Technical Transition |
2/26/08 - 7pm |
Startups:
The idea is the product of its business foresight.
The output is the sum of its founder’s technical abilities.
Version 1 is best work the founders are able to put forward. Wherever the limits of their creative and technical abilities lie, will be the constraints that 1.0 will abide by. Things that are beyond their level of skill will go underdeveloped or simply rough around the edges. While there may be a jack-of-all-trades mindset within the group, this concept remains intact for the simple reason that there will never be a single person who is competent at everything. Likewise a small company will never have the ability to polish every part of their product using only the founder’s skill set.
It is obviously assumed that down the road, once the vision is proven successful (or at least continues to exude potential) that other employees will come on board to fill in the gaps. An easy assumption to make- as all “down-the-road” assumptions are.
A company with resources above its own cash flow can very well be able to expand in this manner. (finally a good reason for VC-) However, most small successful companies (by successful I mean profitable) are not in a financial nor a need based position to warrant a completely new addition to the team.
Let’s take a startup of 3 founders who is need of advanced design work. Up until now they have been able to manage the design aspects of their projects marginally. However, it is obvious this is not sustainable and to achieve the next level of development they need a design that can thoroughly match the advanced nature of the rest of the project. The first issue is that in a 3-person startup, the addition of another person is a huge capital expense. Secondly, though there is a need for design work, there is not likely to be enough to completely warrant another worker altogether, much less the implications of upsetting the balance of the ‘original’ team.
The obvious solution is contracting the work out.
This carries its own implications, but may be the practical solution.
A business in between stages of success is always in a precarious position.