Building a capable dev team – External vs Internal

Photo by Juhan Sonin   – CC BY

Whether your business is a tech startup, an existing company with a new venture, or a company interested in improving workflow with a new tool, it seems like everyone is trying to build a great technology team.

In this article, I’ll discuss how you might go about building the team, and critical path items you should consider.

External Team

An external team might be a custom development shop or a collection of independent contractors; either way, the team is external to your actual company. The advantage of an external team is that your work engagement with them is demand based.  If you don’t have any work for them to do, you don’t have to pay them.  You generally pay a fixed fee per hour or project that covers everything – no healthcare, tax withholdings, benefits, HR issues, etc.  The down side is that you are subject to their production schedule, which another company may also be vying for.  Whether it’s a development shop or a contractor, there are several pros and cons to consider.

Development Shop

An existing development shop is a group of people that already know how to work together; they’ve assembled all of the key roles in order to get things done.  You don’t need to worry about the project workflow, what technologies to use, or whether you need a QA tester or infrastructure engineer – they’ve already got it figured out.  If a particular team member goes on vacation or takes another job, you don’t have to worry about it because your engagement is with the company, not the individuals.  The company will take care of covering someone’s responsibilities with a capable stand-in or replacement.

The down side is that you’re typically going to pay a higher rate because all of those inter-workings are being managed for you.  Additionally, if you don’t care for the style or delivery of a particular team member, it’s not always your prerogative to replace them.  If the company is big enough, you could discuss having an alternative member join the team, but often there may not be anyone else available.

Group of Independent Contractors

Like a development shop, if there is no work, you aren’t on the hook to pay independent contractors.  However, there are some key differences to consider.

With a group of independent contractors, it is your responsibility to know each role that is required and to fill it with a qualified contractor.  The team communication overall may be more disjointed in this configuration, and in fact it may be the case that team members don’t communicate with each other at all.  You or someone at your company might be the project manager that coordinates the movement of information, data and work output from one person to the next.  The advantage is that you get to be very choosy about the actual person in each role – maybe you are concerned about their rate, or perhaps about their level of work quality or communications.  Whatever it is, you get to make the choice, but at the same time you have the responsibility to make the right choice, or it will impact the overall progress and capability of the team.

Another thing to consider with a collection of contractors is bottlenecks.  If one person in the critical production workflow is out sick or goes on vacation, everything stops.  There is no one to stand in and cover their responsibilities, and you bear the burden of finding a replacement, whether temporary or permanent.

The thing to think about with a group of independent contractors is whether or not you feel comfortable being the project manager and workflow coordinator for every step of the project.

Internal Team

An internal team is somewhat of an evolution on the group of independent contractors, with a key difference being that they are all full time employees, so you don’t have to wait for an opening in their production schedule.  You are still responsible for knowing the roles required and filling them with capable people, however, you benefit from better communication and coordination.  An internal team somewhat takes the best parts of the external team options and brings them in house.

The internal team isn’t always cheaper, and is definitely more complicated from a Human Resources perspective.  This, however, isn’t any different than hiring any other positions in your company, it’s just a question of whether you are ready to take on full time employees or not.  If you are a bootstrapped startup, that may be something to consider.

With the hiring of any full time employee, you have to consider payroll, healthcare, vacation / sick time, performance reviews, and supplies such as desks, chairs, computers, printers, etc.  Often in the case of a startup, the production of the project might need to come first in order to generate revenue and afford some of these things later.

Leadership

When building an internal team, it’s critical to think not only about the production skill set of each member, but also about the team leadership.  This could be a senior team member, project manager, or management in your company.  Whoever fills the leadership role, it is critical for that person to have a plan, provide structure to the team, and be able to motivate and inspire the team members to produce good work.

HI! I'm a software engineer, bootstrapper and lean business geek. I'm passionate about building software and businesses. Here I share my tips on validating, developing, marketing and growing SaaS ideas. Learn More...

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