Well it looks like I went out of order I devoted an entire post to the RFP after I talked about how I decided to outsource the project. Who knows maybe it's not out of order but here are links to the entire story of CapitalCents.

The Vision Pt1
The Pitch Pt2
Outsourcing
The RFP

A few things I learned about teams in India (if you are in the United States) the time zone thing really sucks. Your asleep and they are awake hopefully working on your site, you get about an hour or two crossover in the morning. Also get up front some support after the project is complete, you have lots more leverage when you are negotiating the T's & C's (Terms and Conditions) before you start to pay them. Explaining your vision for your site via email or instant messenger (I used Skype, it worked pretty good) is a pain in the ass. Hopefully you mitigate most of this problem in your RFP, but you'll still probably need to direct traffic in some detail from time to time. Meet for an hour once a week with who ever is in charge, also meet with the developer if it is not the same guy without the boss, this will give you a good sense for what his vision is for your product. For whatever reason I was not able to EVER meet the developer, I did not like this at all, make sure in the beginning you are allowed to have access to the developer.

Do not pay everything up front, pay at predetermined milestones. A small down payment is a good gesture of trust and goodwill but the rest need to be based on hard lined milestones. I'd rather pay a little at a time than all at once, this really keeps the ball in your court the money can sit in your high yield savings account, they must meet your milestones and goals for payment, and of course the carrot is dangled in front of them the whole time. Make sure you have trust the team, if you don't trust them do not do business with them and look at some of their previous work.

I really struggled with getting them to understand the vision (maybe that's my fault) and getting them to implement and follow through with that vision. I probably should have met with them more and now I am kind of screwed because my site is not working and I don't have any support. Now I need a CTO which I am looking for now.

I hope this was helpful, we'll continue next time. By the way we are still working to improve the site and we have a long way to go but we are learning little by little, soon we'll even have a logo!

If you have any questions drop me a line and I'll be sure to get back to you.