Big Red Car here. Hey, it’s cold and rainy here in the ATX. Hell, they were talking about snow and sleet in the Hill Country. Can that be right?
So, The Boss was talking to one of his brilliant CEOs and they got on the subject of the founding team for a startup. The discussion took an interesting turn.
Many startups — web based products in particular — entail a founding team which includes an entrepreneurial leader, an operations guy, maybe a marketing guy and a technical guy. There are variations of the theme but this is a recognizable structure. Some folks play more than one position but in general it’s leadership, operations, marketing and tech.
What is notably missing is a finance guy. Finance guys have long since faded into the background as they can be bought in bite sized increments as they are needed. We spoke of that here. Building An Organization — Financial Talent.
Startups can hire part time financial talent as shown here. Click on it to see it at a larger scale.
Now with the advent of a more structured approach to developing web based products, it is also possible to explore the notion of an outsourced tech team to provide the necessary development for a web based product — a web site. I am not suggesting outsourcing like offshoring though that is a legitimate approach. Rather I am suggesting exploring tech development companies which are emerging to provide a turnkey service for website development.
You will still need someone with a bit of experience and a learned hand to direct the outside effort but there are now a myriad of development shops which can provide a turnkey, sometimes fixed price development effort.
This should provide food for thought for a founder, entrepreneur, CEO who is a bit technical or is particularly adept at directing such efforts. You can still bring in a bit of talent to oversee things but you may not have to bring in a co-founder and to share the equity.
This strategy is NOT for everyone but it is worthy of your serious consideration.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.
My worry is about commitment. If my web stuff goes awry, will an outsourced techie get to it on my time-or will they put it on their to do list and get to it after they take care of other higher paying clients?
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Just like any other contractor. Make part of the payment contingent upon getting it done on time and hold back 10% to correct errors.
Buying is a skill.
BRC
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I don’t know.
Take blogs or canned solutions like Shopify off the table. With those I agree with you that buying it out smart is just fine.
But it’s hard to image any solution you can craft that doesn’t involve hacking stuff together and developing some tech that adds value, even at a data matching level.
I’ve done this with me as the architect. . Not certain I’ll do it again except on the most boilerplate of solutions.
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I am not suggesting for a second that one use a “canned solution” but rather that one hire a small boutique firm which specializes in crafting similar websites in the same industry.
Once you begin to delve into the details, the components are pretty damn similar. Price begins to devolve to $50-100K and 2-3 months.
This is not the Obamacare website, mind you.
I have stumbled on a number of such good firms in Austin and NYC. Seen their finished product. Checked their references.
If one were really adventurous — I am not — you could use a firm in the Ukraine or India to do the work.
Not for everyone but food for thought nonetheless.
BRC
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Understand and indeed after building a store on Shopify, learning a bit of Liquid, and not having to build the transactional piece, I’m with you.
If the tech part is the core innovation of the business, I agree you shouldn’t outsource. But many companies that call themselves tech companies are in reality media/retail/you-name-it companies that use tech. For those companies I see no reason to cross outsourcing tech as an option. As for any other function that is not the company’s competitive advantage.
I’m not an absolutist. We all outsource some parts of our business.
Not having technical chops in house is always a mistake in my experience even if you outsource pieces of it.
There are really few tech companies but we all use tech of course. The idea of the cutting line as being where the competitive advantage lies doesn’t work for me in almost all cases though.
Give me an example of the retail site that is not data driven even if the touch point to the market is a smart UX.
Tech is a tool. You will never stop needing it. Decide whether you want to continually pay for it out of pocket or become part of your resources.
Unless tech is completely secondary to the business – like payroll, which you outsource because it is always exactly the same process with no competitive advantage – you will need technical chops in house. Even if you outsource development/engineering, and infrastructure, and operations, etc., you still need enough knowledge to manage them.
I have always negatively viewed tech-driven startups without a technical co-founder.. but the same for any startup without a marketing (strategic, not advertising) co-founder.
Perfectly stated.
I agree that it is usually better to have tech in house, as most functions. What I say is that, if for any reason you need to outsource, tech is no different than sales or marketing for this purpose except in a few companies. It won’t work as having them inside, but it can be done. Anyway, I guess that we should define ‘tech’, it is usually so interweaved everywhere that I’m not sure it can be considered an area of the company, what would make my rumbles pointless 🙂
There are unlimited exceptions to every rule.
And interestingly, the big winners are always the exception of course!