Hire Freelancer to Manage/Maintain Your Online Web Business?

Hire Freelancer to Build Your Online Web Business?

• A substantial portion of your costs and how much money you raise
• The quality of your product
• How much maintenance you’ll need down the road and when you rebuild
• How much equity you give up
• Your success or failure

So here are a few of my own personal FAQs when it comes to building a web business for the first time, specifically in terms of finding talent and estimating its costs.

Should I hire a full-time programmer, a web development company or an independent contractor?

Independent contractors: they aren’t your employees and usually do freelance work on their own.

• Pros: schedules and relationships with contractors are usually more flexible than those with full-time employees because you can start and stop projects and adjust hourly schedules as needed. This flexibility also implies you won’t get locked into the long-term cash outflow of an employee salary. Additionally, you don’t have to worry about employment liabilities with contractors (more on that later). Lastly, contractors are generally cheap in terms of equity because they work for cash.
• Cons: my biggest problem with contractors is that they want to get compensated for their time and unfortunately not for their results. That usually means they have more incentive to take a longer to do any given job and additionally that they’ll do the minimum amount of work to earn their paycheck. I’m not trying to imply that contractors aren’t honest, because I’ve enjoyed working with countless contractors, but I am saying that they’re first priority is getting paid while your first priority is getting a great product. It’s understandable because they have no long-term, vested interest in your company the way an employee does. Lastly, an individual contractor will require a lot of leadership and technical involvement on your part because you most likely will be the project and product lead if you have a small team.
• Recommendation: remember, contractors usually want to get compensated for their time, so you’ve got to be crystal clear with your expectations up front. The more questions you can eliminate in the beginning the less likely the contractor is to say she didn’t understand what she was doing, and the less likely you’ll get sucked into a never-ending contract because you kept going through multiple iterations to fix constant mistakes. This alone can kill your business by pushing you over your expected budget. In the beginning, draft a comprehensive explanation of exactly what you want (a “requirements” document) and if possible provide visual mockups (I like to use a tool called Balsamiq – it’s easier than pen and paper and much more efficient). Then hold a meeting to discuss those requirements in detail, before you begin. The purpose of this meeting is to align your expectations and agree on a timeline. For one of my projects, I personally spent about 10 hours in a room with a contractor discussing requirements and negotiating a price before we began – it paid big dividends down the road. Once you do start, check in regularly – I’d recommend daily. I also highly recommend that you get a fixed contract with contractors whenever possible. This puts a cap on your spending and ensures that you’re paying for results and not time. Once you’ve taken those steps summarize everything in a legal contract, ideally yours. It’s usually difficult getting developers to agree to fixed-rate contracts, but it's worth putting in the extra time searching for someone who will, and the more detailed your requirements and mockups are, the more likely you’ll get your fixed rate. In my experience, contractors are great for doing quick bug fixes and straightforward feature builds on an ad hoc basis, but I’d hesitate to pay a contractor to build your site from scratch – unless you know exactly what you want, understand the technologies being used and are willing to put in the time as a manager.

Web development companies: web dev companies are teams of contractors - you hire the company, and it assigns its contractors to your project.

• Pros: hiring a web dev company generally affords the same benefits of hiring individual contractors, plus a few more. One big benefit is the higher (hopefully) relative quality of work since you can presume the company has vetted all their employees and works according to industry best practices. In short, the work tends to be a lot more professional. A related benefit then is that of management – while you should expect to keep regular tabs on their work, the web dev company will usually provide their own product or project manager who will ensure that the contract stays on schedule so you don’t have to spend as much of your time doing it. This frees your time for strategy and operations.
• Cons: this is arguably the most expensive (cash-wise) option, but you are paying a premium for all the above-mentioned pros. If you hire a reputable dev firm, you probably won’t spend under $10-$20K per month. In fact, it's not unheard of to pay >$20K / month for a good dev firm. They’re also not going to be as flexible as working with an individual. They’ll want longer (usually a month at least) contracts and usually will want to use their own legal contracts instead of yours.
• Recommendation: If you can afford the cost and you don’t want to be locked into a long-term employment contract yet, this is probably your best option if it’s a complicated project and/or if you are building your first product from the ground up, and particularly if you don’t feel comfortable having to actively manage developers yourself. Before approaching a web dev company, put together your detailed requirements and mockups – in fact, you should always do this no matter who you hire. Then get quotes from several different development companies and compare the expected quality and cost of them all. Make a spreadsheet and do a cost-benefit analysis. Also, use your own legal contract if possible and try to lock down that fixed rate. Look for web dev companies like Happy Fun Corp who have extremely talented, communicative and professional engineers, world-class client bases, and founding teams with successful track records running their own tech startups. And of course, look at their prior work – odds are, if you don’t like the websites they’ve built in the past, you won’t like the site they build for you either.

Full-time employees: employees are dedicated, formal members of your team and usually work on a longer-term basis than contractors.

• Pros: the greatest benefit of hiring a programmer as a full-time employee is an alignment of interests. Full-time employees have a vested interest in your company, both in terms of the time they devote and the quality of their work because they share in the success and failure of the company. In my experience, employees do a far greater job than independent contractors and are much more likely to go the extra mile when doing both what is asked of them and also when coming up with new ideas and features on their own – this is the innovation factor. Shared interest is especially strong if your employee has real ownership in your company (equity, options, etc.). As a general rule, the younger your company is the more equity you should expect to award, which is true because anyone joining your team in its early stages is taking a major career risk by coming on board and must be compensated for that risk. In that same vein, the more equity you award the less cash you can likely expect to pay, implying that if the equity is great enough you can save a lot of cash on this option relative to what you’d pay a contractor or development company. In some cases, this can be a cash-free option even. Assuming you are compensating with both, however, I’d expect to pay an annual salary of $60 - $150K (and in several cases more), plus equity of between 2% - 30%. It’s all negotiable, and your final terms will depend on how talented the person is, how much you need him and what your budget is among many other variables. On a side note, having a dedicated tech team, even one person, actually helps your marketability to VCs and angels as well as ensures your business stays lean in its ability to constantly iterate the technology – this is the name of the game in startups.
•  Cons: hiring a full-time programmer is probably the most difficult option of the three because of the lengthy diligence required to identify and then sell the best candidate on the job, and then because of the enormous risk you are taking by placing so much faith in any given hire. In a startup, every single person on your team is a critical component, and making the wrong hire can literally sink your ship, especially when that person is building your product. In terms of compensation, if you’re paying a salary this option will lock you into a long term cash outflow and as mentioned will also usually cost you some equity. Additionally, with full-time employees, you as the business owner must consider all the legal implications such as worker’s compensation, tax liabilities, unemployment insurance benefits and others. Similar to hiring individual contractors, employees must be led, so you’ll have to devote a substantial amount of time to either hire someone who understands both the minute details and the big picture, or you’ll have to play an active role in technology decisions.
• Recommendation: If you’re looking to build a complete product and you need dedicated, long-term support then hire a full-time programmer as an employee. Because this is a long-term decision, you must identify someone that can take full leadership over the technology aspect of the business and whose competency you absolutely trust. This person will likely be your lead programmer or CTO if you have no one else. Finding truly great talent is difficult enough, but to retain it you have to compensate for it. If you don’t want to give up equity, then expect to award a competitive, if not higher-than-average, salary. If you have no cash or are trying to save it then expect to award a big chunk of equity – it’s a tradeoff, but it’s worth it. Remember, the benefit of hiring employees is an alignment of interests, and if you want someone to go above and beyond and work those 18-hour days alongside you, you’ve got to pay for it. In my opinion, award the equity and be generous with key employees (which is absolutely not to say be careless). Make the employee vest over time, meaning the equity is only awarded upon completion of various milestones. If you’re absolutely opposed to allocating equity – and I know some who are – consider it this way: in the beginning one of the biggest challenges you’ll face is that of raising enough funding to build your product; raising funds usually implies you’ll have to give up equity to an investor anyway, who’ll then give you cash, which in turn you’ll pay to a programmer. What I’m trying to say is if you award the equity directly to the employee, you either don’t have to raise as much investor cash to begin with, or you can build a product first and then raise cash on better equity terms later on in the game.

Which programming language is best?

This is a common question you’ll face when you start interviewing people because many of them will be proficient in different programming languages. I’ll refrain from listing all the different languages and their merits because as a non-technical person you won’t necessarily understand all the differences and nuances enough to really decide on your own anyway. I didn’t when I began. Instead, I’ll point out a couple considerations that should help you make an educated business decision, which you can do.

• Consider competency: strongly consider building your site in the language that your best candidate wishes to use.
• Consider flexibility: go with a language that is well known, widely used and which has a large developer community so that you can plug and play talent if you need to. You wouldn’t, for instance, hire the only person in the world that knows language X, only to then become dependent on that one person anytime you need something fixed or built. Using a well-known language will allow you to more readily find people down the road when you need them and at lower rates. Ruby on Rails and PHP are good examples of these kinds of languages.

Where should you begin your search?

• QualityWebHosting.in/: great especially for finding “cheap” overseas talent; free to list (remember, you get what you pay for).
• https://www.facebook.com/QualityWebHosting.in/: great exposure for your listing; expensive listing fees.
• Recruitment agency: usually expensive, but there are some good ones like Mana staff.
• Social media: use your personal network (LinkedIn, Facebook, Twitter), you might be surprised.

General words of wisdom

When dealing with programmers, you’ll get a lot of answers in the conditional – the sky is never blue, the grass is never green – because engineers tend to frame their problems in the ethereal and theoretical. If you wake up in a cold sweat because you’re dreaming of strangling a programmer (actual story told to me by a non-techie entrepreneur-friend), don’t be surprised. The key is to understand from the get-go that you are not building a tangible product like a house, and therefore there is rarely one straightforward solution to any given problem. With software and web engineering, there are multiple different solutions to any given problem and several variables and constraints to account for (architecture, scalability, quality, speed, etc). You as the business person need to be the bridge between the theoretical and practical sides of the business. Be as detailed as possible. Over-communicate. Constantly align on expectations. And behind the scenes, allocate at least twice the capital and time for any quote ever given to you. Go for fixed contracts. And lastly, balance treating your people with respect with being firm on expectations. In other words, try to make it a relationship where you both benefit.

Have friends or relatives started their own businesses or who are looking to get a programming job at a startup? Share this with them!

If you are looking for a freelance web developer, freelance RPA developer and freelance web designer based in Mumbai, Navi Mumbai and all across India, please contact me directly for below listed services:

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