How To Build Your Technology Team
This is part of a series of posts aimed at providing value and support to early-stage founders to help them succeed and grow their company using principles learned from our experience as operators and founders. Our aim is to provide and make such information free and widely available to everyone. If you have any topics that we would like to better explain or write about, please reach out to hello@metagrove.vc
So you’ve just started building your company, and it’s a really exciting time for you and your co-founders (if any)!
You probably have the following elements ready to go:
Catchy name
Cool looking logo
Basic product roadmap
Market research
Social media profiles i.e. IG, Facebook, Twitter, LinkedIn, etc.
Website/blog
It’s now time to start thinking about building the actual product itself.
If you’re a company that is technology-enabled, as founders you’ll probably be asking questions about “who should be building the MVP?”, “do we outsource this or do we it build it in-house?”, “do we need a CTO and who will it be?”, “how do we scale the tech team?”, “what happens post-MVP?”, and many others. There’s no doubt that these questions will creep into your purview as a founder when you start to think about technology development and how it will play a role in contributing to the product.
If technology plays a significant part in moving the needle for your company, then founders should be considering what their technology roadmap and what such a team will look like for the company’s trajectory over the lifecycle of your business. The earlier you can start thinking about this, the better you’ll be prepared to adapt to the changing conditions and needs of the business.
This article will explain how to best go about building your technology team to make sure you’re on the right path towards building a product and/or service that works, but also how to scale your team when the time is right.
If the above sounds like you and where you’re at right now — read on!
The Founders
We all know that being a founder is already hard. It becomes even more challenging when founders take on multiple roles at the earliest stages of growth. It’s not unusual for them to be wearing different hats with a combination of CEO, COO, CTO, CPO, growth, marketing, etc. Obviously the more founders available, the more efficient you can be in distributing the workload.
However, as founders, it’s important to understand that if technology plays a significant role in your product and/or service that will amount to any traction on your fundraising, getting first customers, and developing key partnerships, then it needs to be put front and center of the company.
It’s now time for the leadership team (the founders for now) need to figure out who will occupy the role of being the technology leader.
But how do you begin choosing the right person for this role and how will this role change as the business grows?
MVP
A Minimum Viable Product or better known as an MVP is the state of a product or service that will allow you to showcase its most important features just enough that you can start evaluating and gauging feedback from customers to continue iterating for future product development. It’s also a good stage when you can begin fundraising with investors.
So who’s going to be developing the MVP?
If you have multiple co-founders, and one of them has a strong technology background in product development, then it would most make sense to place them as someone who can lead the tech team. However, this may not always be the case, which means you will have to find someone to lead the tech side.
There any a few scenarios that can be played out here, but three main ones could include;
One or more of the founders develop the MVP together given their technology backgrounds
One founder develops the MVP themselves
The founder(s) don’t have a technology background, which means they could either;
Partner with another tech-focused co-founder
Hire an in-house employee
Outsource the work to a third-party i.e. dev shop, freelancers, etc.
If you haven’t noticed, I haven’t thrown any titles around during this phase of growth.
At this point in the business, all the company has to grow is its founders. Titles are irrelevant. This may sound contentious, but this is really a time for the founding members to work together and build something of value, and forget about who occupies what role.
Scenarios 1 and 2 above are perhaps the most ideal, however, there are many scenarios 3s out there who need some additional support in figuring out what their tech team will look like.
Let’s now focus on actually developing the product and figure out what options lay ahead for an early-stage company.
Development
When it comes to product development, there are generally three pathways a company can take; develop in-house, going outside, or hybrid.
We’ll take a look at each avenue in detail so founders can make a better decision on what route to take.
In-House
As previously mentioned, this is probably by far the most ideal situation to be in. However, it’s not the most likely scenario for many early-stage companies. Developing your product in-house means that you already have team member(s) who have the skillset and knowledge to start building the product, or at least getting it to an MVP level.
If the founders don’t have the technology skillset, they can also look to hire someone as a lead developer or senior engineer as either a PT or FT employee, for which they can be remunerated with both a mix of salary and equity. Eventually, you can then pave a path for them to move higher into the organization i.e. Head of Engineering, VP of Engineering, Director, or perhaps even CTO.
Outsourcing
Seeking external support is another alternative. For founders who are not tech-savvy, this is likely going to be their only solution.
Outsourcing means working with external third parties to help develop the product/service alongside the company, and it means finding the right people for the job who can deliver and work with the founder(s) towards MVP and product launch.
There are usually two methods to outsourcing; freelancers or going through a development shop.
Freelancers
Freelancers are those who may have previously worked at large companies themselves, honed their craft, and are interested in pursuing more independent work. Some do it on a full-time basis, while others might do it as a side hustle in conjunction with their day-to-day job. Be aware that not all freelancers are created equally. Make sure you ‘shop around’ and look for those with credibility — referrals are always recommended.
Development Shops
Dev shops are contract organizations specifically focused on doing work for their clients/customers (this means you the founders). Again, these can be hit and miss, so do your research. Overall, dev shops are typically more expensive since they have to account for both developer salaries and fixed costs around their operations i.e. office hire, IT, etc. However, the advantage of working with dev shops is that you will be assigned with a dedicated team of developers who are focused on building your product with no other distractions and projects as opposed to working with freelancers. Dev shops are a good option for outsourcing if you have the budget for it.
In general, reaching out externally for support comes with both pros and cons.
Let’s start with the pros:
Takes the load off the founders and core team to focus on other aspects of the business i.e. product, growth, operations, marketing, biz dev, etc.
Knows that product development is in good hands if partnered with the right folks.
Access to top-tier talent who know what they’re doing and have the experience to back it up.
Relatively easy to scale your team — most dev shops have a good amount of engineers that they can easily add and remove depending on your needs
There might be an opportunity to transition some of your top freelancers to FTEs — these folks already know the product and bringing them in-house will be much easier than hiring someone fresh.
But there are a few cons too:
Freelancers and dev shops can be expensive and will soon amount to a large cost the longer you keep them around — be sure to negotiate terms of engagement to keep expenses in line with your budget
Freelancers specifically may be working on multiple projects, so they may not give a 100% to you and the company. Be aware of this and make sure that both sides are transparent about what deliverables are required including time commitments.
Contractors are only incentivized through how much you pay them. Most of them don’t have an equity stake in the company. This means they’re not going to be as motivated as an FTE who has equity to see the company grow and succeed.
Don’t expect proactiveness. Most contractors will only do what you tell them to do. They won’t come up with improvements or innovative solutions. Direction must still come from the client (customer) and it must have a clear roadmap. Ensure consistent communication with your outsourced teams.
Hybrid
Hybrid tech teams are now becoming more popular.
Companies will have an in-house technology team i.e. CTO, Head of Engineering, Director, and maybe a few engineers who are proactively working with an outsourced group of developers, who may either be co-located or working remotely around the world i.e. Europe, India, the US, etc.
As the demand for tech talent continues to grow, but with limited supply to meet it, companies are now being forced to look elsewhere for their engineering resources. Hybrid tech teams are now becoming the norm especially as businesses begin to grow exponentially.
It’s up to the leadership team to figure out what this will look like and make sure there’s a fine balance between what is created internally vs externally, especially when it comes to certain Intellectual Property (IP) and trade secrets if any.
Time to Grow
So you’ve just launched your MVP successfully with the minimal resources you have. Investors are interested and capital is coming in hot and fast into your startup — what’s next?
If you’ve just finished your MVP through outsourcing methods, then it’s time to think hard about who builds it post-MVP.
Be sure to evaluate your outsourced team and figure out if you can keep them on or at least taper it down to a few key personnel while you begin building your in-house tech team.
If you've been building in-house all this time, then you can either continue to hire more internal resources or look towards a more hybrid approach.
Ultimately, in order to set yourself up for long-term growth and success, the product needs to be scalable, and by extension, the product development team as well.
Work with people you trust and who trust in your company and mission, and find the right balance of people, both internally and externally who can help the business achieve its mission.
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Metagrove Ventures is an early-stage investment venture capital fund, focused on supporting founders and companies who are building the future of industry by creating inflection points in the market.
