The Real Costs of a Freelance Developer Vs Hiring a Web Development Firm

Lessons Learned from a Startup Entrepreneur

After a fulfilling career in IT solution selling, I was itching for a change. Entrepreneurship seemed like the next frontier to explore. I had a grand idea of creating a destination site where businesses can find useful information at a glance to help them find and engage service firms in IT, web and app development that would be the ideal fit for their project. For all intents and purposes, a technology startup.

When assembling the startup team, I turned to my long-time friend and colleague “Judy” to first confirm if the idea stood the test of her joining the venture. She agreed there was a need for this solution in the market and just like that we were off to the races. Luckily, she also knew our other co-founder, “Peter” extremely well and he is a master in UI design, being an essential differentiator these days in the market. Judy and I handled most of the business elements and Peter was going to help design the site. But ohhh ohhh…like so many startups, we needed to find a technical co-founder to join our venture — what were to do?

Well, here were our choices:

  1. Technical Cofounder: Go to several meetups, TechTO, hackathons, etc to try to hopefully find a technical cofounder for equity stake
  2. Student Developer: Hire a student freelancer
  3. Senior Developer: Hire a more seasoned developer
  4. Development Firm: Hire a development firm
  5. Advertising Agency: Hire an advertising agency

After careful consideration, this is how those five choices turned out for us:

  1. Technical Cofounder:
    Spent 6 months trying to find a technical cofounder and it was literally like finding a needle in a haystack, no luck there
  2. Student Developer:
    We did end up going with this option, for $25/hr, after spending a year of searching for a technical co-founder
  3. Senior Developer:
    Although appealing for so many reasons, we just felt at the time that we couldn’t afford (most developers we had interviewed cost between $50 — $100/hr)
  4. Development Firm:
    We had seriously considered this option but we were being quoted between $40,000 to $75,000 for our project and we decided to throw our dice and take our chances
  5. Advertising Agency:
    This was not really an option for us because we felt we are not their ideal client and the costs were too prohibitive

Like most first-time entrepreneurs we didn’t know what we didn’t know. After a year in the startup game, some like to call it the “startup grind” — one of the biggest lessons learned is to “experiment” with little to no development…much of the experiments can literally have worked with us doing a HTML/CSS site with no backend functionality at all in order to verify if we even had product market fit.

“Failing fast through experimentation helps to analyze trends that work and discard others that don’t.”

If the experiment yields a positive response, then you double down. Believe me, in hindsight, we had the tremendous ability to run AdWords, LinkedIn or Facebook ads and to better understand the behaviour of our target customers.

Looking back, working with student developers to get our MVP up and running cost us approximately $85,000 and it came with its set of bugs! Although it appeared we paid a fraction of the cost of a senior developer or firm, we often times, had to pay for rework that needed to be addressed due to bugs (and believe me there were some real buggy doozies).

What did the $85,000 get us in 6 months:

  • Homepage
  • About Us Page
  • Team Page
  • Terms & Conditions Page
  • Privacy Page
  • Business User and Provider Login
  • Business User Signup
  • Provider Signup (needed to map)
  • Reset Password
  • Business User Dashboard
  • Provider Dashboard
  • Steps 1–3 (request for quote process)
  • Rendering of results in Step 3, which needed to be mapped to provider registration
  • Django Admin — admin panel to help gather and analyze the data
  • Database to house the data
  • Setting up our environment on PaaS (in our case Heroku)

This also included 2 to 3 students working part time at 10 to 15 hours per week for $25/hr. Oh, did I mention that we had to end up scrapping about $10,000 worth of development because it was done incorrectly — yikes!

One of our issues, common to most startups, is that we didn’t have our project clearly outlined. Sure, we had a high-level understanding of what we wanted, but what we needed to do was a better job of outlining each page and how each page was to function. There was an additional expense in dealing with students who were not as familiar with planning. At times it was the blind leading the blind. It was no fault of the student devs as they were fairly junior with very little work experience and project planning. We too had no idea what it was like to plan a sprint. Otherwise prepare yourself for unrealistic expectations, missed deadlines, pushed out dates, missed functions, and overall frustration.

In hindsight, with a development firm, we would have had a number of resources available to us with planned meetings to help clearly outline the goals of the project. Sprints would have been more defined with firm deadlines established. Once we had a baseline to work with, we could have then maybe hired someone to help manage and update code as we needed.

Although costs often times seems like the most plausible motivator for projects, the real question lies with the cost associated with “time” and the opportunity costs you forgo in being able to build, iterate and learn quickly.

Leveraging a team to develop a strong, logical plan would have been extremely helpful. So, like anything in life, you live and you learn and if we were to do it all over again, we probably would have leveraged a firm to build out our initial MVP and iterated using a hire. It would have likely cost us less money and a whole lot less pain in the long run.

The irony is not lost on us. We were building a platform that helped us address our very own problem at the time. We would have absolutely used BizXPro in our own search for the top rated web development firm to help us get started and will moving forward as we look to scale and grow the business over time.

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