Loading...
Answers
MenuOutsourcing the tech on a booststarp startup ?
Answers
Hi.
good questions.
Answers:
1. Yes and No - it depends on what you're developing. If it is a cyber product or software, then investors would (usually) expect you to have in-house developers (meaning programmers which are part of the core team). If it's a website that offers services or an app, and you prove to them (through metrics/statistics) that you don't need an in-house programmer, it should be a problem.
2. I can't name any known companies at the tip of my hat, but I have advised hundreds of startups and many of them outsourced their development. If you need, I can connect you with a development company that selects 1-2 startups a year and does development + support for them free of charge, in exchange for equity/shares in the company. Your only costs would be the legal fees for the agreements.
I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david
Outsourcing development could go either way. The key to success with any development is having two components:
1) Developers who understand how to prove the business AND technical concept.
2) Having a development pattern/workflow that can help you transition the technology upon completion. This is the one I see most founders struggle with (see below for an solution).
While I'm sure there are success stories of bootstrapped companies who successfully outsourced initial development, I can't name any notable ones whose stories are easily accessible. In my own personal experience, my firm and I have been hired by several hedge funds and private equity firms over the years to build new products. The most recognizable is TopGolf, where they outsourced some of their game play data movement (a gameplay product). We've also built a whole bunch of software for manufacturing companies, pipeline firms, etc. The point: it's rarely ever the sexy stuff you hear about, but it is very successful.
The challenge of recruiting a tech cofounder or tech talent of any kind is a problem I repeatedly see amongst the founders I advise. New companies need all kinds of "basic" stuff setup before you can develop anything... email, domain names, hosting, Github accounts, credit card processors, an email list system, etc. This stuff sounds simple, but it's not. Wonder why your email isn't going out to the person who just signed up? Did you check your DKIM settings, DMARC records, and DNSSEC? Those are all things the "sideline" or "affordable junior level" developer tends to ignore. The point: It's never as simple as just building an app or POC/MVP (that's the fun part).
Because this is such a common point of failure, I launched a service to do all the setup (see https://butlerlogic.com/startup). We don't build POC's, MVP's, apps, or any of the fun stuff.... we build the predictable/reliable foundation that developers need (but hate to make). It gives non-tech founders an advantage in attracting the right talent (who can focus on the fun part). Bottom line, you can recruit tech folks or firms who are passionate about your BUSINESS IDEA. We built our own workflow, based on decades of experience doing this. We've kept costs reasonable this way, while delivering world class tech foundations (we're kind of known for this... by 2.5M developers). We provide a free 15 minute call here on Clarity for anyone interested in how this works and whether it's right for their startup.
It is better to work with an outsourcing company in the MVP and early stages to build the product than finding a tech co-founder. There are several reasons:
1. it is very hard to find a reliable tech founder.
2. you will have to convince the person about your idea and also give away liquidity.
3. Even if you find, it doesn't mean that tech co-founder will be able to do everything, you still might have to hire some developers to do tech work.
I would suggest to go with outsourcing now. I have written a detailed blog here, you can check more details:
https://www.simpalm.com/blog/do-you-need-freelancers-or-co-founders-for-technology-startups
I would suggest to go for an outsourcing consultant for few months and you can anytime discontinue the service once you feel that you have reached to the right market. I can help you out with the complete website design and along with that will also focus on website maintenance, social media marketing, content creation, brochures and PPTs for you. Please reach me out on pooja.s@xeo.marketing for detailed discussion. Thanks!
Regards
Pooja
Related Questions
-
How much equity should I ask as a CMO in a startup?
Greater risk = greater equity. How likely is this to fail or just break even? If you aren't receiving salary yet are among 4-6 non-founders with equivalent sweat investment, all of whom are lower on the totem pole than the two founders, figure out: 1) Taking into account all likely outcomes, what is the most likely outcome in terms of exit? (ex: $10MM.) Keep in mind that 90%+ of all tech startups fail (Allmand Law study), and of those that succeed 88% of M&A deals are under $100MM. Startups that exit at $1B+ are so rare they are called "unicorns"... so don't count on that, no matter how exciting it feels right now. 2) Figure out what 1% equity would give you in terms of payout for the most likely exit. For example, a $10MM exit would give you $100k for every 1% you own. 3) Decide what the chance is that the startup will fail / go bankrupt / get stuck at a $1MM business with no exit in sight. (According to Allman Law's study, 10% stay in business - and far fewer than that actually exit). 4) Multiply the % chance of success by the likely outcome if successful. Now each 1% of equity is worth $10k. You could get lucky and have it be worth millions, or it could be worth nothing. (With the hypothetical numbers I'm giving here, including the odds, you are working for $10k per 1% equity received if the most likely exit is $10MM and the % chance of failure is 90%.) 5) Come up with a vesting path. Commit to one year, get X equity at the end. If you were salaried, the path would be more like 4 years, but since it's free you deserve instant equity as long as you follow through for a reasonable period of time. 6) Assuming you get agreement in writing from the founders, what amount of $ would you take in exchange for 12 months of free work? Now multiply that by 2 to factor in the fact that the payout would be far down the road, and that there is risk. 7) What percentage share of equity would you need in order to equal that payout on exit? 8) Multiply that number by 2-3x to account for likely dilution over time. 9) If the founders aren't willing to give you that much equity in writing, then it's time to move on! If they are, then decide whether you're willing to take the risk in exchange for potentially big rewards (and of course, potentially empty pockets). It's a fascinating topic with a lot of speculation involved, so if you want to discuss in depth, set up a call with me on Clarity. Hope that helps!Ryan DravingRD
-
Where can I find programmers willing to join a growing mobile start up for equity only?
You won't find anyone worth adding to your team willing to work for equity only, no matter how compelling your product and business is. The realities of the talent market for mobile developers anywhere is such that a developer would be foolish to work only for equity unless they are a cofounder and have double digit equity. Happy to talk about hiring and alternatives to full-time hires.Tom WilliamsTW
-
What is a normal churn rate for b2b saas company with an average monthly revenue of $850 per customer? Is 10% of the total monthly sales high or low?
10% of the total monthly sales churning on an absolute basis is near fatal. That means that within 5 months, you have 50% absolute churn per year, which reveals fundamental flaws with the service itself. Anything above small single digit churn is telling you and your team that customers are not seeing enough value in your product. I'd start by doing as many exit interviews as you can with those that have churned out, including, offers to reengage at a lower price-point while you fix the issues that matter to them. Happy to talk through this in more detail in a call.Tom WilliamsTW
-
What do (bootstrapped) startups offer to new sales hires? Commission only? What are some good examples to keep people motivated and still survive?
Generally bootstrapped startups should avoid salespeople, for a few reasons: a. they typically can't afford the base and overall comp required to attract sales people who can actually sell / or afford to support them with marketing, management, etc b. it will be very difficult to find the rare person with the right mix of sales and startup DNA along with the critical domain knowledge, consequently the startup is likely to settle c. the founders need to be very involved in the selling and customers will demand it That said, if the plan is still to hire a salesperson, find someone who has demonstrated sales success in startups and is excited by the early stage in company building. Create a comp plan heavily leveraged on sales results (unless you are in an industry where 100% commission is a common practice, would recommend against $0 base as this creates the false impression that your hire isn't passing time with one company while looking for another job with a richer comp plan - you want your rep focussed). Sell the vision and opportunity to be part of a growth story. I have written a several blog posts on hiring sales people into start-ups. You might find these useful: http://www.peaksalesrecruiting.com/ceo-question-should-i-learn-to-sell-or-hire-a-sales-person/ http://www.peaksalesrecruiting.com/start-up-sales-and-hiring-advice-dont-stop-selling-once-you-hire-your-first-sales-rep/ http://www.peaksalesrecruiting.com/hiring-start-up-sales-reps/ http://www.peaksalesrecruiting.com/startups-and-salespeople/ Good luck!Eliot BurdettEB
-
How can I become an idea person, as a professional title?
One word: Royalties This means you generate the idea and develop it enough to look interesting to a larger company who would be willing to pay you a royalty for your idea. This happens all the time. Rock stars, authors and scientists routinely license their creative ideas to other companies who pay them a royalty. Anyone can do it. Your business, therefore, would be a think tank. You (and your team, if you have one) would consider the world's problems, see what kinds of companies are trying to solve those problems, and then develop compelling solutions that they can license from you. You have to be able to sell your idea and develop a nice presentation, a little market research and an understanding of basic trademark and patent law. The nice thing about doing this is that if you develop enough cool ideas you will have royalties coming in from a lot of different sources, this creates a stable, passive revenue stream that requires little or no work to maintain. Start in your spare time and plan on the process taking 3-5 years. Set a goal to have a few products in the market that provide enough revenue (royalties) to cover your basic living expenses. Then you can quit your day job and dedicate more time and increase the momentum. A good idea business should have dozens, if not hundreds of license contracts generating royalties. It's possible to pull this off. And it is a fun job (I'm speaking from experience).Mike MoyerMM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.
.jpg?1584552144)
