Hiring a Development Firm Demystified: The Non-Tech Founder's Handbook
(Original post can be found on Linkedin, published January 23, 2024.)
You’ve got this groundbreaking idea for a tech startup, and you're in the early stages. Maybe you already have a savvy product manager guiding you, or perhaps that's you—someone who knows the ins and outs of launching a successful product and achieving product-market fit. You’ve done some initial work, talking to customers and analyzing the competition to ensure your problem hypothesis is solid. Now comes the exciting part—testing your solution with real-world experiments. For this discussion, we’re talking about a functional prototype, whether it’s a POC (proof-of-concept) or MVP. These experiments will help answer key questions like: What sets your solution apart from existing ones? How well does it resonate with what your users truly want or need?
This scenario is inspired by a recent experience I had with a client who was a non-tech founder creating the first product version on a tight budget. In this article, I'll explain how to find and hire a development firm to kick off an experiment/POC. We'll skip the reasons for choosing a dev firm over contractors or the specifics of building the experiment itself. So, let’s dive into making your tech startup a reality!
1. Engage a CTO Advisor
First things first—if you're a non-tech founder, find yourself a CTO advisor. You need someone with a deep understanding of technical jargon who can explain it in a way that’s easy for you to understand. Look for someone with a proven track record of building and launching products successfully. You want a tech expert with experience in front-end, back-end, data analysis, and quality assurance testing—the complete tech toolkit. This person should guide you through the entire development process and provide sound advice on which technologies to use, help define the technical infrastructure, and oversee the technical team.
Your advisor can be a paid consultant or an equity-based advisor. The most important thing is that they are available to support you throughout the development process.
2. Define Your Budget
Now that you’ve teamed up with a product manager and a CTO advisor, it’s time to dive into the details and pin down the budget for the initial round of product development. With these pros by your side, you’ll gain a solid understanding of the costs and timeline involved in bringing your experiment to life.
Defining your budget early on is crucial. Surprisingly, about 30% of startups fail because they run out of cash. And let's face it, when it comes to development costs, it’s like that home renovation project—the expenses tend to creep up on you.
Here’s the plan: Task your team with outlining a comprehensive cost analysis. Cover all the bases—professionals required, tool expenses, servers, hosts, third-party integrations, and post-launch maintenance costs. Once everyone’s on board with those figures, add an extra 10-15% for those unexpected twists that often come up in the world of software development.
A key lesson learned from working closely with engineers: Nothing is set in stone until they start coding—that’s when they uncover the real challenges, and unexpected costs are bound to happen.
3. Develop an RFP
An RFP, or Request for Proposal, is a crucial document that outlines your project’s requirements, goals, and expectations. It typically includes background information, a project overview, desired features, timelines, budget constraints, evaluation criteria, and other pertinent details.
Its primary purpose is to invite development firms to submit proposals outlining how they would approach and meet your project needs. This process allows you to compare proposals from different firms, enabling an informed decision based on their responses.
When initiating contact with a development firm, consider sending a preliminary RFP—a concise 2-page document summarizing the project overview, startup mission, scope of work, deliverables, timeline, and qualifications. After the initial meeting, once the firm is comfortable with the shared information, it’s advisable to share a more comprehensive RFP. This detailed document can include the feature list and any sketches you may have, providing a more in-depth understanding of your project.
4. Share the Budget Upfront
Timing is essential when it comes to sharing your budget with a vendor. It’s best to share your budget during the first meeting after you have laid out your project vision and mission and allowed the vendor to share their knowledge and experience. This way, everyone is on the same page, and you can get a clearer picture of what the vendor can offer within your budget.
If you have a small budget, don’t be afraid to ask the vendor upfront if they have a minimum budget requirement before setting up the initial meeting. Some firms may be flexible, even if your budget is on the smaller side, especially if they are excited about your project.
5. Assess Proposals
This step requires time and attention. Dive into discussions about each proposal with your advisory team. Circle back to the development firm and ask follow-up questions—as many as needed to ensure complete clarity in the proposal.
In my experiences, I’ve seen vendors doubling the price in response to follow-up questions and refined project details, while others maintained a consistent price throughout. Go through as many meetings as needed to clarify the proposal and later the contract.
Every firm operates differently, each with its unique processes and strengths. Set clear expectations upfront to avoid what’s commonly termed “scope creep.” Ask crucial questions like:
Will you have direct interaction with designers, engineers, and QA testers?
What happens if small changes are requested during the process?
Can you access the daily project management tools to stay in the loop?
6. Sign the Contract
It’s time to seal the deal and get the project rolling. Just be sure to sign the contract before diving into the kick-off meeting. It might sound obvious, but in the midst of all the excitement, crucial details like signing the contract agreement can easily slip through the cracks.
Conclusion
By following these tips, you'll increase your chances of success and ace that experiment project launch.
Launching a tech startup involves making strategic decisions and well-informed choices as you navigate the intricate path. With plenty of resources offering advice on avoiding pitfalls during this journey, this article zooms in on a vital aspect: how to find and hire a development firm for non-tech founders.
Here are the key takeaways:
Get a CTO advisor on board for essential technical insights.
Set a budget in collaboration with a product management lead and engineer lead/CTO.
Draft a comprehensive RFP to invite and assess development proposals.
Be transparent by sharing the budget early in the process.
Evaluate proposals collectively.
Sign the contract before the kick-off meeting.
These steps are indispensable for non-tech founders, empowering them to confidently embark on their development journey while ensuring alignment with their vision and mission.
If you have any questions or want to discuss reaching product-market fit, building exceptional product teams, and creating outstanding products, I’d love to hear from you. Feel free to get in touch!