How Socialmedian uses Offshore development

Jason Goldberg ex-CEO of Jobster blogs about learnings from his 2nd Stint as a Startup CEO - socialmedian

I specially would refer to how he approached offshore development. Note specially the third point about shareholding.

So, we decided to set up things differently at socialmedian. First, our decision to go offshore was certainly based on costs, but it was equally based on abilities and mutual respect. I had worked with the future socialmedian team in Pune before socialmedian on other projects and only chose to work with them on socialmedian because I was impressed with their thought process as much as their work product. We chose to work with them because they know how to solve problems and how to figure out how to respond to customer/user needs. And, they passed the most important test of all, an earnest early interest in the problem we are trying to solve at socialmedian and fantastic ideas on how to tackle the problem.

Second, I personally committed to travel to Pune, India nearly monthly for the first year of socialmedian (I've been there 6 times thus far in 2008 and am headed back in a couple of weeks). The logic here was that if the team was there, I, as the lead product manager, should be there too. As per our hunch, we learned early on that in-person time was critical for planning. As such, we have evolved into this regular cadence wherein for 1 week out of every month we plan together in person, and then for 3 weeks we are more tactical as our interactions are over skype. Sure, all that travel is tough (ask my spouse who hates me for it), but it has proven to be very effective for us at socialmedian.

Third, we have made our Indian team shareholders in socialmedian, so we are one company building one product. It's an offshore situation, not an outsourcing relationship.