Social Matchbox - Latest Comments

Re: How To Find A Programmer To Build Your Startup Idea

SocialMatchbox — Wed, 06 Aug 2014 14:49:59 -0000

Thanks for your comment. You bring up some good points that were addressed in original post.

I am going to start by pointing out that I AM NOT suggesting that the founder(s) outsource hunting for or recruiting or hiring. The same is generally true for sales. Some people need help, if they do...that is something I help people with. I AM saying that someone who is not an engineer/developer SHOULD get a stand in Software Architect/CTO/Engineer who can be their coach/mentor/help when it comes to screening, making the hiring decision(s) and architectural decisions. This person serves as something like a translator. That might cost more because this is someone is more senior and who is going to get fewer hours or it might just be a friend who volunteers to help or who helps for equity (.0x-.xx% range for helping with setup, probably the lower end of the range or maybe $100-150/hr) if it is just a few hours or more like $85-120/hr if it is more like 10+hours.

I'm going to break out college student rates. If you are a founder and you can't find college student who are willing to work for $12-14/hr then you are going to have a really tough time when it comes to sales. There are some great ones out there who I would pit against a lot of Sr. developers and professional freelancers. Finding them...that is a different story. It takes time and a good strategy and a lot of tenacity to find good people at any level. More importantly, this is only a reasonable idea if you have a stand in Software Architect/CTO/Engineer who can do architecture, mentoring, paired programming at times, code reviews, etc. Otherwise your app will be on the fast track to failure.

Next, you say that someone can't get a good developer if they don't pay the highest possible rates. If, by amateur, you mean someone who is not charging mercenary rates then fine. Look, I have been talking to developers about startup product development and build outs for a hell of a long time and one thing is certain: if you want to pay more there will always be an option for that. Because someone charges less than the user group beer discussion rate or less than a full service development firm charges does not make them less professional. Higher rates do not equal better developer. Part of the problem here is that people all generally try to charge the same rate - good or bad. A founder's job is to find someone who is good, honest, easy enough to work with, and interested in their effort. This is a tall order. Someone asking for $150-200/hr (an individual) to build an MVP is a mercenary. To your rate level information, I just made an update to reflect inflation and am working on a new series of posts that will address this subject in more detail as well as update the economics consideration.

Note that benefits and other costs including software licensing fees + software tools are considered in the post. Unless you are talking about a license for Oracle or SQL Server or something on par with that kind of stuff in which case we are talking about different things.

For your comments about time between projects, I think that is a valid point. It is really difficult to be a full time freelance developer and do business development at the same time. One developer I know created http://www.bustaname.com to help with lead generation. A lot of developers I know hang out at co-working spaces and go to a bunch of networking and user group type events to trawl for leads. They also partner with people. Nobody ever said that building a lead/work pipeline was easy. BUT, nobody (e.g. the idea guy or gal) should be punished because the developer is a trench fighter who is struggling to find work or projects. If that is the case then said developer should get a job at an agency like Intridea.com where they can focus on what they are best at.

Additionally, full time freelancers are NOT the only option/route to take. There are plenty of great developers, designers, etc. who have full time jobs and are willing to take on ONE (not many) project. For someone trying to build an MVP this is probably a bit more ideal than hiring a full time freelancer. REASON? Simple: you might actually have a chance of converting that person who has a day job and no other projects into a co-founder. Remember, we are talking about startup product development and MVP's here not sub work for creative agencies that pays top dollar. Another reason is going to be covered in more detail in my upcoming series of posts - what goes into an MVP is not a fully specced out product complete with a Scrum Master and user stories. It is a lot more of a growth hacker. Hiring someone to primarily help build out a product comes later. I'm not saying that you (for example) could not, just that you can't always generalize when it comes to who is right for an early stage person.

Re: How To Find A Programmer To Build Your Startup Idea

SIMpalm — Fri, 11 Jul 2014 07:37:56 -0000

Yes it is very important to select the right developers from starting. there are plenty of mobile, ipad, iphone app developers in various regions of USA and other countries. If you really want to get the best results in very less time, you have to search for the same on internet.

Re: How To Find A Programmer To Build Your Startup Idea

romomo — Wed, 25 Jun 2014 10:10:28 -0000

Senior level Freelance programmer here. While I understand this information is quite old, it's important to note that it's also quite incorrect. The rates you're suggesting will get you an ametuer developer at best. Depending on the length of a project, expect to pay between $80-$200/hour for professional work. There are several other factors to consider: benefits (or rather, lack there of), consulting, time betwern projects, software licensing fees for professional tools, and the fact that you likely are not paying a single person. You are asking another organization to save you the trouble of hunting for, recruiting, screaning, hiring, pat ing benefits to, and managing a professional developer. If you want shoddy work from a broke college student who will copy-paste from google, then by all means, use this formula. If you want professional and managed development from a professional, then you better hit the books and do a bit more homework.

Re: How To Fund and Actually Build Your Startup’s Minimum Viable Product

socialmatchbox — Fri, 04 Apr 2014 17:15:37 -0000

Thanks! Stick around, we have a lot more where that came from and more on the way. Also, follow us at @socialmatchbox for up to the minute posts when we think something is worth sharing.

I'm no lawyer, but I think you should pit "Principles" against common sense, then consider that not all founders are coming from a textbook case.

On the subject of dollars:
You ask why drop money up front, but not why drop thousands into a business that is a ticking time bomb. Time is money for most of the founders that I know. For non-technical or quasi technical founders they are hiring freelancers at and paying for it. For both non-technical and technical founders, they are investing their time. 2-3 months of full time labor on a startup can add up to a lot more than $20k, and if you are committed to building a viable business the company is your vehicle not a disposable concept. If you get something that is worth something, you will need to protect it - that might come from the progress against your early objectives and then one of your co-founders decides to take a job. What happens to your valuable research or early prototype that you guys worked on for the first 30-60 days while you were making early customer research calls? Worse, what if you have two co-founders and both move on, but you want to keep going? If your idea is just a flash in the pan, a side project, etc. then maybe it doesn't matter. If you are a committed entrepreneur with support from friends, family, or if you are betting on yourself then you should probably care.

I can't tell you how many people have poured money into an effort to get an MVP or a company and ended up with a nightmare that resulted from not having the right legal advice or the right user experience design or the right developer. It isn't like you can go to the big firm and get the right legal or to the big dev shop or design agency and get the right design either. There is no shortcut for asking around, asking the right questions, and checking references. Also, you can't just take the referrals from people you know and assume their referrals are the right people either. Founding company, building a product, etc. is a lot of tenacity and trial and error. The initial prototype that gets designed or built happens really fast, but you are looking at the tip of an iceberg not a final product. Mobile, web and software products as well as physical products are complex in ways that you just can't comprehend. Hell, even most engineers can't see past their current assigned task. We all get tunnel vision sometimes.

One more thing that I would add is that your comfort level or knowledge level or mentor level is not the same as someone else's. Some people need more help than others. What I can tell you is that legal rules change, vary, and are really complicated or nuanced in ways that a lay person can't possibly understand or keep up with. Even the most experienced founders, ones who have been through one or more exits still get help. The balance of your early legal costs are going to be related to patents, but there are also things like trademarks and things that you might want to protect. That said, you might not need trademarks or even to be incorporated if you are just conducting early customer research. Every situation is different.

Re: How To Fund and Actually Build Your Startup’s Minimum Viable Product

Craig Morrison — Wed, 02 Apr 2014 19:22:39 -0000

I'm a little surprised you don't have any comments on this post. It's fantastic. Not only that, but you're providing some really valuable resources in offering to personally help and make introductions.

I'm very big on Lean Startup principles, but one thing that always gets me is the dropping of the legal fees up front. MVPs, early adopter interviews, these are all to test to make sure you are building a product that people actually want right? So why drop $20k up front before you've even proven a market?

I feel more comfortable taking the risk of building something to test a market, then, with enough proof, I'll spend money on legal fees. I'm not saying you don't need the legal stuff, of course you do, but, maybe not until you're sure you've actually got something to protect.

Thoughts?

Re: Why Recruiters Are Your Friends, *Restrictions Apply

Nicholas Meyler — Sat, 01 Mar 2014 22:30:49 -0000

Yours is a very good reply. Megan's article is basically just a smear job, though, and totally inaccurate. It really is suspicious and so 'over the top' that it makes me laugh to read it. In my book a 'crappy' recruiter is someone who doesn't have the initiative to go out and contact the best people, and never worry about the consequences. Also, as you are probably aware, the rate of mental illness among software engineers is 3x the general population. I have been carefully and accurately emailing top scientists all over the world in dozens of fields for decades, have many good friends that I've made along the way, clients who love my work and give me stellar recommendations, and many happily placed candidates, including people in the $1million+ per year category, and people who repeatedly ask to get on my well-targeted lists. No one has ever complained like DHH before, and he is clearly mentally aberrant. I don't think I can accept any of the blame in this case. I think Megan is very clearly a star-struck naïve pawn that the ruthless DHH seduced into writing a very biased and fraudulent article, which even plagiarizes me. Very horrific for her reputation, potentially. Meanwhile, I'm having a good time laughing at the ridiculous mistakes she made.

Re: The Business of Business Websites

Dave Aronson — Fri, 09 Aug 2013 08:43:58 -0000

Depends what you mean by customization. IIRC it won't let you edit the CSS, but you can do a lot with the design tools they provide plus putting divs inside the pages with inline styles on them (deprecated though that technique generally is). It also *used* to be rather limited in what widgets, HTML, JS, etc. you can put in it, but now they've got an "HTML Box" widget that you can put pretty much anything in.

You're probably right that a paying customer looking to promote a business to the undecided public will want something much easier to make fancy-looking. But people who want something to look fancy wouldn't be hiring me; I'm more of a back-end guy. :-)

Re: The Business of Business Websites

socialmatchbox — Thu, 08 Aug 2013 22:12:15 -0000

Dave, how customization friendly is a Google Page? I'm guess not very much so. I think that could work for a local group of people who are all members of a club, but maybe not for a business that is looking to impress customers.

Re: The Business of Business Websites

Dave Aronson — Thu, 08 Aug 2013 20:31:39 -0000

I haven't done web-presence for pay, but for nonprofits (like my local Toastmasters district, Mensa chapter, and briefly my Toastmasters club) I usually set them up on Google Sites. That integrates very nicely with GMail, Google Calendar, Google Voice (which can send transcripts to GMail), Google Drive (formerly Docs), and lots of other great free tools from Google. If they have few enough people, I can even sign them up for Google Apps and make a bunch of email accounts, though I prefer to use simple email forwarders, and many domain registrars include a hundred or so of those for free.

Re: My Developer Conference Envy

Dave Aronson — Fri, 02 Aug 2013 07:58:41 -0000

http://rubydcamp.org/ has all the details.

Re: How To Find A Programmer To Build Your Startup Idea

socialmatchbox — Fri, 02 Aug 2013 02:29:33 -0000

Great question. Step 3 covers this, but does not mention health insurance, taxes or insurance specifically. I am planning to create an updated and adjusted for inflation version of this post sometime in the near future and will address those topics in more detail then.

Re: My Developer Conference Envy

socialmatchbox — Thu, 01 Aug 2013 22:50:20 -0000

When are these? I have been to RubyNation. Is it safe to assume that NationJS is also hosted by Gray? What is NFJS?

Re: My Developer Conference Envy

socialmatchbox — Thu, 01 Aug 2013 22:49:28 -0000

When is RubyDCamp?

Re: My Developer Conference Envy

Dave Aronson — Thu, 01 Aug 2013 13:14:58 -0000

RubyDCamp! It can't get any cheaper than that -- it's free, including lodging and meals...

Re: My Developer Conference Envy

Vince B — Thu, 01 Aug 2013 08:15:16 -0000

NationJS, RubyNation, and NFJS are in the DC area as well.

Re: How To Find A Programmer To Build Your Startup Idea

socialmatchbox — Mon, 24 Jun 2013 14:15:28 -0000

The point of this thread is to educate founders about what the market cost of labor is if they hire someone full time vs. freelance so that they understand the difference in cost so I am glad you threw out salary/1000 = yearly rate as a scenario.

Here is how your formula adds up in comparison:

If you hire a regular full time employee (FTE) at a salary of around $85,000/yr (before benefits) there are 1920 hours in a year (assuming that you work 160 hour work weeks) + 30 hours of full time paid time off that can be used for whatever). If you add in the burden (health insurance/401k/etc. on top of that and don't count the paid time off as part of the employee burden) that adds up to 1950 hours per year of paid employee time. A lot of people round that number up to 2000 to keep things simple (I'll skip that).

The FTE cost to a startup or company is $43.59/hr w2 before burden and $50.74/hr w2 fully loaded (with burden (benefits)).

In your formula, the same worker quits their day job and goes out on their own working as a freelancer for $85,000, but charges the employer $85/hr. At this rate, the founder or employer will have to pay the freelancer $165,750 for the same amount of hours.

Considering that the freelancer is going to eat $7.15 per hour of burden which adds up to $13,942 per year that is quite a markup. Even if you add in the cost of a nice co-working space membership ($4,200/yr) and private health insurance ($6,000/yr), the freelancer is still only seeing a cost to themselves of $24,142.50 per year. They get to keep the knowledge they got from conferences and the Mac Book Pro that they bought to make things work.

The profit that someone using your formula would make under this model is roughly $24,142.50. Not bad.

The only problem with your model is that it essentially doubles the cost of hiring a developer for a startup founder. This is the kind of thing that makes founders look to offshore firms and inexperienced talent to build their products. It is worth pointing out that many solutions shops charge around $150k for a prototype app that heavily leverages open source code, but that comes with design help.

In other words, there is no way that your formula benefits the founder. It drives their cost up and makes it so that they will probably not have enough money to get the job done.

Don't get me wrong, there are companies out there who will pay top dollar for work to be done by programmers. I know some people in the DOD community and in the Ad Agency world who will pay top dollar for a shampoo or diaper app or website to be developed. I know a lot of developers who don't mind working on that stuff too. However, there are plenty of people who enjoy working on cutting edge and interesting stuff.

When the price of labor goes up just because there are people who will pay it then founders need to consider the source of the labor. There are plenty of founders who hire some full time employees and pass on others because of the motivations of the potential employees. I don't know everything that there is to know, but the odds work in favor of the founders out there who can discern the motivation at work in the heads of their team members. Teams that are working toward the same objectives for a little below the market rate, even at well funded startups, have a much better track record. I think there is a strong correlation between perceived value of equity (e.g. stock options) in those cases. There is some good discussion about the perception of stock options in Douglas Edwards's book 'I'm Feeling Lucky' that would be good reading for any founder in search of more data.

Re: How To Find A Programmer To Build Your Startup Idea

Jon — Wed, 20 Feb 2013 02:38:10 -0000

Way wrong on those salary vs hourly rate figures.

Check out the contract employees handbook - google it....

Rule of thumb : annual salary / 1000 = hourly rate....

Re: How To Find A Programmer To Build Your Startup Idea

Travis — Wed, 23 Jan 2013 14:39:20 -0000

jb> Very interesting post. I am working on a Start-Up, and would like to discuss further details with you. Please email me at travis@529easy.com
Thanks,
-Travis

Re: Visiting Houston & Dallas, Coworking Space Recommendations Wanted

David Thach — Thu, 01 Nov 2012 14:24:53 -0000

One more that is relatively new to the scene in Dallas: http://startupspaces.biz/

Re: Former Washington Area Startup, Social Gaming Network (SGN), Acquired!

D Mcdonald J — Fri, 26 Oct 2012 00:54:23 -0000

"SGN’s acquisition is like a book end on the app bonanza" You weren't kidding, a year later and mighty Zynga is posting losses three quarters in a row.

Re: Is This Why Some Startup Founders Are So Intense?

iMobileRescue Inc — Wed, 10 Oct 2012 21:49:02 -0000

This is exactly it. Having the extra maniacal edge, is what gives you the actual edge. It's believing you can do anything. It's massive scrutiny to the details. It's an unforgiving, non passive approach to getting the right things done, FAST. AHHHH!!

Re: Launchbox Digital Alumni & Co-Founders of JamLegend Call It Quits

Katie Mangiamele — Mon, 04 Jun 2012 14:36:19 -0000

this sucks i loved jamlegend, im a poor ass chick that doesnt have guitar hero or rockband and jamlegend was my life! i miss it so much and i wish there was a way to bring it back because every other guitar game thing on the internet is SHITTY. :( please come back jamlegend we miss you!

Re: The Heart of The Start

Kent Julian — Tue, 27 Mar 2012 09:12:06 -0000

Very well said Bob! Thanks for sharing these great insights. I couldn't agree more when you said that "The most successful startup teams start with people who are working together on something that inspires them". Indeed, working with people who have more or less have the same passion or interest like you do will really create a very positive working environment that will not only mobilize you to be better individually but will also help you work effectively in a team. Also, great points about pointing out passion-driven employment and working relationships. Two thumbs up for you! Keep on inspiring Bob.

Re: How To Find Interns For My Startup

Gayle Barr — Thu, 09 Feb 2012 14:27:48 -0000

Great information... need a few interns and now have to find the sites that are not out there.

Re: The Heart of The Start

Jafar — Wed, 08 Feb 2012 06:24:26 -0000

very nice article. the dan pink video link was awesome too.