Rule of thumb for outsourcing

How do you decide what roles or tasks are worth outsourcing (upwork, fiverr, agencies, etc) vs doing yourself?

I decide this by constantly asking myself:

"Could I pay someone to do this task at a lower rate than my personal hourly rate I would bill out at?"

For example, if I need to write a blog article and it takes me 5 hours to write the article and I value my time at $100 / hr, then the opportunity cost of me writing this article is $500.

So if I can pay someone $250 to write the whole article for me, it makes sense for me to outsource it.

This fundamental approach applies to everything, but some exceptions are:

1. When doing the task yourself will provide you with key learnings about a part of the business. For example, when building out an influencer marketing program to promote a new product, I might do some of the list building and influencer outreach myself before hiring a list-building and outreach specialist. By doing this, I’ll gain a better understanding of the types of influencers in the vertical and gauge their sentiment around my new product. This knowledge will help me with all kinds of things moving forward while also helping me hire and hold others accountable in future influencer marketing roles due to my new knowledge in the space.

2. If the task is super high value for the business, and requires your unique insight. This applies especially in the early startup phase where it makes sense for you to leverage your own knowledge of the business and your vision. i.e. If you’re throwing up your first landing page, it would make sense for you to figure out your own value proposition as it’s so incredibly important to the next steps of your project, may require constant adjustments, and outsourcing this might result in more hassle than doing it yourself. Another example would be doing your own financial forecasting because you understand the industry and its nuances so well in this early phase.

3. If you genuinely enjoy the task. Nothing wrong with this, but it may be frowned upon by co-founders or investors if your time goes to lower value tasks.

4. If it's a one-off task that will rarely come up again and cause you more hassle to hire out. For example, setting up core operations software, establishing bank accounts, interviewing for core roles, etc.

5. If you don't have any cash to invest in outsourcing and don't want to raise cash. This is commonly why founders try to take all the work on themselves. And while I’ve found it's good to be frugal, you always need to be looking at the opportunity cost. If you have growing revenue and a long term view on your business, it could make a lot of sense to raise capital to expedite your growth. One way to arrive at this decision is to run a multi year scenario of what your business valuation and equity would look like if you raised cash today vs bootstrapped the business and did most of the work yourself.

Rule of thumb though, for any straight forward repetitive or lower value task that would cost you a lot of time to do (list building, outreach, data entry), it can be good to outsource as soon as you've got your strategy dialled in.

Time is my most valuable asset and I reserve it for the tasks that will really make a difference in growing my business. And the faster the startup is growing, the more valuable that time becomes, hence the more you should outsource.

Thoughts? Anything to add?