10 Steps for Startups to Attract and Retain Best Software Developers

An Essential Guide

By: Intersog

www.intersog.com

2013

10 Steps for Startups to Attract and Retain Best Software Developers | www.intersog.com

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Introduction Congrats, your dream has come true – you are now a happy startupper with huge ambitions to grow. You believe you have a good business plan put in place and you know exactly how to sail safely and carelessly in troubled business waters. But if everything were so seamless, why would authoritative sources like Mashablei report a 90% digital startups failure rate? Well, even if these stats are slightly exaggerated, the risk of a startup failure is always high due to:

o Incompetence of founders

46% of startups fail because of emotional pricing, luxury lifestyle, non-payment of taxesii, etc.

o Lack of managerial experience

41% of startups fail because of no planning and reporting skills, inadequate money borrowing practices, poor knowledge of suppliers, and wasted advertising budgetiii

o Inadequate Timing

Steve Hogan, the Silicon Valley fixer-upper, claims that running out of time is one of the major causes of startup failuresiv. Companies that spend 90% of time building their product usually run out of money and, as a result, drop out of the race.

o Inability to attract and retain skilled tech talent

Getting the right software programmers and IT specialists in general can be a crucial fork in the road impeding startups from scaling and maturing.

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Why Do Most Startups Fail to Hire Right People Able To Bring Value?

As a startupper (no matter what your background is), you should be well aware that today’s competition is tough and lingering with product launch to the mass market can kill your company. But you also understand the risks of introducing a buggy and poorly developed software product, don’t you? Therefore, you tend to build a dream team of senior guys to create a truly disruptive and flawless solution. And that is where the main failure factor actually underlies: you hire “rockstar” developers for USD $100K per annum each who require a 4-day working week, conference budgets and paid vacation each three months, and who don’t care about your product vision and will drop you off with no regrets once they receive an offer from Google or Facebook.

But do you know that:

Paying through the nose for tech resources will eventually shrink your development budget and leave you no room for business development and appropriate product marketing?

High employee turnover will result in huge overheads related to staff replacement,

delays in meeting milestones and delivery?

Some experts suggestv that startups stop hunting for “rockstar” programmers and hire junior guys instead. While it may be a good solution for startups with very basic software development needs, it can be a real project killer in case of a complex software solution aimed at different screens and suggesting frequent features and functionality upgrades, and fast response to volatile business and market conditions. Complex software projects require senior skills to make sure end users will get a beta product with minimum errors and inconsistencies. So, having at least business critical tasks assigned to experienced programmers is a must for innovative startups that want to live long.

Even if we assume you have enough assets to afford few really good senior IT guys for your development team, you may, however, face another big issue - not so many senior guys will be eager to join your team! Let’s face reality - senior guys prefer to work for big companies! Period. Although stability, salary and perks that no startup can offer are important factors attracting experienced software engineers in big companies, what they value even more is an ability to work in a big team with other senior guys. It offers good opportunities for ongoing on-job learning, professional networking and knowledge exchange in real time. So, a senior guy can become part of a corporate diaspora and get endless options for self-development

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such as visiting and speaking at local and global IT conferences and seminars, attending workshops with the industry gurus, and many more.

Also, when working in large companies, software developers have time to reflect. Since startups live in a very hectic and fast-paced environment, it may feel your whole lifetime is squeezed in every single day. Since big companies usually move in a slower and more consensual way with no or minimum risk taking, developers are more laid back and less subjected to occupational stress and burnout.

As a startup, you still have some good possibilities to attract senior IT talent while simplifying recruitment process and minimizing turnover risks.

10 Steps for Startups to Attract and Retain Best IT Talent

1.Think globally

Matt Cooper, VP of oDesk, believes many startups can’t get the right tech resources because they have a narrow focus on their native city or Silicon Valley.

Today’s average starting salary for a senior Ruby/Rails developer has climbed up to $107,000 per annum in Silicon Valley. However, there are thousands of talented and well-trained software engineers outside the U.S. or E.U. that cost double this price (they can even cost less than the average junior developer in your home country).

So, think globally, do you research of the lower-cost neighborhood, compare the prices and available tech resources pools and create a shortlist of nearshore / offshore providers to partner with. Make sure these providers have:

good access to the local market for tech resources strong employer brand / positive track record on the local IT market experienced IT recruiters with strong portfolio of candidates as well as headhunting

best practices legal entity in your home country (this will allow you to have legal venue in your

home jurisdiction) transparent pricing model (e.g., each team member’s salary + provider’s service fee,

both fixed and allowing for long-term strategy planning and budgeting) value-added consulting offering Agile development methodologies put in place

2. Team up with a provider of IT resources nearshore or offshore

Analyze your shortlist of IT resource suppliers carefully and choose one that has shown the ability to best meet your expectations and budget.

3. Define your project scope and create your desired team profile

At this stage you should sit together with your chosen supplier’s HR team to define roles and responsibilities within your project team. Once done, create job descriptions and wait for your provider’s HR consultants to come back with candidates.

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4. Promote your startup and software project within the local IT community

At the same time, promote your startup and software project you intent to hire for on the local IT market of the chosen country.

In Eastern Europe, for instance, many software developers like working on challenging and interesting projects, as such projects provide them with more opportunities to master their software development and tech lead skills. As such, you need to set a footprint on the local IT talent pool and access some of the major events within the local developer communities:

participate in conferences, seminars and small meetups as speakers and presenters

sponsor local hackathons and coding contests

create some buzz by getting local media coverage

To cut it short, make your brand as visible as possible and picture your project as something very challenging and exciting to make every local geek want to join your development team!

5. Interview every candidate supplied by your offshore / nearshore IT talent provider and be responsible for each final hiring decision

Of course, you may not have appropriate project management resources in-house to help you make the right hiring decisions. In this case it may be worthwhile to hire a part-time project manager or technical consultant on your partner’s site to assist with technical interviews and hiring decision-making.

Alternatively, you may invest in hiring a full-time PM to oversee your whole project development cycle, while you fully focus on marketing and business development.

6. Always negotiate salary and social benefits with each specialist to be put to

your offshore / nearshore development team

Again, in Eastern Europe it’s a standard to discuss a gross monthly salary (including income tax and other deductions as per the chosen country’s policies) and offer a basic social package that can include medical insurance, paid sports coverage, and other features.

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7. Make your team fully Agile

Hire a professional Agile PM or Scrum Master to make your development cycle fully Agile and DevOps-based, get your team up to speed and expected productivity level and accelerate the ramp-up of your project.

8. Identify communication and performance gaps in a timely manner

Have your provider’s HR team to conduct periodic performance evaluation and employee satisfaction surveys. This will allow you to identify any kind of issues on time and fix them before they become crucial for your project’s success.

9. Treat your offsite team as your in-house one

Once your team is up to speed and 100% productivity, treat your code geeks as if they were your kids:

offer some perks to make them feel as comfortable in the office as in their own home

raise their salary regularly, but according to their performance and commitment to project success

offer some material and nonmaterial rewards for meeting a critical project milestone or a deadline

let them grow professionally by attending IT events and workshops, networking with peers, having business trips to your head office

take them out for a team building at least once a month (yes, programmers like beer and pizza a lot!)

10. Scale your development team up and down according to your current project needs and team performance

Another advantage of leveraging external software development resources and building up an Agile team offshore or nearshore is flexibility in team growth and reduction. As a rule, when you partner with an IT resources provider, you have a 30-day notice period as per contract and can easily downsize your team if you aren’t happy with an employee or can’t afford to have extra people in your team.

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Bottom Line

Don’t believe those who say startups don’t need “ninja” developers and can easily create their software solutions by building up and nurturing a team of junior developers. One experienced senior developer can literally be 10x more productive and effective than 3 junior guys who have nothing under their belts but own ambitions and thirst for knowledge.

In order to withstand a fierce competition on today’s digital solutions market and grow into a real business, you will need to establish and retain domain expertise, accelerate your product delivery to end users and focus on business development, lead generation and product marketing. You do need professional and experienced software developers to achieve all of the above. Focusing on candidates from big companies is a “typical form of hiring self-sabotage”, according to Matt Mickiewicz, owner of Hired.comvi. You just won’t be able to offer them perks and salary levels to match those of Google or Microsoft.

The only feasible solution for you to become flexible and focus on brand development and customer acquisition while having your software development project managed and delivered timely is to build your own Agile team of highly competent developers in a lower cost country abundant in tech resources.

After analyzing a broad range of startups success and failure factors, Allmand Law researchers concluded that “successful startups seem to be flexible enough to shift with changes in the tech climate”, whereas unsuccessful startups fail due to a lack of vision and terrible timingvii. How do you make sure you have a strategic product development vision and are agile enough to adapt promptly to rapidly changing market conditions if you don’t have experienced people in your team to join you in your journey?

10 Steps for Startups to Attract and Retain Best Software Developers | www.intersog.com

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Additional Resources:

o “My Recipe For Successful Offshore Agile Team Management” by Mike McLaughlin An experienced software development project lead shares ins and outs of building from scratch and managing own Agile development team in Ukraine.

o “Travian Games: Trust is the Key to a Successful Long-Term Partnership”

Interview with Wesley Scott, Director of IT Engineering at Travian Games, and Jörg Strathaus, CTO at Travian Games, about their experience building and managing dedicated development teams in Ukraine.

o “Matt Cooper, oDesk: Outsourcing Allows Startups To Compete With Giants Like Facebook”

Wrap-up of Matt Cooper’s speech at IDCEE 2013, one of the biggest conferences for IT entrepreneurs and startups in Central and Eastern Europe.

Follow us to stay tuned!

10 Steps for Startups to Attract and Retain Best Software Developers | www.intersog.com

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About Us Intersog is a global provider of IT Teams and software development projects in the e-commerce, automotive, manufacturing, education, entertainment, gaming, digital media and other industries. We utilize both a traditional Time and Materials (T&M) project-based approach and a dedicated Agile software development team model.

Founded in 2005, Intersog is headquartered in Chicago, IL, has 2 sales offices in Vancouver (Canada) and Berlin (Germany), and runs 3 development centers in Ukraine.

We boast around 300 native apps in iTunes and Google Play that have seen over 10,000,000 downloads so far. Our list of awards includes, but is not limited to:

o "Best iPhone Development Company 2011" by the Best Web Agency

o Top 10 iPhone App DevCo's 2011

o #1 “Putting the Social in Social Media Games” award for "Raise the Village", 2011

o “Best App Ever Award” 2011 and 2012 in Adult Education category for our Android "World Academy Online" app

o Mashable’s Top 8 Educational iPhone Apps for Small Business Owners for “Learning To-Go” app, 2011

o AppPicker’s Best Project Management Apps for iPad for “MBA Learning Solutions” app, 2013

o BusinessBee’s Best Business Communication Apps Ever for “Interview Assistant Pro” app, 2013

Please check out our website and tech blog for more details.

i Mashable, 2013 ii StatisticBrain, 2013 iii Ibid. iv PandoDaily, 2013 v On Startups, 2013 vi Fast Company, 2013 vii Mashable, 2013