I had a professor who's sole purpose was to say "Outsource everything except your core competency."

Not sure I agree with this reasoning:

"8. Outsourcing keeps you from hiring the wrong person. A bad employee hurts every company, but a bad hire can destroy a start-up. Early hires in start-ups need to be considered very carefully, because they can make or break the business. Outsourcing allows a start-up to get work done while taking its time on hiring key employees."

Couldn't you get just as burned by outsourcing to the wrong agency?

I can see the reason for this. If you hire a terrible employee, it's harder to fire them than it is to cut off an outsourcing agency. Early employees define the culture of the company.

On the other hand, you'll never get the quality of work out of outsourcing that you could possibly get from a great hire.

I think it's easier to fire an agency than to fire an employee.

The article forgets about effects from 'uncertainty': black swan, div/0, singular matrix, etc, if you will

It reminds me about specialization: country T for tobacco which outsources corn to country C. Within the next year, there's movement against cigar and there's ethanol boom

Some kind of hedging is needed: be able to do everything yourself so when outsourcing goes sour (it will, since you have less control), it won't hurt so much - you can go without it

"the best way to get approval is not needing it"

I think the "almost" is key here - because there are certainly some functions that shouldn't be outsourced. Some people (not sure if this is me or not) would say that the development of a core application, for example, should absolutely NOT be outsourced no matter the cost.

Agree. Outsourcing development is probably one of the likeliest causes of death for web startups. If you don't have a technology-minded cofounder who can build the application, don't start the business.

digg worked out ok. there's always an exception.

To be fair, the guy who coded the digg site posted right here on News.YC that he thought the entire time that he was part of the team.

http://digg.com/programming/Digg_com_created_for_only_200_00...

Although this comment by a digg developer who joined them in 2005 says Owyn (the original developer) fared well, however.

Right, there are always exceptions. But you shouldn't give advice based on exceptional cases.

doesn't this invalidate all advice since only statistics can give non-anecdotal advice?

If you give advice about anecdotal cases, you should package it with advice about how to make that exception situation arise again.

If you don't know why it went well despite poor odds, don't give advice :-P