Hiring a software developer and/or co-founder CTO to build your MVP

Congratulations!

You may have raised some early seed capital (or considering sweat equity rather than seed capital) to build a minimum viable product (MVP) and now thinking you need to hire your first team member or possible CTO as co-founder.

Building your own team to get your startup going is exciting right? Or maybe even a little nerve-racking? How will you find the right person without incurring recruitment fees?

Ever wondered why 90% of tech founders fail within the first 2 years?

Try googling “startup hiring a CTO” (perhaps you already have?). You will find a rather large number of stories questioning whether this is even the right decision for a startup. There is good reason for this believe it or not, it’s one of the major contributing factors why tech startups fail. Yeah, I know, that seems counterintuitive, doesn’t it?

Chances are that you are a founder without deep tech knowledge or experience to build an MVP. But what you will have is a highly developed idea of what you want and what problem your product is solving in the world, perhaps born of some kind of personal “lived experience”. You may even be one of the rare tech founders who have deep tech experience, too, albeit this is less common.

Hopefully, you have already developed a “non-code MVP” and tested it robustly in your chosen market for commercial viability before writing any code to build your MVP. In this blog, I will presume you have already market tested your proposed product and commercialisation strategy. I’m being optimistic, sadly, as most founders miss this crucial step with a non-code MVP, or worse, it wasn’t performed objectively with a critical eye, leading to a misguided and overly optimistic view that they are onto something great.  It is perhaps one of the first big mistakes that founders make, i.e., not objectively completing what I prefer to call “tell me why I am wrong” using a non-code MVP as your tool. And what do I mean by objectively, “looking for the reasons it won’t work vs looking for the confirming evidence for why you think it will”. This MVP validation process phase will be a major topic for another blog coming soon, it is so critical to establishing the first part of your foundations that will lead you to success.

Presuming you have robustly tested and validated your MVP design with a sample of users from your selected market (preferably a good number of end users and not just 2-3), including your commercialisation strategy (i.e., how you will make money), once done you are now ready to build your MVP.

How do you know if your MVP testing results are successful?

It is important to set the bar right for what is a “good MVP”. If your product is successful, its object must be to truly excite your users/customers. To “wow them”. If it doesn’t, it is likely to be a long, hard road ahead! It will feel like you are rolling a snowball uphill rather than watching it roll itself downhill, getting bigger and bigger as it gains momentum. Get this right early and OMG, you will avoid so much pain and time lost getting to market with your product literally “flying off the shelves” so to speak vs the hard slog of one-to-one sales engagement with every prospective customer. It’s just another reason why so many startups fail in the first 2 years.

The decisions you make now are so critical that they will haunt you for years if you get them wrong. I know it sounds dramatic, but sadly it is very true. Here are other reasons why the vast majority of MVPs fail; not scalable, poor security compliance, poor selection of underlying platforms, delivering poor user experience, not being well aligned to how the product is to be monetised, failure to comply with privacy laws! That means the $200-300k or more that has been invested in building an MVP is inevitably trashed (or should be), and perhaps worse, attempts are made to fix it, which is like throwing more good money after bad, like flogging a dead horse. Building on top of a poor foundation is NEVER a good idea at anything you might do, and it is critical when building a tech product.

How is it that all of this could be true, and what is the cause? Why isn’t the industry fixing this? Tech startups still succeed, don’t they? Well yeah, only 10% of them, though and these are the ones you are hearing about.

“Why isn’t the industry fixing this”? Because it is the status quo. It’s just how it is and has always been. But it doesn’t need to be.

What is the underlying cause?

The 21 biggest challenges founders face that are not being appropriately addressed. If you knew the risks in advance, wouldn’t you take mitigating measures to minimise the impact of these if you could?

To achieve early successful execution in building a first-class MVP requires access to a broad range of skills, the right platforms, architecture and a team that know how to work efficiently together. To do this properly, a founder needs to be able to access people with at least 5-10 years of experience across the following areas:

• User & market research expert(s)
• Product Manager
• Scrum Master
• UX designer
• UI designer
• Front end developer
• Back end developer
• Solution Architect
• Database Administrator (DBA)
• Business Analyst
• QA/tester
• Customer support expert
• Payment gateway expert
• Website/mobile App analytics expert
• PPC – paid advertising expert
• SEO expert
• If you are integrating with 3^rd party systems (most apps do), you may benefit from people with experience with the integrations that you need

In addition, you’ll need to make the following critical platform choices – get these wrong, and you will be dealing with a) future migration cost, valuable time in market lost and hassle, b) difficulty finding people with the skills in your chosen platforms or find they are extremely expensive if hard to get, c) future integration flexibility issues, and d) scalability and security issues.

What critical platform choices need to be made?

There are a surprising number of platform decisions that need to be made from the outset. Choosing badly will set you back later.

• What “stack” will your product be written in? Often this is selected by default by the developer you have probably chosen, and their own preferences born of what they are skilled in. So not based on any key strategic decision process.
• Code platform (Github, bootstrap etc)
• IT Backup and Security system
• Project management tool
• Prototyping tool
• Test case management tool for managing test case documentation and scenarios
• Hosting service provider platform and infrastructure architecture
• Collaboration tools like Teams, Slack, Google Docs etc
• CRM system – as this will likely need to be integrated with your website/mobile app
• Customer support service system (sometimes a module within the CRM)
• Inbound telephone call management system
• Outbound call monitoring and recording (important for customer support operations)
• Web and mobile app analytics tools (you need to be able to measure and have visibility of user engagement metrics)
• Email platform
• Marketing platform(s)
• Google Search Console
• Social Media handles
• Survey platform

Now don’t get me wrong, you may not start using all of these platforms and tools from day one, but you will want to have worked out that roadmap before you start.

Critical Metrics - Success measures that guide you

In addition to all of the above, you also must have a clear handle on what performance metrics you should be monitoring that let you know if your business model is working. These will be closely aligned with your commercialisation strategy. These will likely include some or perhaps even all of the following (I haven’t listed all here as it’s a VERY big general list to choose from):

• CAC (Customer Acquisition Cost)
• ARR (Annual Recurring Revenue)
• Customer Churn
• Monthly Website Traffic
• Monthly Mobile App downloads
• Website/App engagement stats
• Lead stats

You will want to have implemented the systems to measure all of these stats from day one. Without clear insight into performance analytics, it is akin to flying a plane without instruments!

So what’s wrong with just hiring a developer or two to build my MVP? As I have already argued, it is unlikely (extremely unlikely) that the developer that you will select will have the broad skills necessary to address all of the requirements to build a scalable and secure web/mobile app, with the optimal UI/UX, based on deep end user research and on platforms that you will likely want to be on long term. If you happen to find that highly talented and scarce individual, they are unlikely to want to work in a startup that can’t pay them the income they are seeking, and that is risky for their career.

I know I have painted a complex and ugly picture here. The reality is that most startups ‘push through” without the benefit of being able to access such a broad and talented team. Some ultimately come out the other end (a few years later), showing signs of success. 90%, however will fail, and even those that did succeed will tell you they wished they had access to all of this from day one. They burned through Pre-SEED, SEED, and perhaps even multiple SEED Extension raises, pivoting, revising and often completely re-writing their MVP. Not only did it result in delayed progress in getting to market and growing their business, they probably have developed ulcers getting there.

A tech founders confession

Take my own experiences for example. I was 50 when I started my second startup and was one of the first in a small team in another startup before that, working with people that I had already worked with for 6 years in a company prior to that one. I had 30 years IT and management and technical experience, broad experience with software (SaaS and on-premise software/ISV’s), hardware, systems integration, managed services, application hosting, management consulting, sales, marketing (B2B2C), customer support experiences gained dealing with very small and top 100 companies in Australia including local, state, and federal government agencies and across a broad range of industries.

I co-founded my previous company in 2011, which I led as CEO for 11 years, including listing it on the ASX. You would think that experience should have underwritten success, right?

But despite my experience, the CTO I hired, whom I had known for years and who was previously with a major market leading online media company, and another seasoned executive resulted in us making a lot of wrong decisions in the early years. The result was we burned through more capital than we should have, took longer to get products to market than we should have, and had to re-write our app more than once! Our architecture was not right, and the platform costs were inefficient.  We didn't know what we didn't know, didn't conduct nearly enough MVP study from day one, and it wasn't until our team grew to +30 that we started to get more right than wrong.

Over time I ended up building a first-class high, performing team and built a platform that services thousands of loyal healthcare businesses (customers) across a broad range of professions GP’s, Dentists, Optometrists, Pharmacies, Specialists, Veterinarians, Allied Services, Health Insurers etc (modalities) in Australia and New Zealand, completed 4 acquisitions and enabled millions of Australians to engage through our platforms taking over 18m online appointments. Customers and users loved it.

I wished I had access to Dreamoro Services when I launched that business!

It is not an unusual journey for a founder, but it doesn’t have to be that way! That is why I founded Dreamoro, to bring to tech founders a broad set of proven skills from a high performing team that has been working together for years, as well as leadership coaching, mentoring, and 3rd party trusted expert advisors and consultants who are all aligned with our values and have experienced all the scars, so you don't have to.

We will bring to you and your team the additional skills and experiences necessary to help you build a successful MVP and support you in your early years to become a successful business with financial economics that would not otherwise be possible.

Bottom line

Effective utilisation of Pre-SEED, SEED, and Series A Capital, a quicker time to market with early results that have been demonstrated, and better sleep knowing you are working with a partner who shares your passions and your ambition for success while assisting you in avoiding the numerous mistakes you could otherwise make along the road. Dreamoro Services -  a high performing results oriented managed services team that works as your team and under your direction, that is tailored to your specific needs, adjusts as needed over time and uses capital efficiently and cost-effectively.

Highly Recommended Related Blog Read: "Software delivery challenges commonly faced by tech startups", by Dreamoro Chief Delivery Officer

Additional must-read: "Top 21 Biggest Challenges Tech Founders Face"

‍

#Key Takeaways

• Have you defined and robustly tested your MVP (preferably non-code MVP) properly based on extensive and objective user and market research, including your commercialisation strategy?
• A developer and/or CTO simply won’t have all of the expertise you will need in your early years, leading to a string of poor decisions and outcomes
• You can’t hire all of the right technical and commercial skills to build your MVP and have them on your team full-time. It’s not economical, you won’t have enough capital, and even if you did (and burn through it faster than you need to), there is a better way!
• Know your product success metrics before you get started, and make sure you have put in place the systems to monitor these analytics