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Technical Co-founder Vs. First Employee Vs. Contract it Out

Hi,

I'm going through an ideation accelerator and I've gotten my idea to a point where it has be vetted by customers and advisers and I'm ready to start building. Just one problem, I lack the development and Design skills needed.

I've worked as business lead on 2 rather large corporate technology projects so I'm comfortable I can speak the language to get my product built I just am unsure which route to go.

From what I can tell, my three options are:

1. Find a technical co-founder.
2. Hire a first employee who has technical skills
3. Manage the build process by myself by leveraging a build-shop.

What are your thoughts on pros and cons of each as I go through this decision making process...?

19 Replies

Rashad Bartholomew
2
0
Rashad Bartholomew Entrepreneur
Business Development at PassCash
The more complex and data intensive the application the more you should look for a CoFounder. If it is a simple application it is likely cheap and should have fewer places a contractor could make a costly mistake. A first employee is also an option and in many cases I view that as a compromise to the two extremes.

R
Emily Baum
0
0
Emily Baum Advisor
CEO / Founder at Keyrious
I'm wrestling with a similar dilemma. Curious to know how you sort thru the choice.
Kirsten Lambertsen
12
0
Kirsten Lambertsen Entrepreneur
Founder, CEO at Kuratur, Inc.
Having done both 2 & 3, my experience is that 2 is far superior to 3.

If you have the $ to hire someone, do that. I know very few startups who've contracted out with great results (though there are some). If you know someone who has, and they can recommend their shop, then maybe it will be ok to contract it out.

I've learned over the last two years of working on my second startup (and going through an accelerator and networking with tons of other startup founders) that there's really no such thing as "finding a cofounder." It's like finding a spouse. Who does that? Cofounders happen when two or more people come up with an idea *together* and decide to go for it.

You are a solo founder who should hire people to work for you (with generous equity options). You don't have cofounders because you came up with your idea on your own, and you will never find a cofounder as passionate about that idea as yourself. But you will be able to hire people who love working for you, for a startup and on your idea.

You do have a 4th choice: learn to program by building your prototype or MVP, yourself. This is the option when you don't have budget for paying an employee. It's what I've done, and I'm really glad I did.
Bill Hludzinski
2
0
Bill Hludzinski Entrepreneur
Technical Lead at Davidson Kempner Capital Management
Hi Matt, It's Bill Hludzinski from FI - if you want I can meet up with you or do a Google Hangout and spend an hour or two with you to help you further clarify your tech needs. Some portion of it may be sensible to outsource. If the amount of work is small enough and your path to revenue short enough, you may not need a tech co-founder. Bill Hludzinski (215) 499-6368 [removed to protect privacy]
Eric Landeen
0
0
Eric Landeen Entrepreneur
Director at doxo
I think you should look for a cofounder. An employee or a contract house will be focused on earning money rather than iterating to arrive at a great MVP, and they (probably) won't have passion for the project or the problems you're trying to solve. If a partner joins you because he or she believes in the idea, believes in you, is willing to put it all on the line just like you- then you've got a shot at being successful. I went the route of hiring a contract house but had the problems I mention above.
Michael Barnathan
0
0
Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
Finding a cofounder (or option 4, learning the basics yourself) is the best option - if you're a tech company, you need leadership that understands tech. Even if you get a co-founder, you need to know just enough tech to set expectations and avoid causing problems for the dev team (especially if the dev team is initially just that co-founder directly).

An engineer as a first employee is also an option, but that person would need to be a pretty senior engineer, and those don't come cheap.

Contracting the development out will work for a prototype, but most contract shops will make a mess that should never make it into the customer's hands. You will likely have to rewrite your entire app when it comes time to go to market, or forge ahead with something that doesn't always work and risk a bad customer experience.
Michael Brill
3
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
+zillion on @Kirsten's comments. I think my all-time favorite FD post.
Don Daglow
2
0
Don Daglow Entrepreneur • Advisor
3-Time Inc. 500 CEO, Technical Emmy® Award, International Speaker, Advisor at Founders Space accelerator
I agree -- @Kirsten nailed my experience and perspective.

Kirsten Lambertsen
1
0
Kirsten Lambertsen Entrepreneur
Founder, CEO at Kuratur, Inc.
Thanks, @michael and @don :-) Nothing like a few scars to form strong opinions!
Jake Carlson
1
0
Jake Carlson Entrepreneur • Advisor
Software Development Manager at Oracle
What it comes down to is that you need someone technically inclined that you trustin your corner. I don't agree with throwing around stereotypes or giving broad advice. Every situation is different.

Speaking as someone that has contracted with startups and helped them create viable platforms for a fraction of the cost of hiring an employee or co-founder, out-sourcing it can absolutely work as long as you are careful with how it's managed. If you outsource, I highly recommend getting someone you trust to manage the project from a technical standpoint to ensure that it's foundation is solid. The time commitment can be minimal but he/she should have proven development experience and should be a trustworthy proponent of your best interests. This is a great option if you want to get an MVP out there ASAP and don't want it to cost a ton of money.

If you find a great technical cofounder that shares your vision and is adept enough to develop it on his/herself, great. But it will be much more costly for you to jump into bed with the wrong person out of desperation for a technical cofounder only to find that he/she is completely wrong for your business. A cofounder divorce is much more difficult and costly than firing an outside firm. Same goes for a first developer employee, but to a lesser extent.

Yes, a cofounder usually trades salary for equity, in which case he/she has more skin in the game. But an employee or outsourced firm can be fired if they don't perform (especially if you are smart about the way the contract is worded), which should really be motivation enough for them to do a good job. Anyone (even a cofounder that came up with the idea jointly with you) can lose interest. And anyone (even a contractor) can get fired up by the idea.

About the only general, solid advice I can give is that you need someone technical that you trust to manage the software project. If that person is the cofounder, an employee, or someone that just manages an outsourced firm is less important than how good that person is technically and how much you trust him/her to protect your interests.
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