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Thoughts on founder team with no CTO?

As everyone knows, the ratio of founders with marketing/business experience to technical founders is quite lopsided.

What are your thoughts on a founder team for a SaaS of 2 people, one product concept/marketing, the other sales/operations?

Neither are coders and would have to rely on offshore developers.

I've used offshore developers for the past 8 years, some truly horrible and some quite good.

My question is, can a SaaS start up successfully with no technical cofounder, relying purely on providing product specs to an offshore development team?

Success stories would be appreciated.

39 Replies

Bob Graham
11
0
Bob Graham Entrepreneur
Engineering and Software
A CTO is more than a CTO. They are your partner. If you are lucky enough to know someone who is business partner material and who is great technically, then I'd work with them without hesitation.

I would also look at the business model and MVP needed. Can you get to customers by hiring an outsourcer to do some simple tasks?

For outsourcers you need to:
-Draw everything
-Make everything as detailed as possible
-Simplify everything as much as possible

You can also hire someone local or a more expensive outsourcer to check over the outsourcers' code.

But really, I think after MVP, you are going to need someone technically skilled and committed to the project to succeed. For that I think you can pay someone way above the average, plus equity to do it. Do you think you can get to that point with an MVP you can get outsourced? If so then go for it.

I think it's never wise to pick up a bad partner, so more than anything, I'd suggest for you to think of any potential CTO as a partner first, and as the guy coding second.

If you have someone who is partner material then there is no question. Work with them. That's what I have and I am extremely lucky, but we make all decisions together and I am not the boss. We are partners in every sense of the word.

If you can't find that, then you can't risk someone bad. It could derail everything. In my opinion, it would be better to get an MVP, some customers and then pay for a CTO.


Ashish Bhasin
0
1
Ashish Bhasin Entrepreneur
Client Executive (Director Sales and Business Development) at Aricent
Edward, Most of the outsourcing project fails because of the approach you have mentioned. It is required to have strong Sales team, however you need to understand technical specs which put across are replicated as in the delivery. We can discuss on this topic at length, you can contact me ashbhasin at gmail.com Regards, Ashish
Paul Chambers
7
0
Paul Chambers Advisor
Founder, Nymble Technology
The only useful perspective I can offer is an observed experience where non-technical founders were taken advantage of by the external technical resources they engaged with. Theyincrementallypaid wayover the final value of the work product, over more than two years.

After several missed deadlines, still no stable software in sight nor credible explanation as to when, they finally sacked them. Only then did the true depth of the intentional deception come to light. The work wasn't salvageable, it had to be discarded.

So that's the nub of the issue - if you have no way to verify the competence of the engineering team or thequality of work, how do you know if you will get what you paid for, when promised, at a fair price?

They only way I know of, is to engage with someone independent who you trust to oversee those external resources. Misplaced trust in external resources kills companies.

To be candid, it doesn't matter how detailed and specific a specification is written, there will be questions of technical approach and trade-offs that it cannot anticipate nor answer. You need at least one technical resource you can count on to handle that iteration that's inevitable when product specification encounters the harsh realities of product development.

In my opinion, it's incredibly risky to take on product development without at least one trustworthy, competent technical champion to protect your interests.
Edward M. Yang
0
0
Edward M. Yang Entrepreneur
Managing Partner at Firecracker PR
Paul,

Very good point. I forgot to mention one important variable. I have a friend who is a coder that doesn't have time to participate, but is acting as my sounding board. I run the developers' specs and code by him, and he helps verify, question and check their estimates. So in that sense I'm fortunate.
Umesh Sethi
0
1
Umesh Sethi Entrepreneur
CEO at Profocus Software Solutions - customized software products - fortune 1000 clients
Hi, As an outsourcing provider myself, my view may well be the other side of the coin - but i think a counter view might help. We've found that in certain situations outsourcing for startups can work well - have seen 3 successful cases. The common aspect in these 3 cases was the engagement model. It was a mini Offshore Dev Center setup which meant a mini team of 3-5 people one of which would be the project management cum business analyst role and the other in development, design etc. The PM - BA role helped in requirement gathering and its conversion to algorithms and High Level Design and more process ownership than comes with a Time and material or dedicated resources model. Secondly the development methodology was agile with 2-3 week sprints of feature release. Deployment was obviously on cloud. But in the long run i think there should be Build operate transfer clauses in agreement which give the startup an option to complete transfer an ownership of a core development team over a couple of years or so. This can be made to be a win win for both the vendor and the startup.
Assaf Karmon
5
0
Assaf Karmon Entrepreneur • Advisor
Vice President of Engineering at GoShare
What's your idea ? Maybe I'll be your CTO.
Bob Graham
2
0
Bob Graham Entrepreneur
Engineering and Software
Edward I also should add we have 4 devs on our team. We have myself, our CTO, another local dev who we sit and code with and one dev overseas.

The overseas dev we have a relationship with and he's a nice guy and quite skilled, but we are constantly having to fix up little errors and he just tends to be a bit on the sloppy side. Not sure why, but just simple things that would be easy and obvious to us to fix in the code he leaves or does incorrectly. He also isn't that cheap compared to the local.

We pay our local JR dev $30 an hour and our overseas one $22. We are saving $8, but there are grants for the local guy and incentives and we can eventually give him equity and bring him on if he is good.
Also when I say JR I mean he could build a lot of what we have if we needed, it would just take him a bit longer.

So far I lean toward local if you do get it done.
Something to consider. Having said that we are still using the overseas dev for some tasks too, but I can't really imagine him being our main dude.
Israel Ben-Ishai
4
0
Israel Ben-Ishai Entrepreneur
President at Achive3000 Canada
Dear Edward, I would be happy to discuss this issue with you in private and see how and if I can help you. You absolutely must have somebody on your side. Also, as an Angel investor I wouldn't invest in you unless you have some experienced engineering manager as part of your team. I am heading out of town now but would be happy to chat next week. Will share my "wisdom" with you for free. All the best, Israel
David Albert
2
0
David Albert Entrepreneur • Advisor
Founder & Principal at GreyGoo
I believe it depends a lot on the idea and the level of technical execution involved. If you have the funds, contracting a qualified technical strategist is invaluable to help you get to a MVP. Perhaps a cash + small equity stake arrangement. If you go this route, you should vet them--make sure they have a proven track record of taking a product from concept to launch and can point to or share real-world success stories. If you plan to offshore, that person should also have worked with offshore development teams--offshore CAN be successful but it's a completely different beast then working with in-house devs.

I have worked with at least 4 startups now where the founders lacked technical expertise and decided to offshore 100% of their product development and it resulted in a complete mess. Not because the developers they contracted were bad--but because there was no technical leadership or project management. The founders knew what they wanted, but didn't know how to properly articulate it. They lacked UX/UI experience, and the baseline understanding of the development process to manage the project effectively. Offshore developers do what they're told: if you give them detailed instructions, visuals, examples, and maintain a constant level of good communication, you can expect good results. Far too often it's the opposite.

In those 4 scenarios: we advised 3 to completely scrap the code and rebuild from scratch. On the 4th, we decided to build on what they had and ended up regretting it--the process to bandaid and build upon what was created ended up taking 2X as long.
2
0
X
Entrepreneur
I would warn against starting a technology company without a technology co-founder. You can outsource IT work if that work can be eventually thrown away and redone without significant impact, e.g. you're a life sciences company and need a marketing/branding website. But if this is your core technology, you're running a double risk: 1) you've hired consultants whom you can't manage - prob. they will take advantage of that, and 2) even if this does work out, investors will be very unhappy that you don't own your IP.
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