Alone we can do so little; together we can do so much.
Often, as a startup founder, you tend to micromanage as you often have a hard-time trusting people with your idea.
It’s your baby after all!
But it’s almost impossible to build a successful business alone. Rome wasn’t built in a day, nor was it built alone!
As a Founder, you could be an expert entrepreneur wanting tech specialization or other uncommon skills, or be an expert coder in a constant race against time. In any case, you will have to hire developers as your firm grows and prompts delegation. You can do that either by hiring developers as your employees or by appointing a specialized product development company.
Still, you cannot just hire anyone to handle your baby. After all, the product will be the heart; you cannot go wrong with it.
You must at least remember the following things before you decide who will handle your product development. These will help you decide on the one that’s the most cost-effective with a focus on how you can evaluate their quality and skills.
I. Skills and Methodology
This should be a no-brainer!
“How skilled they are” and “How they work” are unarguably the fundamental questions you need to be able to answer before addressing anything else.
In fact, one could argue that the next two points are simply extensions of these two questions.
But I digress. Usually, the more significant a question is, the more difficult it is to answer. In addition, it can be hard to judge their skills and work method accurately in the first meeting. Still, through my experience and expertise, I suggest looking at the following things when evaluating it.
To assess their skills, try addressing these:
- What are their core competencies?
- What are their best practices for writing code?
- Who is in their project team?
- Who is the team leader?
- How skilled is the team? (Hint: Look at the team’s profiles)
- Speak with the most skilled team member
- Can they solve technical and tricky parts of your App?
- Can they offer any useful advice on relevant areas?
- How do they deal with problems or unforeseen circumstances?
To assess their work style/method, try addressing these:
- How do they define their work culture?
- How do they work around deadlines?
- How do they test the product’s quality?
- How do they control that quality?
- What is their development process?
- How do their teams tend to work? (Multiple Projects at once/ one-at-a-time)
- How do they update their clients?
- How do they communicate the PPP (Plans, Progress, Problems)?
- Do their work with a technical documentation?
- Do they offer a customized service?
You may have realised that not all the above questions can be addressed by looking at the development company alone; you’d often need external inputs from their references or past clients. Hence, you’d find their portfolio and references crucial to addressing them.
Often, their portfolio of past work is a direct and reliable indicator of their skill and their work quality. In addition, it lays out all their previous experiences.
While reviewing it, see if it helps you answer the following:
- Do they have experience in the same or similar field?
- What types of clients have they served in the past? (B2B, B2C, or both)
- How detailed is their portfolio? (Hint: See if it’s only presented in pictures, or it’s accompanied with notes/explanations of what they did!)
- What types of service did they provide in their past projects? (Analysis? Design? Prototyping?)
- Are their past services skewed towards one type?
- Have they worked on multiple projects with the same client?
Just like you wouldn’t employ someone without looking at their references, you wouldn’t hire a development company without referring to their past clients.
Their references often give invaluable insight into their skills, methodology, culture, and other intangible factors.
The references you consult could be their past clients, trusted reviews, authentic testimonials, and other reviews on social media.
When you do consult these references, try to cover the following areas when you can:
- How was their experience with them?
- How do they describe their work ethics?
- Did they deliver in time?
- Did they fulfil personal expectations?
- Did they require any kind of hand-holding or micromanagement?
- How did they communicate?
- Were they transparent in how they worked?
- How Innovative or Creative were they?
- Did they offer any useful advice?
- Did you ever disagree with them?
- How did they handle any conflict?
- Anything memorable that comes to mind?
You must’ve often heard, “Don’t go for the cheapest,” which I mostly agree with; but at the same time, don’t choose the most expensive option blindly!
What you should be trying to do is finding the most cost-effective option. Sometimes, it very well could be the cheapest one!
You may often find when evaluating an option’s cost with its benefits that skills often directly correlated with their price! The most skilled one tends to be the most expensive, and the least skilled the least expensive. Yet, this shouldn’t be your rule of thumb, as you should check their cost against relevant skills.
To sum up, keep the following things in mind when evaluating their costs and benefits:
- Why is their price so low? Is it directly related to their end product’s quality?
- If very high, Why is their price so high?
- What sets them apart from other development houses?
- Do they offer a specialized and customized service tailored precisely to your needs?
- Ask for a custom quote for your respective needs and requirements.
- Do they charge a fixed price? or Are their prices resource based?
- Does their price come with secure and reliable guarantees?
V. To Offshore or not
Another major concern that’s gaining prominence in recent years is the issue of Offshore Outsourcing. With many Asian countries offering high skills with cheap labour, this shouldn’t be a surprise.
Yet, coupled with all the other points listed in this post, offshoring raises some more specific concerns, particularly geographical, cultural, and time differences.
Further, Communication can be quite problematic, even without considering language and cultural differences.
To encourage active and honest Communication, have a communication plan in place. It should at least entail:
- How and When will they demonstrate any progress on the product? (weekly demos, update list, presentations, finishing every sprint with a demo etc.)
- How will they be communicating any PPP (Plans, Progress, and Problems)?
- How do they handle any problems arising? (On their own, or consult you first)
- How and when will they communicate that problem?
To address language and cultural issues, check if you’ve covered the following:
- Are they able to communicate their ideas, design, plans, etc well?
- Can they understand you well?
- Can they understand your idea well enough?
- Do they understand your expectations?
- Do they understand your work culture?
- Do they know what they are responsible and accountable for?
VI. Comfort Level
Great Minds think alike, but the foolish seldom differ.
Sometimes even the best rated companies, with an excellent reputation can be unsuitable for your needs! That happens often due to a huge clash of cultures.
While you shouldn’t stick with a couple of Yes-Men, you must also be wary of those who only and always disagree with you.
Often it’s as simple as not liking each other, so not being able to work together.
Still, culture is something that one cannot know solely through meetings; you have to experience it to know it.
You may consider hiring them on a trial basis (i.e. on a small project before the real deal) to know them and their culture well.
From your first meeting, look out for any signs that address the following:
- What’s their culture like?
- How does it align with yours?
- What are their company values?
- Do they contradict with yours? (Hint: Ask for their opinions to know where they stand)
- Would they require constant supervision in the future?
- How has working with startups been for them?
- Do they stand by their words, even in the initial meetings?
- How transparent do they seem?
- Do they seem reliable and trustworthy?
VII. Security and Reliability
Without sufficient reliability and security, you can’t even think of signing a contract with them!
If you have a unique idea, you don’t wanna disclose it without appropriate confidentiality agreements in place. Most companies prefer to sign an NDA (Non-Disclosure Agreement) before they discuss anything of value.
Further, try to keep the following things in mind when evaluating how secure and reliable they are:
- Are they financially stable and sound?
- (You don’t want to increase your systemic risks by signing a contract with a company who’s likely to go bankrupt in a few months!)
- How clear were their Terms and Conditions?
- (Often, companies put uncomfortable clauses there to gain consent without a discussion. So they can be an indicator of their reliability)
- Are they interested more in money than building trust and relationships?
- Some companies end up abandoning your project if they find a better one
- What kind of after support and care do they offer?
- Will they hold themselves accountable for any failures?
- Who will own the source code?
- Although not a security issue, it raises the issues of transparency and mutual agreements; if this remains hazy, check for other grey areas as well.
- How clear and transparent is the company’s security policy?
- Specifically, the policies and terms concerning sensitive and confidential data
- This is crucial as you will be sharing highly valuable and sensitive information with them.
This list is not all-inclusive. Rather, it includes the essential things you cannot overlook in my opinion.
You must’ve realized that these seven points often overlap one another. You cannot look at them completely in isolation from each other. For instance, when evaluating their skills, you will need to review their references, portfolio, compare with their costs, etc. Hence, you’d find that these go hand-in-hand.
But I did try to categorize them to make your evaluation process simpler! And, I remain confident that broadly, these 7 remain the most important points to successfully guide your selection process.
Still, there might be things I’ve missed, and I’d appreciate nothing more than your honest opinions and revisions (wherever necessary) to my list!
Good Luck Selecting and Developing!
Dhananjay (DJ) Goel is the CTO at Alphalogic, passionate about technology, startups, game of thrones and coffee. He enjoys working on challenging problems with innovative startups.