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When to hire "A" Player Employees and when to hire "B" Player Contractors?

My first startup is starting to get some legs and I'm at the point where I need more development resources to meet our goals and deadlines.


I'm wondering if there are known key indicators, based on product type, startup stage (pre-rev, growth, etc), that sway one's decision to recruit and hire "A" Players as opposed to "B" Players as contractors?


For my situation, we have 95% the features we need in our API built for launch, 30% of what we need in iOS, and 0% of what we need for Android (though Android is not a "must" for launch). I will be able to complete the iOS side of things, but could use help to make sure the API is ready for launch (if Android can be available, a huge plus, but not a must). Our startup is pre-revenue and will start off with testing an advertising and Kiip reward monetization strat (read: no profits for a while). We are using Mike Moyer's Slicing Pie Grunt Fund for compensation at the moment.


Are other factors you would consider when making this decision?

8 Replies

Aleksandra Czajka
4
0
Aleksandra Czajka Entrepreneur
Freelance Senior Software Engineer, Developer, Web Developer, Programmer - Full Stack
First, why are you assuming that contractors are "B" players? I'm an "A" player, but, prefer contract to salary as I like being compensated for all the hours I work. I also like the flexibility, choosing each project I work on and working on lots of different things. There's nothing "B" about that.


Or, are you saying that they would untimately be "B" players to you as they would not add to the strategy of the business by being contractors?
Brahm Kiran Singh
3
0
Brahm Kiran Singh Entrepreneur • Advisor
Eng Head - Deep Search at Quixey
Think of contractor as someone hired for a project or milestone. An employee is someone you keep for longer.


If you have a product that has been validated in the market, get employees. If you want to test out different products and market validation is not done yet, contractors are a good way to go.


One more thing to keep in mind is that if you hire an employee when you don't have much funds and the product is not validated, he/she is more likely to quit than a contractor who is anyways only hired for a project. So in early stages, contractors or even interns make more sense.

Once you get your product validated, you can always try to convert the contractors/interns to full time employees
Michael Calleia
5
0
Michael Calleia Entrepreneur • Advisor
Product/Experience Design/Strategy Leader. Founder, Humanist partnering with clients to build great products and brands
Simple. Never hire B Players for full-time or contact.

If you're code base is a mess because you hired B players first, you may have trouble getting an Player A to want to deal with it.

Short version: The tech debt from a B team can be crushing.
Brahm Kiran Singh
0
0
Brahm Kiran Singh Entrepreneur • Advisor
Eng Head - Deep Search at Quixey
I feel there is a discrepancy between the definitions if A and B players. Michael is right in that you should never get a B team. But Aleksandra's distinction names more sense here - A vs B is used just to distinguish between contractors and employees. Not the skill quality. Graeham?
Michael Calleia
0
0
Michael Calleia Entrepreneur • Advisor
Product/Experience Design/Strategy Leader. Founder, Humanist partnering with clients to build great products and brands
100% with Brahm.

If we are talking contractors vs full-timers. Don't scale until:
1. You have proven your hypothesis enough to have confidence (growth, revenue, proved out enough to get funding)
2. You have runway to support these people for a reasonable amount of time
Graeham Ford-Feliz
0
0
Graeham Ford-Feliz Entrepreneur
CEO at Emergent Coast
@Aleks - I suppose I could make this more clear: "when should one hire A Players as employees or B Players as contractors?" I meant no judgement on contractors being A or B players. I know one should never hire "B" players as employees, but some justify outsourcing or hiring contractors to just "get a small job done," and emphasis that hiring a full-time "A" player employee is not necessary to meet business goals.

@Brahm - thanks for the guidelines.

@Michael - Thanks. What is the exception to the rule of your "Short version"? Knowing both the rule and the exception will help me make intelligent decisions regarding this going forward as it applies to my varying situations. Thanks, again.
Graeham Ford-Feliz
0
0
Graeham Ford-Feliz Entrepreneur
CEO at Emergent Coast
Great clarifying questions.

As I read and write on this topic, I'm realizing that one of my major apprehensions is that there is no "real money" to pay an "A" player as an employee, only a Grunt Fund "promise" - with little analysis, perhaps I'm feeling a fear of turning away "A" players in my personal network before I'm fully confident in short-term capital (funding/revenue), from which I can adequately compensate them.

To rephrase my question better:
Q: "What key indicators sway an early-stage entrepreneur to hire a "B" player, with short-term contract, as the exception to the rule of always hiring "A" players?
Tom Austin
2
0
Tom Austin Advisor
Managing Partner
Hire B players if they are 'good enough' to do the work, it won't be seen by major clients and it's not 'critical' to the success or failure of the venture. But ...if that's the case why are you even doing the work?

So...be careful...many functions in a start-up are mission critical (i.e. customer service, sales, design, marketing, etc). Err on over-hiring to start. The compounding of many, critical choices on multiple fronts will make the difference.


Never hire b-players for A-jobs. Having said that...most start-ups don't need custom gold-plated, hand designed bathroom knobs. Not all jobs are A jobs. Hire people to slightly exceed the skill requirement and critical importance of the work. Get the best people you can find at each level...within the time and budget you have...but you may only need/want B players for C level jobs.


For example, a premium, fashion brand may need an A logo. A discount based web retailer selling primarily over cell phones...may only need a C logo. And most start-ups are really cash strapped, so equity is part of the deal in getting most A-talent when you are pre-revenue.


So...clearly, there are dividing lines...and we have to get what is 'essential' to our core business and what is 'experimentation, luxury and/or nice to have':


Some questions I might ask myself:



1. Is this person VITAL to increasing the success of the business? Either to boosting the near-term size and/or growth exponentially or decreasing likelihood of failure dramatically. If so...consider equity. But also ask...is this person's skill set non-correlated with the existing team. If not...be careful.
2. Is this project / function core to testing the basic 'engine' and revenue driver of the business? Then...in general, we probably have to get this project to (at least) 80% right (in a business to consumer model)...to be able to begin A/B and focus group testing. If so...go A. Either as contractor or in-house.
3. Is this work going to be seen by a major account and/or am I selling B2B..where anything sloppy could set us back years...or kill us entirely...or can we, instead, control who will see this (with very limited tests on 'less important' clients...or small subset initially)...so even if it's a mess, we haven't done that much damage? So...never hire b players on presentation materials to major accounts. Better not to show anything than to show b work here.
4. How long and expensive will the 'b' player be? In general - the less money and time you have, the more important A players. If you are not sure what you are doing...it's fine to make them contractors. In fact, it's probably wise. But...I'd always try to get 1-2 core partners on board...and make them as A +++ as possible...early on.
5. Is this a 'fixed' need or a 'variable' need. Do I have a solid sense that this area will grow. If you are getting revenues from your core business...but want to test a pivot...and your core guys are committed...do this through a contractor. If you have proven the core revenue model and don't have the man-hours covered to fill your short-term needs, hire an A player - either as a contractor or employee. Contractor would be preferred to start. On every hire...apart from a core 'partner.'


Good luck.
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