Episode Description

In this episode Thanasis and Dimitri talk about how to hire your first developer as a non tech founder.

Episode Notes

Transcript

Dimitri [00.00.10]: Are you an entrepreneur, a designer, a developer, never before has it been easier to get your new venture off the ground. Whether you’re just getting started or have already begun your journey, you’ve come to the right place. In this episode we will dive into a new challenge breaking it down into simple, digestible items. I’m Dimitri…

Thanasis [00.00.22]: …And I’m Thanasis.

Dimitri [00.00.26]: And you’re listening to Listen-Ship-Repeat, this is episode No.3 “Five key ways to hire your first developer as a non-tech founder.”

(Music)

Dimitri [00.00.41]: Alight, how things are Thanasis? How are you doing?

Thanasis [00.00.43]: Awesome! Quite well, quite a busy week. A lot of thing happening these last days. Also, we have the annual film festival in town, so I’ve seen a couple of movies. Not my taste, not my cup of tea. What about you?

Dimitri [00.01.22]: I’ve been working hard, I mentioned a couple things last time. We’re ready to put out some new stuff out to users, actually we already have them out there so we’re in the stage of rolling them out to our users, one feature at a time. Also I’ve been working on a blog post, which I’m thinking of putting on Medium soon. I did a Scrum blogpost a while back. Now I’m doing a Kanban blogpost, as an alternative to somebody that doesn’t want to get in the structured way of doing staff on Scrum. So, I’m working on that and I think I’ll be able to post it in a few days time. So, that’s pretty much it. I also think that I’ll have a go on those movies that you mentioned.

Thanasis [00.02.11]: Yeah, it’s good distraction to everyday life. I had some hard times too, some outages on one of the servers of a company that I’m having a part time contract with and quite a few things that I discovered in terms of the heroku platform, but those are too technical for now so I’ll leave it for another day.

Dimitri [00.02.35]: Well, I hope it ends well for you.

Thanasis [00.02.37]: Yeah, we are still optimising the platform and scaling up operations so things are under control now.

Dimitri [00.02.45]: Awesome! Okay, today we will look into hiring your first developer as a non tech founder. Hopefully we will give some hints in order for people to be able to achieve that. Do you want to get started, Thanasis?

Thanasis [00.03.07]: Certainly! So, we’re going to go through five key ways in hiring. They are in no particular order. I guess the first one is about educating yourself, since you are a non tech founder who is supposedly coming into the tech industry for the first time you might want to understand the playfield, the environment that you are going to venture in and there are many ways to do that. One of them is to go through a process of doing back to back interviews in quantities, in massive quantities, like thirty, forty, fifty candidates and what that will give you is different perspectives for the same subjects. So, if you systematise it correctly, for instance if you have very specific questions that you ask everybody, ask them the same questions again and again and improve on those questions as you go along and your understanding becomes better as everyone is going to reveal a hidden view on the subject on the matter on the domain of expertise that you are looking for. You will then be able to compare the different responses you are getting through the interviews with the candidates and towards that end educate yourself. That is a standard practice I do, for instance when I was working at an enterprise and we wanted to find an ERP solution along with a CRM solution, that was a totally new domain for me so the standard practise I would use was exactly that, call out every possible vendor and through the selection process I practically educate myself on the subject so that I knew what questions to ask and where to look for.

Dimitri [00.05.31]: Cool! Another thing that I’ve seen with non technical founders or non technical people in general that want to enter this space, this industry, is the subject of estimation when building staff. So, for one reason or the other people might have misconceptions about the process involved into creating software and for every domain that you enter which doesn’t seem familiar, staff almost always isn’t what it seems. So, in the beginning you might be talking to your developers and they would give you estimates about the projects that they’ve been working on and that’s something that you’ll have to become familiar with too and you will have to be dealing with everyday. People will have to justify the time and effort that goes into a project, into an estimation and eventually the cost surrounding that. Some figures around that, in my experience eighty percent of the time staff is off. Another figure that I’ve had to deal with is QA, which is usually twenty five percent of the time, so if a project takes 10 hours you’ll definitely be adding two and a half hours on top of that. So, how can you get better, how can you familiarise yourself better with this? Well, quite simply get on the internet and google it, get onto some blogs, get on Medium find some developers, follow them, look into how they work and accustom yourself with this.

Thanasis [0.07.23]: So if I may Dimitri, one thing to understand here, because this is the biggest point of friction between non tech founders and developers, is that software development doesn’t work like a production line. It’s not the process of putting in some raw materials, passing them through a machine and getting an output in the expected time frame and even been able to factor in the machine failures. It has no relation to that, right?

Dimitri [00.07.55]: Certainly not. However, by observing people that I’ve worked with over the years is that experience is the number one factor in this. So, in the beginning as you said it might be a point of friction because you always want staff yesterday or for some reason you’ve convinced yourself that for whatever reason this task will take much shorter time and maybe you’re right, maybe you’re wrong. Regardless, in a certain amount of time you will get an understanding of how long something will take, like a landing page takes this much, a specific action, talking to a network getting a request back takes that much and so on and so forth. So it’s a combination of looking to the right place in order to begin and get started and the more you work with developers the more you’ll learn and the more experience you’ll get. Understanding the developer culture is something that will assist you in devoir. Developers are specific type of people, maybe they have their own way of dealing with life, problems, the universe and everything…

Thanasis [00.09.16]: …Communicating…

Dimitri [00.09.17]: Yes! You can immerse yourself in this culture though, you can get to know them and the easiest way is getting to know developers and socialise with them, go grab a meal and some beers, that would be the ideal way to do that. If you live in a city with tens of thousands of people or more, there will be an active developer scene and the best way to get to know them is, they will be organising some sorts of meetups. How do you discover the meetups, you can go to “meetups.com”, you can go to local groups, facebook groups and I find that “MeetUp” is a great platform for that and you just show up. If you live in a city you’ll be surprised to find out that there’s at least one meetup per evening, so you can go there, you can get involved, you can ask questions, you can engage, usually they go for drinks afterwards, you can tag along and get to know them. Even if you are not interested in startups, it is a very good way to socialise with people with a special interest in domain.

Thanasis [00.10.36]: Basically this is one of the best tactics you can have in order to attract developers, because the more you are present in those meetups and the more you are exposing yourself to the developers the more they get to know you and trust you, so the moment that you will want to hire developers you will already have a network established. The network of trust really is important and it cannot happen in a day. You have to commit yourself in the process of being engaged with the community and you will be able to see your dividends pay off after a year or so, but it’s something that you need to do.

Dimitri [00.11.27]: And if you want to look at some success stories, I’ve run a couple of iOS meetups, I am running one at the moment, I’ve had people come in and say “Would anybody be interested in picking up a project?” or I’ve had people approach and I mentioned their request at the meetup. So at the top of my head I’ve helped at least three times. I’ve brought people together three times at meetups that I’ve been part of and I am sure that in all the other meetups many other people have come together too. It’s a tried and tested strategy.

Thanasis [00.12.13]: Absolutely! Especially if you want to attract local talent versus remote it’s the only practice that can get you through. So, educating yourself was one way. Another way is how you can vet a developer in order to establish that what they say they are is actually what they are and of course you understand the problem here, you are a non technical founder and you are called upon to judge on technical perspective developer. There are some ways you can actually do that. Firstly, any web developer that is worth it should have a personal website. A personal website where, the very least, they have some kind of photo - I’ve seen all kinds of things - their name, what they do, what their projects are, what their social links are etc. So, get onto their website and check it out, if they have a blog even better, you can start reading on their blog and check their level of english, in case they’re not native speakers, they’re thoughts, how they write, how they structure their thoughts, there are a lot of things that you can tell for them while reading their blogs.

Dimitri [00.13.44]: As an addition to what I mentioned before about the meetups is the creation of your own network and I’m sure we’ve mentioned this in previous episodes, so you are on point in your career, in your life that you’ve been through several jobs, you’ve met a lot of people and if you’ve been lucky enough you’ve built some meaningful relationships, so feel free to reach out to them. If you have your multiple interviews, maybe one a year, your network buddies can join you, maybe you’d like to ask somebody to review a couple of CVs, maybe you’d like to ask somebody to take a look at some blogs or posts that you just mentioned and educate yourself in the process and discover new talent as well.

Thanasis [00.14.34]: Yeah, right! So, Dimitri do you suggest to have a developer friend by your side to aid you in technical vetting?

Dimitri [00.14.41]: Yes, it would help.

Thanasis [00.14.42]: Right! Definitely yes! If you can do that, then yes.

Dimitri [00.14.46]: That’s what I’m saying, if you can do that it would be great and it will help you and most likely you would get a better feed, but there are a lot of soft skills involved too and we will be talking about those shortly. So, even though it’s a hundred percent technical, it isn’t a hundred percent technical job after all because of the soft skills involved, so if you could compliment your search with somebody that you’ve known, that you trust in terms of technical expertise, by all means go ahead.

Thanasis [00.15.18]: Yeah, right! And of course all standard rules in hiring apply so if in whatever means you find a common reference or even if not you can go ahead and ask some references for those developers from their previous bosses. You will have their CVs, their history at your disposal, so it’s totally okay to pick up the phone and say “I’m considering hiring that guy, what do you think?”. Another more passive way of vetting the status of a developer is their social cloud, how do they stand out in the community, it’s a basic “social scan”, starting from standard things like twitter, how many followers, how often do they post or not and of course that on it’s own doesn’t mean anything, it’s just a part of the bigger picture. Next is their LinkedIn, how is their profile, how rich it is, how much has it been used, those things are easy to tell just taking a look at a LinkedIn profile. Then there are some mega developer-Communities, one of them is GitHub of course, which is going to be a requirement for a developer to operate in today’s modern web, so definitely check out their Github page and in there you are going to observe their activity, how many open source projects they’ve made, to how many organisations they belong and as you go and skim through different profiles you are going to understand better how they compare. Another mega community site is “Stackoverflow”, which is a Q&A website, one can ask a question and other developers can post an answer and during that process you earn points and there are developers that have a thousand points, but again you have to skim between their profiles to understand how they compare. So far I’ve mentioned four social networks to get some social proof, there are tens of others and not a single one of them can give a single picture, the whole of them just gives a picture. So, if a developer doesn’t have any of those social proofs developed at a reasonable point, then that’s possibly a flag, well it’s not necessarily a flag, but it’s a good reason to further ask them, like “ why aren’t you present anywhere? You don’t blog, you don’t tweet, you don’t have any open source, you don’t participate in any projects. Why is that?”. You know, that’s a question to ask.

Dimitri [00.19.10]: Not every developer would be present like that, and a lot of great developers are like that, so even if they’re not present in any of these, what would be an acceptable answer for you? For example, if they don’t tweet, that’s understandable, maybe they don’t use LinkedIn. Do you use LinkedIn, Thanasis?

Thanasis [00.19.36]: I do not use LinkedIn, but I do have a full profile.

Dimitri [00.19.38]: Yeah, okay, fair enough. A hundred percent full LinkedIn profile with a photo and everything. So, in terms of what could be a flag I would probably look at Github and I think at this stage any developer who is worth it will have a Github account. They will have a few projects, maybe a few of them are starred and forked, maybe a few of them are on different platforms. Organisations as you mentioned, would you rank Github to be the next one on all this?

Thanasis [00.20.14]: Listen, the idea is like that, if you are twenty years old, fresh programmer out of college it’s expected that you won’t have much, even if you’re not a self driven twenty-year-old , we have seen miracles going on in terms of those social tools, but generally it’s more excusable for a twenty-year-old to have no presence at all rather than an older developer with no presence because even if it’s not your goal to take care of any of your social profiles just through the course of working professionally web development you are bound to be involved in some of those social tools. So, as you mentioned Github is a necessity, you must have asked at least one or two questions in Stackoverflow in your lifetime, right? Otherwise, what have you been doing?

Dimitri [00.21.17]: I have one of my gold badges, so I have a famous question. When something new comes out, there’s always the first round of questions and answers, so you know, swift came out and it was a good opportunity to build out something.

Thanasis [00.21.35]: And to extend on the Github subject and to emphasize on its importance, it has to do with the projects that the developer has done, their portfolio. They can either be, ‘here’s a website’ or ‘here’s a company that I’ve worked with’, which is a url of a startup, a company that’s already online and live and this way they showcase what they did for that company, like if they built it from scratch or made the upload component or whatever. All of those projects are actually open source projects and are accessible through Github. So, the way that you evaluate those and their importance is showcased through the system with stars, which shows popularity of an open source project. For example, I have a hundred open source projects, but ninety five of those have zero stars because they are just staff that I wanted to do and they are really not popular, so that’s something that I wouldn’t advertise as it doesn’t look good in front of the eye of a non tech founder. So, that’s one way to evaluate the open source projects of a developer, firstly do they exist, like are they self driven, active, have they sacrificed any of their free time to do some open source and secondly successful are they in the open source world, which means validation of their peers.

Dimitri [00.23.21]: You know, you briefly mentioned the blogs before and I just got a lightbulb on top of my head as you can also listen to podcasts like this one. So, basically one thing is for sure, if they have no or little social cloud, they must have a portfolio of staff that they’ve done. Nobody can be completely invisible, that’s my take on this. Now, another way is that instead of hiring one developer you can hire two, but that’s a bit tricky. There certain situations that you can approach this that it might make sense to you considering your constrained resources, so I’ll just mention something very particular even if we’ve mentioned it in another episode, but after you make you choice you will want to hire somebody more senior as a part time developer so he can make sure that all the t’s are crossed and i’s are dotted alongside your intermediate junior or even senior developer you’ve already hired.

Thanasis [00.24.42]: Absolutely! And the goal here is to build a product that is hundred per cent robust and maintainable from the get go. That involves a lot of things and we are going to dedicate a whole episode on that. Most of it, you know “TL DR” is about testing and how important that is and we’ve seen so many times in our careers the same movie playing again and again. A founder wants to do it low cost, hires some very cheap developers who are really starting out and who really don’t have the experience of building out systems…

Dimitri [00.25.40]: …some cheap developer labor .

Thanasis [00.25.42]: Yeah! So something comes out as a prototype, they go forward with it, it has some kind of success and then problems start to come out, the same problems again and again, development gets slower and slower to a point of an absolute crawl and finally complete stop, which actually happens one and a half to two years down the road and at that moment you go into a rewrite. You then have the money and employ better developers to do it right. However, all of that lost time will cost not only dead time but opportunities lost in the market, which you could benefit from by actually having a robust and tested codebase that isn’t legacy by the moment it’s written. Again, we’ve seen that movie play so many times and actually this is how me and Dimitri met for the first time, at a company which was in the process of rewriting the whole application from the ground up. Yeah, fun times, but that’s the whole point here. This can be avoided with a way that Dimitri mentioned or it can be avoided by having two developers with hopes of one checking on on the other. However, “the single eyed person can lead the blind people”, so if that’s optimal for you and your business this actually something that you’ll have to stick with and put out as a product quality, but these are thing that you’ll need to consider throughout the lifetime of a product development. That lifetime is between three to five years, so how much is it going to cost you to go on the cheap versus paying something more upfront and having it right from the get go.

Dimitri [00.28.12]: Indeed. So, moving on i think we’ve pretty much nailed the fact that this is technical job which requires tons of technical knowledge and on a daily bases educate yourself and being able to contribute in many ways out there in the world with products, whether they are open source or closed source or websites or apps etc. However, to really bring it home, personality goes along the way. Have you seen “Pulp Fiction”? Personality goes along the way! So, you have to look at character trait, you are the non tech founder and you want to build something in an environment where you are working with somebody in the long term, so you are committed to building your startup and you really need those soft skills, you really need that special kind of person to be able to work with you and communicate with you every single day. So let’s look at a couple of those things. I consider leadership as number one, the first developer is going to be the one that will lead the team as you grow your team out from the two members. We actually have a very good episode you can go back and listen to, about building your project management infrastructure with this person. So, feel free to go back and listen to that and maybe you can conclude them in a couple of points that we’ve mentioned in there. Potentially that’s going to be somebody that’s going to be your product owner, your CTO, your project manager etc., so make sure the leadership checkbox is ticked. If you come to this point in your life also, when you want to startup of the ground, you have this great idea you’ve decided to invest time and money partnering up with somebody, hiring somebody and you don’t want them to leave in the next couple of months, so you have to focus on long term commitment and that’s a combination of several things. We are going to be talking about financial incentives a bit further on, so let’s talk about the non financial staff. Make sure that you build an environment that is nurturing to initiative and incentives and great product ideas and great staff, so you have a very positive and non toxic culture where people enjoy working with each other. You want people arriving at the office or the virtual office everyday looking forward to the staff they will be making until the end of that day and feeling proud for it. That is eventually what will make them stick around, because you know, maybe you’re paying according to market rates or better than market rates, but your competitors do that as well and in order to find good developers requires building that nice work environment where people can thrive will guarantee that they will stick around in the long run. Now, communication, I should have mentioned communication first, but whatever. Make sure people can communicate what they’re thinking, articulate what they’re thinking very clearly, be able to define tasks in ways that minimize the follow up later on. Communicate clearly and document everything so people don’t have to go back and forth.

Thanasis [00.32.00]: Dimitri, if I may on communication, another factor is to be able to communicate complex technical matters in terms that you will understand as a non technical founder, right? Being able to summarise the challenges and make them understandable by your understanding.

Dimitri [00.32.21]: Absolutely! Thanks for that. Being able to explain in layman’s terms where applicable. I think I should also say that as a non tech founder maybe it’s your responsibility to up your game also in what you understand to be technical and I would say, try to meet someone in the middle but more on the technical side, because at the end of the day I think everything else can be expressed in pretty much layman’s terms.

Thanasis [00.32.50]: It is a technical operation.

Dimitri [00.32.52]: Absolutely! And finally social, but I think I’ve covered that we I mentioned the long term commitment so get social, friendly, positive people and the good staff will happen.

Thanasis [00.33.10]: Yeah, I mean the way I perceive it is the way that this developer can bond to other developers, because the biggest problem developers have is their ego and they can go a long way into snob-ing or not talking or otherwise keeping other developers at a side. So, that social aspect has to be well understood and understand where each candidate stands towards that.

Dimitri [00.33.54]: Here we’re saying about the snobby staff, in my experience if it’s done in a good spirit it’s fine and I think that most of the times it happens like that, but when you see it happening it can lead to a bad habit so make sure you cut it at the root, but it’s all in good fun from my point of view, especially from an antagonising point of view or selection of technology and languages.

Thanasis [00.34.29]: Yeah, there needs to be an harmony in all of those decisions. So the final part in hiring as a non tech founder and of course this applies to everything even if you are technically able, is to provide the incentives to the long term commitment for a developer. So, what are the incentives? The incentives are actually stock from your company that you give out to developers and the reason why you’re doing that is because you want them to have a piece of the pie, a piece of the game and you want them engaged and committed and having all of their interests towards the success of your company, of your business. In broad terms there are two kinds of agreements you can make to provide stocks, one of them is stock options and the other one is the restricted stock agreement, so let’s briefly go through them. Stock options means that you give the employee to buy out stocks of your company at a very premium price, so that basically means that the employee, the developer has to give money to the company in order to buy stocks at the premium price, of course those stocks are very restricted and several rules apply on them. Going over the specifics and the details of the contracts is way beyond the purposes of this podcast, maybe another time. The other option is the restricted stock agreement, which is basically handing out the stock directly to the employee, so the moment that those stocks are available to the employee that’s the moment they actually own it. Of course they cannot resell it, it’s up to the company’s board to dictate what is going to happen to these stocks, but for both cases the expectation here is to use both of those tools in the extremely unlikely event of success. At that point, you either have a buy out event if somebody purchases you or merges with you or you go out on an IPO. Those are the events that the aforementioned agreements have as a goal. Now, what to choose and when between those two options? Most likely you would chose the “RSA”, the restricted stock agreement on the very early stage employees, number one, two, three, four, five, maybe and you would use the stock options in a post series A funding. So, after you get your first VC money, that’s when you have by definition set up some stock options pull and something like thirty percent out of your stock options will be reserved to be given out to your employees and a stock option agreement is a more corporate-y kind of thing that gives out less to the employee compared to the restricted stock agreement. When you are starting out as a non tech founder and you need to convince a developer, whatever their skill level might be, giving out stock is the norm today and giving out stock especially in restricted stock agreement can somehow act as leverage to lower the compensation the developers are going to get. This is something that both parties would want to have as an agreement, which goes like “ I am a developer, I want to work with you, I listened to you idea, I really liked it, I kind of believe in it, so I want to invest my time in you” and that’s something to understand, that the developer has choices, so apart from the money and most importantly it’s time that they’re investing because time never comes back. So as a developer, I want to get stock out of that company, right? Because I believe in it and if we both come to understanding and say, “ I want to charge you a hundred units” (whatever that is, dollars, euros) and you tell me okay I will pay you eighty and I will raise you RSO from two percent to three percent, if that deal is acceptable, it’s a win win for everybody. That’s also how you can leverage the RSO instead of just using incentives to replace some part of the salary. Now, let’s talk a little bit about percentages and how they formulate. Typically, when you are the very first sea drowned or before that and you are giving out RSO, what I’ve typically seen happening for the first hire, especially if that hire is senior level that is going to lead your team, build it, hire people and structure everything, they should be given typically three to five percent towards a three or four-year vesting plan and the vesting plan is the method where you give out the percentage gradually overtime versus all upfront, so they will get the five percent after staying four years within the company. The next hire second, third, fourth developer anywhere between zero point one to two percent is acceptable based on their skills and what they bring on the table. That’s pretty much it, beyond Series A you are going with stock options and at that point there is no meaning in measuring in terms of percentages only in terms of thousands of stocks out of the millions of stocks available in the company. One last remark is about confusing the RSO with the co-founder status, so having an RSO agreement in a four year plan of five percent doesn’t mean that the developer is a co-founder or for that reason you should have crazy expectations because of that percentage. If you are serious about somebody becoming of co-founder status that would be anything beyond fifteen percent, that would constitute a meaningful co-foundership. So that’s pretty much it about incentives. To recap on the five key ways to hire your first developer as a non tech founder, first educate yourself understand the environment, second vet your technical candidate using all the means that we have mentioned, try to hire two developers, either two juniors at a full time capacity or one senior at a part time and one junior at a full time capacity, beware of the character traits of the developer, you know the leadership and communication skills as well as the commitment to what you’re doing and finally incentivise all of your employees in the matter that we’ve just described.

Dimitri [00.44.07]: Awesome! So, if you have any questions about what we discussed tonight feel free to call us on 8663705050 from anywhere or you can email us hello@listenshiprepeat.com, subscribe on iTunes by searching for our podcast, feel free to go in there and drop us some stars or a review

Thanasis [00.44.35]: Please do that!

Dimitri [00.44.41]: Just keep in mind that you don’t have to write a review when you star us, but the more stars we get the more people will be able to discover us.

Thanasis [00.44.47]: It’s our food!

Dimitri [00.44.52]: Last but not least, you can visit our website www.listenshiprepeat.com. Thank you for listening tonight and from both of us, Goodbye!

Thanasis [00.45.03]: Goodbye!