Software Sweatshop

 Living beings crave predictability. It's a natural manifestation of our survival instinct. Plants lean towards sunlight, lions live travel with their prey, and humans move to Silicon Valley all in search of a stable and sustainable living. Businesses seek the same stability. We seek stable employees, reliable suppliers, and consistent customers. We panic when things break the pattern of consistency and spend our entire lives creating systems that run our lives (both business and personal) like clockwork.

Marketer and author Seth Godin had a nice post on his blog the other day about business predictability. He says:

"Take Hollywood, for example. There are literally tens of thousands of people and organizations that have built a business around the movie-making platform. The major studios provide a predictable, profitable place to make a living. Screenwriters, technology companies, advertising agencies--they know that they can depend on the system, and even better, they realize that once they’ve paid some dues, they can profit over time by getting better gigs, more reliable income streams, etc.

Wal-Mart has done the same thing with the businesses and vendors that count on them. They have created a series of rules and procedures and over time, it gets easier and easier to make a living working with them.

Small organizations can do the same thing. Restaurants, for example, build a universe of staff and vendors, each of whom is making a small bet on the stability of the platform as well as the opportunity to exploit economies of scale as a trusted partner."

 People seek stability, reliability, and predicability because it makes them feel safe. Business owners need to  keep that in mind.  Fred Smith of FedEx used to tell his managers that they're not in the package delivery business, they're in the 'peace of mind' business.

It's the same thing with outsourcing. Your vendor doesn't have to be the biggest or the cheapest. They don't have to be rocket scientists or geniuses. They DO have to be reliable and trustworthy. Many firms get burned when going offshore because they choose the cheapest vendors. You can't build a business with vendors that you can't trust. We've always said that good technical resources are easy to find but finding someone that's reliable and committed isn't.