RUN, don’t walk away from that $5/hour dev shop

Originally published on http://www.appsterhq.com

How to find the best team to build your app or digital product.


It’s late on Thursday afternoon and I’m talking to Stephen, a potential client with an all-too-familiar story.

“So, how much money have you invested in the product so far?” I ask.

He sighs deeply. “Almost a quarter million dollars.”

“I looked at the dev work — and the news isn’t good,” I reply, suddenly aware that I sound like a doctor who’s about to share some alarming test results. “The app is built on spaghetti code. The control structure is all jumbled, and it looks like a lot of different people have messed around with it over the last few months.”

There’s a long pause. I’m fairly certain what will come next.

“Can you help us?” he asks.


It’s my job. Every month, I have at least 20 variations of this same conversation.

Someone had a great idea for an app or digital product. The cost of hiring a real software development team was daunting, so they found a cheaper option.

Maybe it was a cobbled-together group of freelancers or a design agency that does some dev work on the side.

Either way, six, nine or even 12 months have now passed and they have almost nothing to show for their time and money.

It’s devastating. These are smart people who have spent hard-earned cash (theirs or someone else’s) trying to build a viable product. They placed their trust in a team that was doomed to fail.

I also understand the instinct to save money. Budget constraints are real.

Even if you have the funds, we all love a bargain, and the price tag for full-service software development can sound steep.

But, it’s not arbitrary — and working with an experienced team ensures you’ll be able to sleep well at night. People like Stephen highlight why I want to explore:

  1. The true value of professional app development, and how dev firms operate at each different level.
  2. How to ensure you hire the right team to build out your idea.

Level 1 — cheap, cheaper, cheapest

Ghosting developers

Freelancers, online contract sites, overseas sweatshops, and other on-demand developers represent the far end of the spectrum.

They often charge shockingly low prices and promise to deliver your product in record time.

I have nothing against freelancers, but flaky contractors give the practice a bad name.

The biggest challenge I’ve (repeatedly) experienced is watching freelancers disappear. Suddenly, your designer or developer goes dark.

You can’t reach this person by Skype, email, phone or with a Game of Thrones-style raven. That’s a serious problem when you have real shipping targets and you’ve spent serious money upfront.

It sounds dramatic, but the disappearing developer scenario happens ALL THE TIME.

Even if your virtual team member just gets busy with school or a full-time job, the delays can threaten your business. It’s not worth the hassle.

Shady dev firms

The $5 or $10 dev shops are another issue entirely.

These are typically offshore firms where the code is held together with glue, staples and underpaid labor.

After all, how can you possibly build software for $5 an hour? Answer: your talent has to be very junior and very cheap.

I’ve seen these coding sweatshops firsthand, and the reality isn’t pretty.

They hire grads out of college and pay them $200–500 a month. These amateur, inexperienced developers work on at least half a dozen projects at once and often piece together multi-app IP to create sketchy Frankencode.

Security, performance, code quality and scalability are all thrown out the window. You’ll get a crappy product that reflects the discounted price.

These young engineers are often exploited on a personal level, too.

Their passports can be held as bond and they’re not paid on time or in full. The term “sweatshop” has been used for a reason; it’s not fair and it’s not a model that anyone should support.

Level 2 — Outsourcing in full-service clothing

Hybrid agencies, brokerage firms, and middle-of-the-road dev shops

One of the Melbourne-based software firms recently entered liquidation. No one wants to see a startup fail, but I confess I wasn’t a fan of how the company ran its business.

Like many of these hybrid companies, they had on-site Project Managers (PMs) and looked like a professional, full-service firm, but they outsourced the actual dev work to $5/hour shops and freelancers.

This model is becoming increasingly common in the tech community, where so-called “expert” firms and consultants only pretend to have in-house dev teams.

The hybrid model is problematic for the same reasons as hiring an unproven freelancer: risk of disappearing coders, shoddy workmanship, missed deadlines, unreliable standards, and a host of other obstacles.

It’s great to have your own PM on the project. But, if that person is just a go-between for an overseas chop shop, you’re not any better off than if you’d hired the low-price firm yourself.

Working with a design agency that dabbles in coding is not a formula for success, either. You’re putting the entire project at risk.

What’s at stake when founders cut costs

I can confidently say that a top-100 app has never been built by a small dev shop, offshore firm or design agency.

Today’s competitive market has such high standards that these players can’t keep up. I’m not saying that’s a good thing; it’s just the reality.

It’s frustrating to hear from people who invested $10–15K to build a small app, but received a garbage final product.

Even worse, a brokerage firm with a face in Australia, Europe or North America that charges $50–60K and still hands over spaghetti code is cheating their customer.

Before we talk about what you should look for in a dev firm, let’s review what’s at stake if you choose the shortcut:

A. The product is poorly designed. It’s cheap and looks dodgy. Users don’t trust the interface, so they don’t download the app or spend money on it.

B. The creators missed every deadline. Nothing was finished or launched on time. Windows of opportunity narrowed and bills piled up.

C. The low price tag ballooned due to endless change requests. In the absence of a clear scope of work and a detailed brief, every modified feature (and elements that should have been included) are labelled as change requests. Some firms even base their business model on billing 200% of the contract value for so-called “extras.”

D. The app isn’t scalable. New users strain the system. A best-case scenario of solid growth actually becomes a liability when the product bulges under increased traffic.

E. Quality is negligible. No testing was conducted, and no performance or security protocols were put in place. User data is at risk and your source code could surface online at any point.

F. The code is unusable for any other developer. Even if you can upscale to a legitimate firm down the road, they’ll have to start from scratch. It’s like building a house with a cracked foundation and moldy beams.

Level 3 — Full-service, professional software development

Paying for top talent

Smart, experienced software engineers are keen problem solvers. They’re incredibly valuable.

And given the demand for top talent, why would they choose to work for $5 an hour? They just don’t.

A professional firm pays top dollar for these people — and with hundreds of projects on the go, they can absorb the cost of recruiting, hiring and retaining the best in the business.

Talented developers, designers and engineers build systems that are scalable. They raise the bar. They create a UI that’s sticky and addictive.

After all, why do companies like Google and Facebook spend so much money on their teams? They know the value of critical thinkers and creative problem solvers.

Business consulting comes standard

A digital product is more than an app; it’s a business that requires a full ecosystem of support.

A sketchy dev firm will build an app even if the brief doesn’t make sense. The pros will test assumptions and poke holes and look for problems long before they appear.

That’s how you create something great.

So many people face disappointment when they learn that the App Store won’t accept their dysfunctional game, or a broken billing process lost thousands of dollars in potential transactions.

A full-service firm will ensure all these details function effectively to support your business.

Design that recognizes cultural differences

There’s a huge advantage to working with a firm that employs designers from Western countries like Australia, UK, the U.S. and Canada — and it’s not a matter of global elitism.

Design is a highly-nuanced blend of art and science, and there are major cultural differences in how people interact with products.

If you’re hoping to target western users, it makes sense to work with designers who share that cultural sensibility.

If your app is for a different market, you still need people who understand how to create different versions or a build an international strategy that speaks to your target customers.

Exacting standards and legal options

Apps require exacting standards in code, design, functionality, privacy, usability and more.

A professional firm will apply stringent practices and procedures to ensure you get an exceptional product. They’re staking the firm’s reputation on those standards.

In my role at Appster, I personally review every single product that goes live. And long before I do so, the app has undergone rigorous, multi-dimensional testing.

From a legal perspective, if you get into a dispute with a respected firm, you have a contract with enforceable standards and deliverables.

Want to resolve an IP issue with an offshore company? I wish you the best of luck, but it’s probably not going to go well.

Business has always run on warranties, support periods, contracts, and accountability. Software development shouldn’t be any different. Protect yourself and your investment.

Buyer beware: what to ask and investigate

Before you sign a contract, transfer funds or hire a dev firm of any kind, here are some steps you can take to get the best possible product for your money.

Check the firm’s LinkedIn

A company can claim to have “global offices” or 300 developers on staff, but check to see how many people with real LinkedIn profiles actually work for that firm.

If you can only find one employee who’s reportedly on payroll, that’s a huge red flag.

Talk to the PM

You should be able to speak with the person who will represent you before the project gets underway. Ask:

  • Who will do the dev work? Is it always the same small group or will it change?
  • Where are the developers, designers, technical architects and other team members working?
  • Who do they report to?
  • What kind of experience does that person have?
  • Are they full-time staff members?
  • How often will we communicate? How will daily or weekly meetings be conducted?

Go beyond the code

In addition to strong development, ask about user testing, code reviews, security protocols and IP protection.

I wrote another recent post that can help non-technical founders and entrepreneurs work more confidently with dev teams.

Watch for added costs

Ask how change requests are handled. What constitutes a change? How much do they cost? What’s included and what’s not? What happens if we disagree?


Software development moves quickly.

It’s a fast-changing industry that often confounds people who don’t speak code.

Please don’t let that prevent you from asking tough questions and doing some homework. Cheap prices usually mean cheap products.

At the same time, a pro firm should be able to explain a high price tag and clearly outline their costs.

The truth is, anyone can start an app development firm these days.

Just put up a website and write some copy about your “developers.” That’s why you need to protect yourself.

Dig a little deeper. Be optimistically wary. Make sure you’re getting quality work at every stage.

It’s the best way to honor that product idea you’re excited to share with the world.

If you have any questions about dev shops, spotting shady characters, or anything else related to finding the right product team, let’s talk.

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Originally published at http://www.appsterhq.com