A-Coder, Elance, GetAFreeLancer etc. They have very little knowledge of handling even the small projects and just because they can make a simple calculator application they think they are mature enough to handle real-time projects now.

The key to handle an outsourced developer (or a company) is Interaction. If the interaction is good, clear and frequent then there is a better chance of getting good output. Any company can get a CMMI, any other certification or testimonials and one should not decide on these levels.

Some of the points to keep in mind are:

1. Talk to the person/team you are going to hire to get a better idea on their understanding or the project and how they are going to execute it. If possible do a live video meeting instead of a phone call.

2. If you are already working with a outsource company in India then its best to interact with your team directly. Do not just talk to the assigned manager but with the whole team to get an better picture.

3. Get Status reports on daily basis and scan them at-least once week. Report any discrepancies to let them know that you are watching.

The above points are based on my experience as a outsourced developer and after working in an outsource company in India. I started on Rent-A-Coder after 5 years of development experience and managed to get only a couple of projects there but for all my project I got a 10/10 rating. Then one of the client came back with bigger project and I now work on that.

In avg offshore company 1 full time resource will cost you ~ $4K / month. Freelancer will cost you $1500-$4000 / month. For short term project like your POC it is probably better to go with freelancer(s). Find someone by references from people you trust or just be looking through their portfolios. You can get lower price if will find people who are not 100% freelancers and have a day job. It will take longer, but you'll save some money. Thanks for $25K story - made me smile. Sr. level developer earns $1.5-3K / month here, rest you pay for office expenses and a privilege not to talk with developers directly ;-)) As for web design part - if it costs you $300 than it's just a template developed for someone else, before you have appeared on horizon.

Go with the two-shore model. Companies have PM/Account Management in US with development centres in offshore. Will be the best case for cost vs reliability.

Also, make sure the shop specializes in working with the start-ups, as you need the passion within your dev team. PMs should be geeks themselves and should be called Scrum Masters (means - look for agile guys). Companies who choose to specialize on startups are usually prepared for (much) lower margins.

Wow. Good thing you didn't go with that offer. That seems a little ridiculous. With a budget of >$8000, you should be able to get more than enough for what you need. Here is perhaps an outlet you could follow:

• Very nice Web 2.0 (or whatever you want) site design, try 99Designs or Crowdspring
  • You post an amount that you want to spend, give them a little information about your company, and let the people work. At the end of the specified work period, you will have several different designs from different people, and you simply choose the one you like the best, and pay them. Most websites are going for $1000 - $2500.
• For coding, check out RentaCoder.com.
  • Works in a very similar fashion except for software development.

These two sources should get you what you want for significantly less than what the company you mentioned is asking for. Good luck.

If you have an idea that you are trying to launch and a tight budget that could be better used for marketing or other revenue generating activities it might be worth us talking. I work for a company that provides services for startups web development, SEO/SEM, etc. We have a very unique pay for performance business model that allows us to help startups get launched with a scalable platform and access to all future core technology we develop.

You can learn more at www.qstartlabs.com. Give us a call as I would love to learn what you are trying to accomplish and share with you how we reduce the cost, risk, and time to launch of tech startups.

Warm Regards, Kevin

There are many websites that provides freelancers, but can you trust on freelancers regarding IP and Code ownership?

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I +1ed Ivan for the two-shore model. I've seen that work a number of times. Having the devs in Poland or India means a cheaper price and having the PM and business contacts in your own timezone means that there isn't a communication problem.

Just out of interest: why do you specify RoR? Is that a specific requirement? You a narrowing your search for devs by going only for Ruby.

Never trust Indians. The people I know that have worked with them, have had a lot of problems

I dont agree that Indian are not trustworthy. As per my experience they are most professional, honest and reliable. They provide always best services. I have hired dedicated web designer & dedicated SEO service from India Designers, they people done very good job for me. Still i am getting valuable suggestions & support from them though my project has already been completed.

If your not afraid of outsourcing to China, another good freelance website is Taskcity. They have a useful project management system that allows you to set milestones and pay as each part of your project is completed. The staff of the website will also help you monitor and manage your project and deal with any communication issues if they arise.

Good luck with your project, Susan