Hired Guns

May 14th, 2009 Chris Posted in Financial, Technology | No Comments »

As I said last week, I’m getting back into software. And to answer the question I got from several of you, I’m not yet disclosing what it is going to do. We’re still a few months away from launch and I don’t want to tip any potential competitors…

One of the biggest fears I had in getting into all of this was the tremendous investment I feared would be required to actually develop the code. I came from the world of big enterprise software where development is slow and expensive.

Not that the developers weren’t fantastic – they were talented and opinionated, very opinionated It’s just that the paradigm was different. Big software releases happened every year or two, had tons of new features, had to run on multiple platforms and had to be bulletproof.

So when I first developed the concept on the app we’re developing, I assumed that it was going to cost a lot to build – originally I assumed at least $50k – $100k. What I soon discovered gave me the encouragement and cash to go ahead with the project…

Two key aspects of our project substantially reduced the development cost:

1. Software as a Service. We wanted to build this app as a service versus the old fashioned download-install-run model. That meant no multiple platform requirements, no installer, etc… All the stuff that adds tremendous cost without value for the customer.

2. Built in Product Manager. We were not looking for a full-service development house that had project managers and extra layers of overhead. I wanted the type of relationship I was used to: me as the product manager and our hired development guns as the development team. That eliminates a lot of overhead cost.

So I did up my specification (more on that in a later post) and went out to collect a couple of bids… And was blown away by how little this was going to cost!

I should note, that I didn’t go off-shore as I wanted to see the white’s of the team’s eyes. I wanted to sit down over a beer and make sure we all understood the requirements. I want to sit down over a coffee and make sure that the schedule is one I can count on. I was worried that remote development would add a bunch of barriers to communication that would counter-act any cost benefits.

In the end, I found a great team right here in Ottawa who gave me an aggressive but credible bid. And we’re off to the races.

Of course, this is software development so schedule and requirements churn is to be anticipated. But because I’ve got the right team and the right price – I know we’ll get there in the end.

In fact, this model is quite liberating. With the barrier to develop so low, the consequences of failure (from a sunk cost perspective) is also quite low. Which means that if one project doesn’t succeed for one reason or another, you can always try again with your next great idea…

Although that won’t be the case for us – this one’s a winner!

C.