Should I contract a programmer or offer a stake in the company?

in Forum: Building a Website that Works
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Jun. 24 2008 at 3:11 PM
vwebworld Posted by: vwebworld
I'm not a big fan of elance and the like... in that there are a lot of unbelievable low prices.
So, if you go that route, you need to be able to check out the person/firm... their work and especially references.  Obviously, a contract would be important too (specifying the deliverables and penalties for not delivering.
 
You can go to any number of forums and post work too... like on webproworld(dot)com
 
~Roland
Web Design | Golf videos | ecommerce articles | Golf Lessons
Jun. 24 2008 at 3:13 PM
jccameron Posted by: jccameron
Eric,

I cannot really answer that question as I don't and cannot fully appreciate your situation.  However, the common approaches would be a cash advance on credit card, loans from friends and family, loan from a local bank, an SBA loan if you have halfway decent credit.  Heck, even a prosper.com loan would be possible depending upon the amount. It comes down to risk management.  If you fully believe in the idea, how much money are you willing to risk.  If you don't fully believe in it, is it really fair to ask friends and family to share in that risk?  When I do friends and family, it is always as a loan and not as an investment unless they are an accredited investor because the fallout is too great and not worth it otherwise.

As for finding good firms, again, I don't have enough data.  Elance can be very effective and it can be a waste of time...sometimes, even if you work with the same company because most of those low-cost offshore companies have huge turnover and you don't know what you are going to get.  This is especially true for smaller projects (as it sounds like yours is). 

For most programming efforts, you can find individual developers in the US at $40-100 an hour and professional firms with rates from $75-$150 an hour.  Oversees, the final rate is likely to be somewhere between $20-60 an hour but generally has a significantly higher risk associated with it (communication, language, time differential, etc). 

So, if your work requires say 200 hours, that would be US costs of $8-$30K depending upon how lucky you are in finding the right person versus overseas costs of $4-$12K.   So, it comes down to risk management again and financial resources.  Whenever possible I use local resources because the risk is significantly decreased.  Local projects fail for less than 20% of the time for me (perhaps even less than 10%) while oveseas projects are roughly in the 50-60% failure range (this is based upon personal experience not industry numbers). 

Good luck with your effort.

-jc

---
JC Cameron, President
VendorCity, Inc. - Your source for highly recommended Vendors

http://www.VendorCity.com

JC's View: My take on technology and entrepreneurship

Jun. 24 2008 at 9:07 PM
profitizer Posted by: profitizer
Hi esilva.
 
In my opinion, before you are spending too much time on where the money to fund your project comes from, be sure you have the following done first...
 
Possibly step back a bit and forget the computer part for a moment.
 
Who and what is your competition doing?  What makes what you're going to do different and more marketable?  Do you have a flowchart in a enough detail for each of your entire business' processes?  Have you created an organizational chart and management team and staffing needs including job descriptions, skills, formal training, experience, hours, equipment and other resources and space, etc. required to support each business function and therefore, for that business venture as a whole?   What company and management practices and policies are required?  Are they clearly defined 'on paper' so folks know what's expected? 
 
Are there government regulatory issues involved - OSHA, EPA (e.g. emissions, waste management, storm sewers), et al?  How about ISO?  If so, [quadruple ] your funding requirements.  If you have money to fund your business but without this consideration, stop now until you know how to procure that funding once those costs (initial and future) are identified.  I haven't mentioned procuring office and/or warehouse space, equipment, computers, paper, pencils, copiers, fax machines, telephones, cellphones, laptops; travel allowances, other professional services, annual license renewals, employee training, fuel-related costs, etc.
 
Even though those folks on that organization chart may not have names or faces, you can still go to e.g. a salary and benefits estimation website(s) to begin determining what to expect to pay to procure those people [long-term].
 
To assist in this, you could use project management software and features including resource planning after creating say, a 'work breakdown structure,' Gantt chart, etc. to help you to define critical paths, timetables, costs, and more for the individual processes.  There is much more to this, but I'm using this to make a point.  Then reevaluate your budget (this is an on-going function).  You would then be in a better position to possibly reduce your costs by say, lengthening  your timetable or revise your implementation phases, collaborate with other companies to share costs and resources, outsource, find volunteers or hire college students who sometimes will work for food and weekend spending money for, well you know... oops - I meant  (music) and textbooks.
 
And another thing...:  Did you in that design, determine what data needs to be gathered?  Would it need to be shared amongst multiple software applications and multiple workstations (personnel)?   Does some of that data need to be available 24/7 whether or not you are at the office?   If the answer is yes, then that poses several other issues.  At that absolute least, the software must be able to communicate with each other as needed in a smoothe manner.  The operative phrase here is 'in a smoothe manner.'  Do you know how to figure this out yourself in an effective manner?  If not, how do you find out how or who can do it?  Could the programmer do it?  Let me say, maybe, maybe not since it also requires knowing about business functions including logistics and integrating the two and maybe then some.
 
This information is needed first before being able to translate portions into hardware and software requirements, both from a desktop and website perspective.
 
For a website, you have graphic needs, programming and webmaster needs in addition to support needs.  Just because someone knows various scripting languages such as Perl or PHP, and knows how to set up online database software with customizations of various applications doesn't make them a webmaster.  Therefore, you must at least know what the difference is or what separates them.  Just because a programmer is good at programming doesn't mean they know how or what is needed to translate the business end of things including real world logistics into into software functionality be it on the Web or not.
 
 
Until you have this business fully 'designed,' how do you know what functions you need the computer and software to perform?   What do you tell the programmer about his or her time investment requirement to get this business off the ground and running enough for them to reap a benefit - any benefit?
 
 
And I'm really just getting started so I'll stop here for now.
 
The bottom line is, there have been some really great-looking business plans created and still those businesses failed.  It's not because of the economy, the President, etc.; it was because they got caught off guard in their staffing and therefore funding as well as business requirements and needs.  They say that "they didn't know that..."  Well here is a lot of what was absent from their plan.  Try not to go down that road.
 
If done right, it's probably going to cost you way more than you originally thought.  If you try to skip those steps mentioned above, then ...oh well.  I hope you do already have it covered, for longevity's sake.  You need an adequate budget just for the planning or design phase.  This is where you should spend a lot of your time before moving forward.  Most will still try to skip it anyway, regardless.
 
I know this is what I look for in plan, else, there's absolutely no way I'd fund or spend my time on even when I like the concept.
 
And I want you to know, esilva, I am not writing this for you specifically since I don't know about your project nor where you are in its creation; this is meant for anyone who is thinking about starting a business.
 
 
HTH
 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
To see more of my perspective on business creation and longevity planning, check out the following:
 
and follow the links.  There's a lot of good information there.
Also, check out this thread I posted replies on.
 
And...REMEMBER, I am the 'real' Profitizer.
 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


Edited by: profitizer - Jun. 24 2008 at 9:23 PM
View my Profitizer profile.

IBNETLLC.com & BestWebEstate.com
Jun. 25 2008 at 8:09 PM
No Photo Posted by: svelt
Do both. Hire someone then see how it goes. If it is not to your liking can them. If this is supersensitive stuff, pace yourself..if a partner is what you want go with your gut...in todays economy this is key. Find someone who is able to micromanage and give compliment your contributions.  NYT, Bloomberg,etc offer worldwide advertising as well to seek.. If what you need now is to stand back and get away from it, then do so but for a limited time and then make your assesment, knowing  full well that you did your best.If a partner goes bad there are plenty of resources legally.
Jul. 08 2008 at 2:04 PM
No Photo Posted by: gavrilov
esilva wrote: Does anyone recommend any outsourcing sites for this kind of work (programmer/developer)? Other than the obvious elance, guru etc....


The freelance sites aren't a good choice. There is a lot of competition between developers and large companies doing their pressure. High-quality developers who could found work from another sources are rarely seen there. You may try searching developer communities, it should provide better results.

Also try searching for portfolio sites. Most search results will come from companies, but if filtered properly, you may found the people.

Another good source is online trainings in the area - both trainers and students are usually have some qualification and you may see the student's work to estimate them.

P.S. I'm doing team building with offshore outsourcing, but only as paid service, so no list of contacts, sorry.
Jul. 22 2008 at 1:37 PM
No Photo Posted by: JGarrido
I am a programmer and would be interested in hearing more about the type of application you have in-mind. I have some time that I would be able to devote to the right startup, and you'd be surprised how many applications can use off-the-shelf, freely available components that can be stitched together to serve your purpose; so your application may not be as expensive/time-consuming as you're estimating. Either way, you'll probably want to at least consult with a few programmer to get estimates. If you're still looking for someone, I'd love to hear your pitch.
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