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A new post on my blog. It's been a while, I'm a bit rusty, but this is going to be a fun series.
Bob Aman's profile photoKevin C. (KevinC)'s profile photoWayne Radinsky's profile photoRobert Rambusch's profile photo
<How do you escape this trap?

By outsourcing only the things you are already good at.
By outsourcing ONLY the things you are ALREADY GOOD AT!>

Amen to that! The idea that you'd hire someone whose skills you can't evaluate to do something you don't understand is terrifying. To expect to hit a deadline with anything that isn't a complete nightmare to maintain (even if it sort of works) is delusional.

Good post.
Yeah, it was a little weak at the beginning, and for a paragraph there I thought you were going to get lost in metaphor land, but the end left me intrigued to see the next post. So not bad for your first post in awhile.

I work in the IT department of a manufacturing firm, so maybe things are different here, but I really only remember one instance of hiring consultants for parts we didn't understand, and that was to install a new OLAP tool and design the cube, while being shadowed by in house resources to learn ongoing support of the thing. Every other instance I can remember consultants being hired for was to augment staff on things we knew how to do but didn't have enough bodies for. We usually want consultants to work on the easier bits, because we don't want to invest time in their learning that walks away when the contract is done.
Read it. Nicely written. Numbered paragraphs nice touch. And the monkey.
Great article. One thing though that I suspect is really important to this issue: I'm pretty sure people don't use ODesk to outsource anything complicated or unknown. Maybe the odd job put up there by non-technicals, but the overwhelming majority of work farmed out to the contracting ghettos is stuff no good freelancer would ever consider taking on unless their work queue was utterly dry... and dry for quite some time.

I think that actually matches your conclusion pretty well, with the caveat that it probably means most contractors and people considering outsourcing either instinctively know this or have somehow already come to this conclusion.
On the question of how to solve this problem, I'd say Joel and the rest of the StackOverflow folks are in the best position to do it well. The trick is to make people posting crap jobs aware of the fact that what they posted was crap. And closely related, to actually track the reputation of both the people posting jobs and completing them.
"5 guys is crazy big in my world"

Wow... I think that is how many people we had in the development department just over a decade ago when I was hired. Now we have 13 developers in my department company wide, 6 of which are physically at corporate HQ where I work.

I'm vaguely under the impression that where I work is considered "medium sized", at least in the states.
I actually did two projects on RentACoder. The first one, I just did a small, cheap project to get a good initial rating. On the second, my first "real" project, a system for parsing feeds and putting product listings on a set of online store websites, when I finished the project, the woman asked, "Where's the Admin System?" And I was like, "What?" We had never discussed an Admin System. And I went back to the bid proposal, from 30 days earlier, and it had the words "Admin System" in it. So I was contractually obligated to build her an Admin System. She contacted RentACoder, and told them I had failed to deliver and she didn't have to pay. I calculated my average hourly wage over the 30 days, and it was about $2/hour. I was pretty upset -- this woman wanted to keep the code I had written and get out of paying $2/hour. Anyway, the RentACoder mediator stepped in, and between the 3 of us we negotiated an agreement where I would write the Admin System late and still get paid. When I finally did get the money, it was equivalent to a little over $1/hour. I never did any work on RentACoder again after that. I went through and examined the time frames and pay amounts for a hundred or so bid proposals on RentACoder, and calculated that the highest one could expect to get paid on RentACoder was about $4/hour. That might be ok if you live in Bangladesh, but in the US, cost of living is too high, and McDonald's will pay at least $7 or so. Most of the people in the system are in foreign countries, but there are some Americans -- I don't know how they do it -- they must have one or two companies who hire them for project after project and negotiate the rates privately much higher than the public numbers.

That was in 2005. I don't know if it's gotten any better since then, but I doubt it. A few years ago, I heard about a guy who put the Turing Halting Problem on RentACoder and got bids on it -- people agreed to do it in 30 days for a few hundred dollars. The Turing Halting problem is, of course, unsolvable -- and has been mathematically proven to be unsolvable. The problem is to take source code for a program and determine whether it runs forever or whether it stops, without running the program but only by static analysis of the source code. So all those people bidding were mathematically proven to be bullshitting.

So, someone puts a bid proposal online and the bullshitters bid the price down to some extremely low number. In theory, the rating system should hammer anyone who does this and keep this from happening, but in practice, it doesn't seem to work. But every day RentACoder publishes lists of hundreds of completed projects. So, obviously the system does work. So does it work or does it not work? What's really going on? I don't know.
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