Decision Making Map: How to Hire the Right Technical People for Your Startup

There is a variety of hiring options if your startup needs technical people on-board: find a technical co-founder or a CTO, a dedicated in-house development team or remote R&D agency. Let’s see how the stage of your startup affects the final hiring decision.

A successful tech startup is not solely about a great idea solving a real business challenge. It is also about implementing the solutions’ logic in software terms. Technology, or rather technical realization of the idea, is a matter of life-and-death for startuppers. Without it, the idea is often bound to fail. That’s why startup founders with no technical background — idea-guys — often look for someone to cover technical function up. Another reason why a startup needs technical people in the team is fundraising. From an investor perspective, a solo non-technical founder is more likely to fail.

Let’s figure out which options out there does an idea-guy have to bring technical people on-board.

Hiring Options for Your Startup

First-time startup founders rarely know how to start their digital product development (at least, from Logicify first-hand experience). Is this your case? If so, then you would definitely need an experienced tech partner to help you kick off. This person (or a team) will help you phrase the nutshell of the idea, translate business logic into a specific scope of functionality, and cut off core features for a minimum viable product (MVP).

If you do not know what to start your products with, at Logicify, we usually take the lead with a so-called “discovery phase” — interpreting your business idea in technical terms and scoping the future digital product. Contact us if you’d like to start.

There is no universal hiring recipe for a startup, so make sure yours is deliberate and fits specifically your startup needs.

Decision making map for a non-technical startup founder

Mind the variety of options out there. You can hire a technical co-founder, an in-house chief technical officer or software architect, a dedicated in-house ore remote software development team, or an R&D agency.

There is also a number of hiring sources. You can rely on referrals or online platforms for employees hunt, local co-working spaces or startup crowd, social media channels, such as LinkedIn or Facebook communities, dedicated directories listing software shops (Clutch, AngelList and alike), or freelance platforms.

Peculiarities of Hiring in a Startup

Before we’ll continue discussing possible hiring options, let’s pose for a minute to acknowledge peculiarities of hiring process in a startup.

1. Mind your startup’s stage and needs when choosing a hiring option:

• to quickly “glue” an MVP, an idea-guy hardly needs a co-founder or CTO working full time
• for application version 1.0 (provided you already have a basic specification), it is usually enough to outsource implementation to a team with varied skills (UI/UX designer, back- and front-end developers, quality assurance specialist)
• to scale and gradually ramp up functionality for version 2.0 and above, a startupper would most likely need a dedicated team working either in-house or remotely.

2. Whether it’s good or bad news for idea-guys, they would be forced to learn at least some bits of tech stuff and product life cycle to control the development process — what is meant by “agile development,” what is the future app’s tech stack and software architecture, which third-party integrations have been/would be used.

3. If your startup is built around a technological innovation or know-how, you’d better keep the core intellectual property inside the company (within co-founders or CTO). Do not share your innovation with hired contractors or even in-house team to prevent possible IP rights violation and having your idea stolen.

Find a Technical Co-founder

Running any business, startup included, is an overwhelming job for a single person. Having a co-founder really helps, especially if you complement each other’s skills and share responsibilities: you’re a business-and-marketing guy and your co-founder is a technical one.

Where to find a technical co-founder

• Dedicated online platforms, like СoFoundersLab or AngelList , whose main purpose is to connect entrepreneurs
• Startup-oriented social media communities, e.g. co-founders’ subreddit, Facebook and LinkedIn groups
• Offline events for startup crowd

Pros of hiring a co-founder

• If you’re lucky to find a truly good co-founder, you will always have a person to rely on
• Now a solo founder does not ride off in all directions. Every co-founder focuses on his/her strong points and domain expertise
• A technical co-founder will become a person to bridge the gap between business and technology, which is often a key to success
• With a co-founder, idea-guy has higher chances to succeed (two heads are better than one) and raise funds since investors care about security and predictability of companies they invest in.

Cons of hiring a co-founder

• Not every startup needs a technical co-founder. This certainly depends on its value proposition and competitive advantage whether an “idea guy” alone can rule it
• Finding a tech expert is easier said than done. Engineers are really well-paid, so they usually do not have motivation to quit a cushy corp position to join a startup
• Co-founding means share of equity and overall profit
• There is always a risk of being trapped in business relations with a person you do not like. A key component of a successful business is human relations, which usually take time and efforts to nurture.

Resolution: If technology is a core of your startup and/or you are ready for equity share, then finding a technical co-founder is generally a clever idea. However, you’d better prove your business concept before looking for the second.

Employ a Chief Technical Officer

Technical director, or chief technical officer (CTO), is an important and responsible position in a startup. A person to take this post should have excellent technical skills, many years of experience in the industry and a firm understanding of where and how business aligns with software, and vice versa.

Where to find a CTO

• Your professional network
• Job search websites or recruiting agencies (these are usually too expensive for startups though)
• Networking and business-oriented social platforms, like LinkedIn
• Software R&D companies with “CTO-as-a-Service” option. These could be found on online platforms like Clutch.co, Goodfirms.com, and alike
• Mentorship networks for startup founders

Pros of hiring a CTO

• Just like a technical co-founder, CTO bridges the gap between business and technical functions in a startup and gives practical and applicable hands-on advice to the founder
• If you employ a CTO on initial stages of startup’s life, he/she is quite likely to have sufficient dev skills to “glue” a simple MVP alone. So you’ll cut costs on a minimum viable team
• CTO will also manage the technical team — whether in-house or remote — once it is hired
• CTO receives a fixed cash compensation, not equity share.

Cons of hiring a CTO

• The candidate for a CTO position should have a firm engineering background, broad technical and business outlook, expert development and operational skills. Such people are as rare as hen’s teeth and always in great demand
• CTOs usually come with a high price tag, unaffordable for a startup with no revenue
• The term “CTO” may mean quite different scope of charges and responsibilities, so it is hard to find a person to fit the position in your company
• Even if you hire the most seasoned CTO, they would not be able to cover all technical function forever. One day, you’ll need to extend the tech team.

Resolution: A CTO — either in-house or remote — is definitely needed in any tech startup without a technical co-founder. Like any master of the craft, an experienced CTO is hard to find. Alternatively, startuppers may find a CTO-on-demand, for instance, through a mentorship program, for weekly/bi-weekly review of the chosen tech strategy and tools, MVP scope etc.

From our experience, a “mixed” team of an in-house/remote CTO managing a remote subcontractor plays nice for a long-term project. If you are looking for CTO-as-a-Service, we’ll be glad to help.

Find a Subcontractor for Software Development

Hiring a subcontractor for web development is a common practice. Outsourcing is quite an option for startups on its early stages (Minimum Viable Team for a Minimum Viable Product and beyond). It makes sense to employ an in-house team later, once the startup matures and scales.

Where to find a subcontractor

• Via referrals from colleagues and startup crowd
• Dedicated online B2B directories, like Clutch.co, GoodFirms and alike
• Online freelance platforms, like Upwork, Freelancer and alike

Pros of hiring a technical subcontractor

• Founder can always switch subcontractor if things do not work out as expected. They recommend to start cooperation with a new vendor by a small trial project. If it turns out smooth, move to a more complex one
• Most software R&D shops have a legal framework for cooperation with clients, which means startuppers have their IP protected with an NDA and explicit transfer of rights
• Outsourcing can cut costs, a huge advantage for lean startups. Because of stiff competition on the market of software development, there are high chances to get quality service at favorable rates, compared to local, e.g. the US, market
• Outsourcing is a great option for a simple and fast MVP if you already have it scoped out
• On initial stages of development, you could only hire professionals with the needed seniority level and skills per a specific scope/tasks — no overpay for a senior dev instead of a middle, or full-time designer if he/she is needed for just a few hours a day
• Disadvantages of remote communication are easily eliminated if you meet with the team offline, on a bi-weekly or per-sprint basis.

Cons of hiring a technical subcontractor

• Nobody is insured against the risk of hiring a wrong vendor and the price can be hefty
• Sometimes, outsourcing software development comes at the expense of the founder’s losing understanding, control, or ownership of what a startup is doing. Especially, if a non-technical founder relies too much on the remote vendor
• To entrust development of software to a remote vendor, founder is advised to scope the project out. Otherwise, the requirements will be so high-level that your team will basically pseudocode a software that noone would be using
• Overall control over the process and communication with a remote vendor are, as a rule, more complicated and in tact than with an in-house team.

Resolution: Outsourcing a minimum viable team for an MVP is often an optimal decision for lean startups. Even wiser one is retaining the same vendor for further cooperation in case you were happy with the fruits of this cooperation. To build trust with your subcontractor, start with an easy trial task and then keep on to more complex ones as there is trust and mutual understanding.

The Choice Is Yours

There is no one-fits-all staffing option as every startup finds the preferred approach, or a combination of multiple ones, along its journey. There is also no guarantee the decision you made is ultimately right; leastwise, make sure it is an informed one — in terms of your startup stage, available time and money. Remember that various stages in a startup life require different leaders, which dictate hiring options for its founder.

No matter the final hiring decision, your main responsibility as a non-technical founder is making sure the business happens. You can concentrate on the business side while a dedicated professional, like Logicify, takes care of the technology for your startup.

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Originally published at https://www.logicify.com/en/blog on June 10, 2019. Find more stories like this in our blog.