Should companies build mission-critical operational competencies in-house rather than outsourcing them to external agencies and suppliers?
4 recorded positions from 3 people, first published Sep 2001. They do not agree — the readings below are what each one actually argued.
Build core competencies in house to avoid dependency and differentiate
Dominik Richter · published Dec 1, 2023 · hedged
HelloFresh's philosophy of understanding things in deep detail and building core competencies in house rather than outsourcing to external agencies and suppliers is what separated it from its US competitors.
Some competencies are worth truly understanding in detail, and building them internally pays off in the long run.
Scope: framed as 'maybe' a difference in philosophy; contrasted specifically with US competitors
12:16 20VC: HelloFresh CEO on Why When You Raise VC You Only Have Two Options, Why Your IPO Price is Irrelevant, Why Timing is So Important in Going Public & Why D2C is Not Dead with Dominik Richter
Dominik Richter · published Dec 1, 2023
Competencies that are mission critical to your success should be brought in-house so you have no dependency on anyone else and can judge how good you actually are at them.
You don't want dependency on a third party for anything mission critical, and owning it is the only way to understand how good you are at it.
Scope: once past the product-market-fit stage
13:21 20VC: HelloFresh CEO on Why When You Raise VC You Only Have Two Options, Why Your IPO Price is Irrelevant, Why Timing is So Important in Going Public & Why D2C is Not Dead with Dominik Richter
Also on the record
Harry Stebbings · published Dec 7, 2022
Outsourcing engineering as a short-term bridge before hiring in-house is a bad move
Great engineers don't want to join and inherit a substandard stack built by an outsourced team
43:59 Outsourced engineering bridges deter great engineers and leave a bad inherited stack
Paul Graham · published Sep 2001 · hedged
Companies should outsource any job that is not directly exposed to competitive pressure, since outsourcing exposes it to that pressure.
Outsourcing a function subjects it to competitive pressure it otherwise escapes.
source Outsource functions not exposed to competitive pressure to subject them to it
Your assistant can query this graph directly — 4 positions here, 19,646 across the corpus. Add 996.fm over MCP.