The Employee Myth

For years I’ve heard VC’s and founders claim, “we want bodies in seats”, which is code for, “we want to increase our perceived value by boosting our employee roster”.

There is so much to unpack in this sentiment so let’s start with the basics.

Cost

Software is an iterative process; build, test, release and incorporate feedback. These cycles can often take months or years, in which time engineers often have idle time but are still costing the company money.

A good west coast engineer will cost about $150K / year. Most applications will likely require at least a backend and frontend engineer. So let’s assume your baseline engineering payroll, excluding benefits, will be about $300K / year.

Iterate can build entire platforms for $150K, featuring enterprise-grade infrastructure, mobile and web applications, and custom administration tools.

We can achieve this level of efficiency for two primary reasons:

  1. Like electricity, you only pay for what you use.
  2. Like a championship sports team, we have years of chemistry and experience working with one another. We know our strengths and how to get things built quickly.

Leveling up

Developers at large companies typically have idle time, and idle time rarely manifests into productivity.

By the nature of our business Iterate developers must use their idle time to level up their skills and or contribute to other projects. This means external teams are able to bring unique solutions and fresh perspectives to your application.

Reward hostages

How many founders and early employees do you know who were excited to go to work for an acquiring company? Everyone I know who’s exited couldn’t wait for their lock-up period to be over. Any acquiring company has to know that the new hires they pick up aren’t likely to stick around and contribute value and even if they do, they’ll likely want to leave as soon as they can.

Do you want employees who are just there for the paycheck, or do you want people who take great pride in their work because they love what they do?

Founders brilliant idea

Founders often forget that everyone isn’t as emotionally attached to their vision as they are. I’ve succumbed to this delusion before, expecting every employee to follow my vision and throw their life at it the same way I was willing to.

During my first startup, I hounded a potential candidate for months, telling him how we were going to be rich and change the world together. After many failed attempts to convince him to come onboard, I eventually conceded and hired him as a part-time consultant.

This was the best hiring decision I’ve ever made. This individual ended up bringing tremendous value to our organization. For one thing, he was able to maintain a clear perspective on the product and stay out of political affairs. He offered valuable insights that only fresh eyes could bring. He didn’t have a dog in the fight, other than to provide the best guidance, as he wasn’t trying to jockey for position and win fans.

Conclusion

Building companies is hard, and typically takes dozens of pivots before anything of real value presents itself. Employees will come and go. You can spend your time trying to win over and retain employees, or focus your energy on building a laser focused product, marketing plan, and solving a real-world problem.

Do more with less: Leverage the wisdom and efficiency of a distributed team to take your company to the next level.

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President and CTO of iterate.co

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Lance Sanders

Lance Sanders

President and CTO of iterate.co

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