Startups · Fundraising

What positions are most important for a startup in the on-demand mobile space ?

Sean Greene CEO & Founder, Bambino

September 7th, 2015

I'm building a start-up and it's just me at this point. I've been working with a product shop to build out the wireframes and prototype, but I'm now at the point that I need to build the MVP. To do so, I'm going to raise a small round and I need to figure out how much money I'll need to raise. At this point, I'm building my first year budget and need advice on the appropriate staffing levels for the development team. Here are my thoughts and questions:
  • Lead Developer - this is an individual that can grow in the position, manage internal staff and external contractors, and has a good understanding of the technology needed.
  • Jr. Developer - I assume it's a good idea to start with two internal resources that can feed off of each other as opposed to outsourcing everything. Thoughts?
  • UX resource - should I hire or contract for this? In other words, is this someone that has to be core to the team or can they pop in and out as needed?
  • UI resource -should I hire or contract for this? In other words, is this someone that has to be core to the team or can they pop in and out as needed?
I'm a product, marketing, and sales guy by nature and I've always been flanked by a strong CTO type to offset my weaker technology skills. Is it necessary to have a VP of engineering at this stage or is a lead developer adequate. Any and all advice is welcome!

Damien Filiatrault Software Architect and Strategy Consultant

September 7th, 2015

Sean,

Admittedly, I am in the technical staffing and product development business, so I am biased toward the approach that my company offers, but here are my thoughts.

First of all, time to market is important, and even if you decide that your ultimate goal is to staff your entire technical team in-house, it will likely take you months to staff all four positions with the right people as traditional employees. The hiring process can take a lot of your personal time if you do it yourself that could be devoted to your core business and you will likely pay significant recruiting fees if you use a technical recruiter.

Just as Lucas E Wall suggested, I would focus on finding a lead developer who can can code and may eventually lead your technical team. It is most valuable to have the most senior development staff as in-house employees, especially if you are envisioning selling your company as an exit strategy. It's a fact (like it or not) that many people in the VC industry will feel more comfortable if you have your top technical talent in-house.

That said, profitability is potentially a more important factor than whether your dev team is in-house or not. And hiring in-house is more expensive than contracting, particularly when you can contract developers who are not in the US and are significantly less expensive. Here is a comparison on hiring in-house vs contracting:


Although I believe in the economics of outsourcing (and use it myself for my own product development), there are some pitfalls.

You must be sure that a solid foundation is laid for your application and the right technologies are chosen so that you don't have to re-write it anytime soon. If you can find a solid lead developer before bringing in the remaining team, he/she can make these important architectural decisions. If you can't find this lead developer in time, you need an experienced technical consultant you can trust to make these important early decisions.

If you end up working with a distributed team of contractors, it is important to have them all be in overlapping timezones. I strongly believe in the agile/scrum methodology and you'll want your dev team to interact easily and work together in a positive way to creatively solve problems and deliver a great product quickly.

Having your dev team all together in the same office working face-to-face is optimal on some levels (engagement, morale, speed, quality) but is not optimal for cost (office rent, US city salaries, etc.). So finding a way to get as many benefits of collaborating in an agile fashion without breaking the bank is key.

To summarize, I would say the following:
- Get working on your product immediately
- Focus on hiring the most senior technical position(s) in-house before the more junior ones
- As long as your technical architecture and design are solid, filling in the more junior positions with contractors will allow you to move more quickly, save you money and give you more flexibility.

Here's an article from our blog that addresses some of the questions you are asking:

Steve Everhard All Things Startup

September 8th, 2015

So I am going to ask a different question. Where is the focus of innovation in this project? Is it around the user journey (UX), technology (front end algorithms or back end data management), the business model (the way you make money and/or attract users) or the service? If your tech can be delivered using standard components it is more suitable for outsourcing as long as your technical requirements spec is pretty complete - you want your solution and not theirs! If your business relies more heavily on the user experience then UX is your first hire - you can always outsource the graphics if you need to. Fundamentally you should build your early team around the piece of the project that will drive innovation and adoption and don't just staff up engineers because that's what everyone does. It might be the right thing but KNOW it's the right thing for your project before you commit.


Kirsten Minshall Founder of UVD and CTO at Limpid Markets

September 7th, 2015

I've got a few pointers: building a team is HARD. Getting them to gel is HARD. Getting a common understanding of product vision is HARD. It seems to me that you're going to make it difficult for yourself by trying to bring in all these 'resources' at once. I like to work on the principle of simple is better and therefore would start with as few people as possible to get the MVP done within your team, build a shared understanding and trust and then adding team members on a demand / need basis. At the least you'll need a developer (lead if you're not technical) and I personally think someone to handle the design decisions (I'm not sure why you've split UX from UI at this stage when there are plenty of talented individuals who can handle both). I'd much rather have a small cross functional team than 2 developers with UX/UI/design outsourced, that way, all the important decisions can be made in-house and there are less third party blockers. It's a team you can then scale. Think small and then scale your team as needed and as you learn more about your product. I never really see why it's necessary to go on a big recruitment drive at this stage when It can be really risky and very expensive.

Janine Davis President & Co-Founder Fetch Recruiting & Fetch Advisors

September 7th, 2015

Hi Sean,

You might want to consider a CTO for Hire/Tech Advisor to partner with you before you make any permanent hires. I see from your LI that you're connected to Eugene K from DexOne days - maybe you can hit him up for advice, or I know several CTO/Advisors that are really good in LA (these are gratis referrals I make - not contractors that I would place with you). A couple of them are happy to just do calls with startup founders, and it may turn out to be the most cost effective solution for your MVP. They can also help you define who to hire, and when to hire them. Finally, these people have really good reputations, so if you are going out for VC money, and they see these names in the CTO box on your org chart, it will make a difference.


Keep in mind it's extremely high demand/low supply for tech resources in LA. If you do decide to hire, how hard it is to do so will be partly based on the tech stack that you have picked (and if you haven't picked one, again, I highly recommend you get a Tech Advisor on board to make sure the right stack is picked for the task at hand so it can scale. It's not as important in the MVP stage, but you may as well do it right from the getgo).


In terms of the types of positions/roles, you mention that the Lead will manage external contractors. If you have contractors on hand, you probably only need 1 Full Stack Lead Engineer that is skewed towards the back end. Then you might luck out and get 1 UI/UX/Front End Person - if not, you could do 1 Front End and then you can definitely combine the UI/UX/Designer into one person. In terms of compensation, it really varies based on the stack, and the person's experience coming in the door, but you can assume that unless you luck out and get a co-founding CTO that can code and will do mostly equity, budget $140-200k plus 1-5 points for the Full Stack Lead Engineer, and if $100-150 + .5-2 points for the UI/UX/Designer.


Hope this helps!

Janine

Jake Carlson Software Development Manager at Oracle

September 7th, 2015

I agree with a lot of what's been said here -- in short, first hire a strong (lead) full-stack developer or a CTO with the capacity to actually develop a strong MVP. I say 'full-stack' but really his/her backend credentials need to be very strong, and his/her frontend development needs to be passable. He/she will be the bedrock of your product, and if he/she isn't good, the product will not be stable. 

Then get a good designer who will be responsible for both UX and UI. It's a bonus if the designer has some frontend development chops, but at a minimum this person must be both good at the research / concept stages as well as the visual implementation. There is no room for a separate UX and UI person in a small startup. This person must work well with the lead developer / CTO.

Your next product hire after those 2 will likely be another developer to work under the first -- maybe someone to focus on the frontend if the first developer is weaker in that area. I don't think you need another UX/UI person in the immediate future so long as that first hire is cutting it. 

Who the UX/UI person reports to largely depends on the team dynamics and skill sets involved, but one option is to have him/her report to the CTO -- or a separate C-level product manager if the CTO doesn't have design experience. If the UX/UI person reports to the CTO and you have that second developer, the fourth product hire might be another developer because at this point the CTO will be spending more time managing / directing, filling more of a product management role. 

Generally I'd say you need 1.5-2 devs to every 1 design/product person.

Jesal Gadhia

September 7th, 2015

At this point, you probably just need a lead developer and a freelance UI/UX designer with whom you can come up with wireframes. That same designer can deliver design comps based on the wireframes. 

Once you start seeing growth, you and your lead dev can start looking to bring in a mid/jr level developer to help out with other features. By this time, hopefully there will be a solid platform that lesser experienced devs can build upon and follow the larger architectural pattern established by your lead.

Peter Johnston Businesses are composed of pixels, bytes & atoms. All 3 change constantly. I make that change +ve.

September 8th, 2015

First of all there is no such thing as the "on-demand mobile space".
Spaces are for mature markets where companies slug themselves to death using marketing spend because there is no differentiation possible (think utilities).

In a start-up there are no rules - no defined way of doing things - no "box" drawn around "this is the way we do things in the on-demand mobile space".

Walk yourself back a little.

What technology will help you achieve your vision?
What technology is not being used to its best so far but could transform things?

Then think - how do I get the team together to make this happen.
Note the word team - one person comes with one idea.
E.g. If they are a JS expert, they will always use JS as part of their solution.

Now you are pre-judging your answer by saying you are used to having a CTO. Looking for me to say get a CTO. But you need to ask - is that a cop-out?

And the real way to do this is focus on the outcome.
Share the opportunity.

You know what you are trying to do. So delve into the technologies to do this.
Unearth technology people with brave, out-of-the-box ideas on how to leapfrog everyone with something simple, new and achievable by a startup.
Create a hack challenge, start a discussion, pose a question on a tech forum.

Then judge which of them has the leadership ability and the breadth of vision to make their idea - and your idea - reality. Let them flesh out the team they need.

You've just found your strong CTO. And a committed co-founder. 

Probably a new, composite vision as well which will take you outside that box you are trying to paint yourself into - the "on-demand mobile space".

Chris Korhonen Experienced Product Engineer & Leader, CTO of Minibar Delivery

September 7th, 2015

Totally agree with a lot of the comments so far - you're most important first hire is going to be a hands-on CTO who can get the MVP built, and really guide the direction of your platform. They would also be product orientated, and able to build a good understanding of your customers and their needs since it's their job to translate them into technology solutions. 

I'd also consider hiring a Product/UX designer at this stage. 











Chris Benskey CEO & Founder

September 7th, 2015

Get the best developers you can afford. Anybody at this stage needs to be hands on, so CTO / VP of Eng is an overhire. 

Rob Francis

September 7th, 2015

Have you considered using a service like UpWork to build your MVP? I'm not sure what the requirements are for your product, but you don't have to have a development shop built out in year one if it can be supplemented. Investors might see it as a positive too, adding minimal resources and staying "lean" so to speak.

If you prefer to build out the team, go with a Director of Engineering that has a combination of experience and potential. If you hire too many VP's and Chiefs early on you'll regret it down the road. Let that resource do as much as possible until it's clear that they need help, then find the best generalists that can help him/her at the cheapest price.  So no ux, ui specific, find people who can do multiple things.

Your organization will look much different every year that passes, so you want to keep things flexible so you can adjust.  Think more marathon, not sprint.