Let’s face it, you have to be a little crazy to go on your own and start a business; long hours, limited resources, moments full of doubt, a challenge to find key talent and a mine field on a daily basis. While some of these you’re just going to have to face the music, finding talent is one of those things that you can expedite and be cost-effective in the process. Nearshoring in LATAM (Latin America) offers a strategic solution, allowing startups to access skilled talent, reduce costs, and accelerate their time to market. According to a report by Deloitte, 62% of companies believe that nearshoring allows them to focus on core business activities while benefiting from a skilled workforce (Deloitte, 2021).
Let us explore some of what we believe to be some of the foundational principles and actionable insights for startups to effectively collaborate with nearshoring partners, like Ardan Labs, in LATAM, paving the way for growth and success. Some of these principles include:
Short and Advanced Go Training Sessions:
The specialized training sessions will cover a range of advanced topics crucial for developers looking to enhance their skills efficiently. Key areas of focus include:
- Understanding Nearshoring
- Cost-Reduction Strategies
- Accelerating Time to Market
- Best Practices for Team Building
- Ensuring Scalable Code
- Leveraging Expert Engineers
- Collective Team Expertise
1. Understanding Nearshoring
Nearshoring refers to the practice of relocating business processes or services to nearby countries, often for reasons such as cost efficiency and access to skilled labor. LATAM has emerged as a prime destination for nearshoring due to its geographical proximity, cultural affinity, and time zone alignment with North America (Canada & the USA.)
Key Benefits:
- Cost Savings: Companies can achieve substantial reductions in operational costs compared to hiring locally.
- Cultural Similarity: LATAM countries often share similar work cultures and business practices with the U.S. and Canada, enhancing collaboration. Who does not enjoy a little cinco de Mayo tequila time?!
- Real-Time Collaboration: The time zone alignment allows for easier communication and real-time project management.
2. Cost-Reduction Strategies
Nearshoring to LATAM can lead to significant cost savings for startups. For instance, hiring software developers in countries like Argentina, Brazil, Colombia, and Mexico can cost 30-50% less than their counterparts in North America.
Case Study: Rappi
Rappi, a Colombian on-demand delivery startup, successfully scaled its operations by nearshoring its technology development. By leveraging local talent, Rappi reduced its operational costs significantly while maintaining high-quality service (Rappi, 2021).
Data Insight:
According to a study by the World Bank, LATAM offers a labor cost advantage of up to 40% compared to the U.S. for tech roles (World Bank, 2020).
Strategies for Cost Reduction:
- Choose the Right Partner: Research and select nearshoring firms with a strong reputation for quality and cost-effectiveness and this is where Ardan Labs comes in. With a combined engineering experience of 50+ years in software development, staffing and staff augmentation, we can make a difference with high quality software engineering solutions.
- Negotiate Clear Contracts: Ensure contracts outline deliverables and timelines to avoid unexpected costs. Ardan Labs’ contracts are clear with no surprises and our legendary reputation in the business speaks for itself.
3. Accelerating Time to Market
Startups = speed… Ever heard of the concept of “fail fast”? Nearshoring can help companies bring their products to market faster.
Example: Shopify
Shopify utilized nearshoring to build its engineering team in LATAM, allowing for quicker feature rollouts and responsive development cycles. This approach enabled Shopify to stay ahead of its competitors by continuously enhancing user experience (Shopify, 2020).
Research Insight:
A report by McKinsey indicates that companies that leverage nearshoring can reduce their time to market by up to 25% (McKinsey, 2021).
Strategies for Speed:
- Develop a Minimum Viable Product (MVP): Focus on launching an MVP with the help of nearshoring teams like Ardan Labs to test the market quickly.
- Implement Agile Methodologies: Use Agile practices to streamline collaboration and improve responsiveness.
- Continuous Integration/Continuous Deployment (CI/CD): Automate testing and deployment processes to accelerate development cycles.
4. Best Practices for Team Building
Creating effective collaboration between in-house and nearshored teams is essential for success.
Key Strategies:
- Establish Regular Communication: Utilize tools like Slack and Zoom for daily updates and discussions.
- Define Roles Clearly: Clearly outline responsibilities and expectations to ensure accountability.
- Build Trust: Invest in team-building activities to foster strong relationships, even in a remote environment with virtual beer meetups or others.
Example: Nubank
Nubank, a Brazilian fintech company, emphasizes communication and team cohesion between its Brazilian teams and nearshore developers in Colombia. This collaboration has been instrumental in their rapid growth and innovation (Nubank, 2021).
5. Ensuring Scalable Code
Startups must prioritize writing scalable code to accommodate future growth so best practices and writing clean and readable code are an essential part of the process. If this is something that you want clear expertise, please read our article Why Go Programming can help. With the right partner, nearshoring offers access to skilled engineers who can build robust architectures.
Case Study: Mercado Libre
Mercado Libre, the leading e-commerce platform in LATAM, faced challenges in scalability as its user base expanded. By employing expert engineers from various LATAM countries, they enhanced their platform’s architecture, supporting millions of transactions daily (Mercado Libre, 2020).
Strategies for Ensuring Scalability:
- Adopt Microservices Architecture: Structure applications into independent services to facilitate individual scaling and we at Ardan Labs are experts. If you want to dive in deeper, please read our article on Design Philosophy On Packaging.
- Conduct Code Reviews: Regularly review code quality to maintain high standards and identify bottlenecks.
- Utilize Cloud Services: Leverage cloud-based solutions to provide the flexibility needed for scaling.
6. Leveraging Expert Engineers
Accessing specialized talent is one of the primary advantages of nearshoring in LATAM.
Example: Movile
Movile, a Brazilian technology company, has successfully built a diverse engineering team across LATAM. This strategy enables them to leverage a wide range of skills and experiences, driving innovation and product development (Movile, 2021).
Strategies for Finding Talent:
- UEngage with Tech Communities: Participate in local tech events and forums to network with potential nearshoring partners.
- UUtilize Experienced Software Engineering Companies: Companies like Ardan Labs or portals like Upwork can connect you with skilled professionals in LATAM.
- UImplement a Rigorous Vetting Process: Assess candidates through personal interviews, technical interviews and coding tests. Ardan Labs Staffing & Staff Augmentation excels at this by having experienced talent acquisition talent that can find and acquire the cream of the crop.
7. Collective Team Expertise
We at Ardan Labs, encourage collaboration between in-house and nearshore teams to enhance technical knowledge exchange, team training, cross-cultural experience and improve project outcomes.
Key Strategies:
- Cross-Training Opportunities: As experts in Go, Rust, Docker, Kubernetes and other well known technologies, Ardan Labs High Performance Training facilitates knowledge sharing through workshops and training sessions.
- Embrace Diversity: Leverage diverse perspectives to foster creativity and innovation.
Example: PagSeguro
PagSeguro, a Brazilian payment processing company, promotes collaboration between its internal teams and nearshore developers. By conducting regular training sessions, they enhance collective expertise and drive innovation (PagSeguro, 2021).
Conclusion
Nearshoring in LATAM presents a powerful opportunity for startups to navigate challenges and drive growth. By understanding and implementing the principles outlined in this guide, startups can effectively collaborate with nearshoring partners, resulting in cost savings, faster time to market, and improved product quality.
Ready to elevate your startup through nearshoring? Schedule a consultation with one of our Software Engineering Managers to explore how we can help you achieve your goals.
References
- Deloitte. (2021). Global Outsourcing Survey. Retrieved from Deloitte
- World Bank. (2020). Labor Cost Comparisons in LATAM. Retrieved from World Bank
- Rappi. (2021). Scaling Operations in Colombia. Retrieved from Rappi
- Shopify. (2020). How Shopify Built Its LATAM Team. Retrieved from Shopify
- McKinsey. (2021). The Time to Market Advantage of Nearshoring. Retrieved from McKinsey
- Nubank. (2021). Nubank’s Growth Strategy. Retrieved from Nubank
- Mercado Libre. (2020). How Mercado Libre Scaled Its Operations. Retrieved from Mercado Libre
- Movile. (2021). Building a Diverse Engineering Team. Retrieved from Movile
- PagSeguro. (2021). Innovation at PagSeguro. Retrieved from PagSeguro
This press release highlights Ardan Labs’ commitment to advancing developer skills through specialized training and supporting organizational efficiency with tailored staffing solutions.