Hiring Developers for a Startup: Actionable Tips

It's no secret that today most startups rely on digital technology in some way. But many startups don't realize how hard it can be to find talented developers. Why is it so difficult to find good ones? Let’s go over the peculiarities of employing developers at a startup.

August 16, 2022

15 min

Startups

Most modern startups rely on digital technology in one way or another. Sooner or later, you won’t do without qualified developers. And oftentimes, failing to find the appropriate people for the job can result in unwanted consequences.

So how should you approach hiring a developer for a startup to improve the odds of success? Can you go with just one developer, or do you need a whole team? Where do you look for decent specialists, and what are the collaboration options?

This page discusses the most commonly asked questions and shares tips for hiring a software developer at a startup based on our expertise.

Why It’s Hard for Startups to Form Teams

A strong team is the backbone of any startup. These are the people who’ll turn your ideas into a functioning product. But numerous startups have to overcome many challenges to find the right fit, especially when the company is just taking its first steps. And it’s twice as demanding when you try to hire developers for a startup as most qualified specialists are already pursuing careers elsewhere.

What makes it hard for startups to hire people?

The common startup recruitment struggles include:

  • frequent absence of an in-house HR or recruitment department;
  • not enough time or resources for searching for appropriate candidates;
  • tight budgets and lack of social benefits to offer employees;
  • shortage of qualified specialists at appropriate rates (both locally and not);
  • high competition (not all people hurry to consider no-name startups as a workplace, questioning their stability or not having enough trust);
  • retaining the specialists long enough if you’ve managed to get them on board;
  • organizing the teams’ workflows in a constantly shifting environment.

Sounds tough. But the good news is that there are a few “wild cards” a startup can use as leverage. You need to get to the bottom of what may serve as motivation.

What Can Motivate Developers or Other Specialists to Work at a Startup?

Let’s line out the reasons why working in-house at a startup can be tempting for developers or other important company roles when there might be more “stable” and “benefit-loaded” job alternatives at established enterprises. What can outweigh and compensate for the lack of commonly offered sweeteners, higher salaries, or brand recognition?

Why developers want to work for a startup
  • Of course, if a project is innovative and interesting, this can attract talent who is intrigued by the opportunity to take part in creating something truly unique.
  • For less experienced specialists, working at a startup is a way to obtain skills and get career growth opportunities (since startups usually evolve at a fast rate).
  • Whereas specialists with profound experience can be moved by the possibility of equity. Holding a share is solid motivation to participate in delivering something worthwhile. This way, as the startup grows, its shares may grow in value too, bringing employees back significant profit.

Nonetheless, before getting entangled in the employment processes, a startup should figure out whether it needs developers or not and which collaboration path to follow if it does.

Which Startups Need Software Developers?

Is there a single right way to hire programmers for a startup? Evidently, there isn’t. And we won’t go far into details, explaining the obvious: startups differ from one another.

The necessity of forming a development team and how versatile it should be is generally based on the startup’s field, niche, or product. Is it a non-tech product? Or is it a tech startup building an application, communication platform, or maybe a SaaS solution? The technology behind each will vary, predetermining the required talent to create it.  

Plus, the web development team composition will also differ depending on the startup’s stage. The thing is that the needs and goals of an early-stage startup (for instance, one that’s on its way from idea initiation to MVP development) are usually distinct from startups in the growth phase (say, those who’ve already launched a minimum viable product and are searching for ways to scale it).

It all goes down to the needs and specifics:

  • Frankly, a no-code or low-code builder that doesn’t require any tech background might be enough for some startups who are currently only aiming at getting an online presence and aren’t planning to build any innovative tech-based solution (we’re talking simple landings or one-page websites, for example). These options are template-based and quite difficult to scale as you are limited to the provided feature set. If you'll need any unique functionality that makes the project stand out, it makes sense to opt for traditional development.
  • Hence, startups with more complex ideas relying on tech will need to find programmers who’ll accompany the project from idea initiation and proof of concept to MVP creation and further startup scaling.
Keep reading: POC vs Prototype vs MVP: Explaining the Difference

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Which Team Roles Might You Need When Hiring Software Developers for Startups?

In the scenario when technology is a crucial factor, the web development team structure usually includes a standard set of specialists. However, their number and the technical slant (such as specific programming languages used or the tech stack) will vary from project to project and depend on the startup’s stage. I.e., the MVP stage usually includes 3-4 people, while the scaleup stage has 6-8 or more depending on the complexity of the project.

Who is usually part of the team?

  • Project Manager;
  • Tech Lead and/or Software Architect;
  • UX/UI Designer;
  • Front-end developer;
  • Back-end developer;
  • QA Engineer.

What Are the Options for Hiring Developers for Startups?

So what are a startup’s options for getting a team of developers? In simple terms, you can either consider assembling an in-house team or hiring someone remotely. In the second case, there are several IT outsourcing models to choose from. Let’s go over the main paths you can take and note when each is appropriate.

Five ways startups can hire developers

1. Assembling an In-house Team

As it follows from the name, a startup puts in effort to recruit various specialists at its own expense. You’re the one to hunt talent: post job openings on local boards, browse LinkedIn, look for candidates, and hold interviews.

You may have a recruiter or HR onboard responsible for doing this or delegate the matter to one of the team members or an external agency. Either way, the hiring process will require investment. 

Furthermore, when you decide to hire developers for a startup in-house, you have to understand the implications. This is a big commitment as you’ll be issuing payouts not only for salaries. Time off, sick leaves, taxes, computers and software, as well as other obligatory employment expenses have to be taken into account. Plus, management and all the responsibility for coordinating the project is on you.

The bottom line is that hiring in-house is a time and resource-consuming undertaking. What if you need to find five or more people to get the development process going? Do you recall the challenges we mentioned earlier? Hence, this path is reasonable only if you have the required funding and time. Otherwise, you can end up drastically postponing your product launch (and proper time-to-market is crucial for startups).

Learn more: In-house vs Outsourcing Software Development: Overview, Pros and Cons of Each Option

2. Finding Individual Freelancers

You can opt for freelance startup developers. This path supposes turning to platforms like Toptal or Upwork to find individuals to work on your project.

You might cut costs by doing so compared to in-house employment. But things can also get tricky due to the freelancers’ part-time availability and the fact that they may be scattered in different parts of the world. We mean such obstacles as organizing the work processes and actually signing multiple people who won’t abandon you halfway through, thus creating roadblocks in development or causing code maintainability issues.

Hence, since accountability and sustainability should be prioritized, this option is not the best one for startups.

Read more: Why Is It Hard To Find a Good Developer? Freelance vs Outsourcing Comparison 

3. Choosing Team Augmentation

Team augmentation (and the two models described next) implies turning to an IT outsourcing vendor to hire developers for a startup from the vendor’s existing talent pool. You can search for such a partner on GoodFirms or other analogous platforms.

In the team augmentation case, you “borrow” specialists from the IT outsourcing company to fill a gap in your team. This path makes sense if your startup is established, you have an in-house team, and you need one or two specialists (most probably temporarily or just for part-time).

4. Signing a Project-based Contract

This outsourcing model is about turnkey projects you pass on to a third-party outsourcing provider. It assumes that you have a clear plan lined out. You know what you want to create, how to do it (with all the details defined in specifications), and entrust a third party to make it happen without much control on your end. 

For startups, this “fixed-contract” option isn’t always the way to go as, most likely, your project will undergo many changes. You’ll probably be trying to find product-market fit, so the project details are going to be altered multiple times, explaining the need for flexibility.

5. Partnering up with a Dedicated Team

A dedicated team of developers is a decent alternative for startups instead of hiring in-house. This includes scenarios when you don’t have a development team at all or need an additional one for a side project but can’t spare the time or resources on lengthy employment processes. 

With a dedicated partnership, your outsourcing partner assembles a team specifically for your project from its existing staff. This self-managed team becomes part of yours as if you’d employ them internally. They’ll be focused only on what you’re building.

Notably, the dedicated developers will be with your startup the entire way from the project discovery phase to building and scaling your product (no matter how many changes are required as you go). Depending on the agreement terms, you can pay the team by the hour while the provider handles all the employment expenses like taxes and office rent. Plus, the team composition can be altered, so you’re free to add on or cut down the number of specialists based on your needs.

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The Advantages of Hiring Outsourced Developers for Startups

There are multiple reasons why it makes sense to consider outsourcing (particularly dedicated teams) when looking for optimal ways to hire developers for a startup. Here are some of the highlights on the value you can get.

Why should startups choose outsourcing?
  • Accelerated recruitment (you save time on employing qualified specialists and can therefore eliminate this workload, focusing on other important things);
  • Access to expertise (your IT outsourcing provider supplies you with experienced specialists who can deliver quality work and share insights on building your solution optimally);
  • Reduced costs (oftentimes, teaming up with an outsourcing company is cost-effective and can significantly save the budget on development works, and handling budget allocation sensibly is critical for startups);
  • Less employment hassle (the outsourcing partner is the one to handle the employment processes and expenses like paying recruiters, onboarding and upskilling the employees, office rent, taxes, sick leaves, vacations, etc. — you only pay for the completed work);
  • Easier management (the outsourcing vendor forms the best-fit team, taking on a lot of communication and other management matters);
  • Team flexibility (as the project changes, you can modify the team composition);
  • Faster time to market (startups value time, and a ready team of developers can bring back results much quicker);
  • Confidence in the team and the result (signing a contract with a good outsourcing vendor will safeguard you from project abandonment or receiving a product of poor quality, hence, you share the responsibility).

How to Hire Developers for a Startup: Each Process Step Explained

The question of whether to assemble your own team or choose in favor of outsourcing is up to you. It depends on the goals that your startup has set and on your resources.

The message we’re trying to send here is that even if your startup needs developers full-time, outsourcing may be a good option, namely if you go for a dedicated partnership. The reason is that when you turn to an outsourcing vendor, this is the party that handles most of the steps listed below (not you). This can spare a lot of time and resources, allowing your startup to concentrate on more important things like the startup funding process, working on your sales, marketing, or anything else that matters instead of recruitment, team assembly, management, etc.

So what’s the hiring process like? Here are the steps describing how to hire software developers for your startup.

Five steps for startups to hire developers

Step 1: Determine Who You Need to Hire

First things first. What kind of developers or specialists do you need to hire? Shortlist the requirements for your candidates based on the solution you’re planning to build. This includes criteria like the tech stack, the level of seniority and expertise, soft skills, and other qualities you expect. Plus, finalize your budget.

The same applies if you decide to hire an outsourced team. What kind of partnership are you looking for? Does the provider’s location matter, or are you ready to hire remote startup developers?

Plus, outsourcing is the option to go for if you’re in two minds about how to approach your solution in terms of tech optimally. You can gain by killing two birds with one stone: get a consultation about the most time-saving solutions with the best capabilities to achieve what you have in mind and find the people with the necessary background to make it happen.

Step 2: Start Your Search and Hold Interviews

Next, you need to begin your hunt for developers. Your actions will differ if you decide to hire in-house or team up with an outsourcing company.

If you’re going to hire startup developers internally, you can handle the search yourself or delegate these tasks to a third-party recruiter. You may browse LinkedIn or use your local job board sources, but your offer on the openings has to be clear, attractive, and with the motivation “hooks”. Note that this process can take a lot of time. When you’ve shortlisted the CVs, move on to interviewing the candidates. Importantly, for proper assessment, the interviews should be held by someone technically savvy and possibly include a test assignment.

If you’re planning to look for an IT company to partner up with, your search should be based on specific software vendor selection criteria (like your niche and previous similar projects). And don’t be shy to get referrals. Prepare for the communication with the representatives of selected companies by marking your concept, needs, ideas, expectations, budget, and ideal time frames. Then carry on interviewing the candidates that the vendor has specifically selected for your project.

Step 3: Proceed to Hiring Developers for a Startup

When both parties are ready to strike a deal, you move on to the hiring process. For in-house employment, you draw up a contract and handle the legal side to begin your cooperation. 

Partnerships with outsourcing vendors are usually based on Service Level Agreements (SLAs), which record the terms. Oftentimes the fundamental peculiarities regarding the quality of the provided services are included in the principal agreement and the Statement of Work (without separate SLAs).

Step 4: Go Through Onboarding

As you begin work on the project, you’ll need to invest time in giving the developers a rundown on how the processes will be handled. This includes management matters, tools, and other rules. For in-house employees, onboarding can take a month or more. Generally, with outsourced teams, onboarding and integration is much faster and can be covered in a week or so.

Step 5: Assemble a Team

This step varies for in-house and outsourced development teams. In the first case, you need to form a team of newcomers and give them time to adapt, fall into step, and learn to work together. With outsourcing, you usually get a ready-assembled team that already works in harmony, which also visibly accelerates project execution.

But what do you do when the time comes to scale the team or boost its skills? With in-house, you start the whole process all over again. That is looking for, hiring, and onboarding new team members and then training them to upskill their knowledge. Outsourced teams remove such hassle from a startup’s field of responsibility. You sign an additional agreement and get the required talent in a matter of days, giving you the needed flexibility.

8 Tips for Hiring a Software Developer at a Startup

Apart from what was listed above, here are a few pointers worth considering.

More tips for startups hiring developers

1. Be Open About the Value You’re Offering

Remember to be clear when formulating your offer to candidates. This involves not only what you expect from the specialists, but also what you can give in return. Your mission, competitive advantages, flexibility, gaining new skills, growth opportunities, and whatever else that can lure people to apply.

2. Don’t Rush with the Process of Hiring Developers

Above all, if you aren’t focused on creating a tech-based product, you might not need to hire developers for a startup right away. Plan your budget carefully, as quality developers are pricey. Proceed to employment when you actually need the specialist to work on solving existing problems and tasks.

3. Mind the Timing and Stage

Be selective when approaching the employment process of developers. You have to make decisions based on how much the project depends on tech and the startup’s stage. Many startups need a small but flexible development team to create an MVP, and this team can be expanded during scaling.

4. Don’t Skimp on Proper Candidate Evaluation

Be it developers who you want to hire in-house or IT outsourcing vendors, you need to find the right match and be certain that you’re teaming up with professionals. Browse portfolios, look for referrals, give test assignments, ask questions, and don’t be shy to go through several rounds of interviews. The bottom line is that if you hire the wrong candidates, your startup won’t have the time and resources to spare on backpedaling, restructuring, and do-overs.

5. Don’t Be Too Slow with Hiring

You have to find the golden middle, so a hiring process that’s too scrupulous with unneeded rounds of interviews that take months won’t do you good. If you’re too picky, delayed decision-making can make you lag behind your competitors, forcing you to spend extra resources on trying to catch up.

6. Be Realistic About Your Expectations and Think About Value

As you hire developers for a startup, you have to understand that your budget and project progress are interdependent. Prioritize value at all times, even when you’re considering who to take on — one coding guru or two middle specialists instead. So keep your hand on the pulse regarding your timeline and budget.

7. Look for Diligent and Self-Organized Problem-Solvers

You probably won’t want to babysit your employees. Highlight those specialists who are proactive problem solvers capable of working effectively on their own. Ideally, your developers have to be just as eager about delivering value as you are instead of just completing tasks. They should have a voice and not be shy to share ideas and pitch optimal solutions to cut corners and create something truly great. This also aids in strengthening a startup’s company culture.

8. Prioritize Efficient Communication

This is vital at all times, from screening and interviews to onboarding and project work. Try to be clear, open, and use communication sufficiently. Don’t waste time on unnecessary meetups and scheduled calls; hold them when they can make a difference using suitable means and touchpoints.

Over to You

Running a startup is challenging, and finding the right candidates for the team isn’t any easier. But the people behind a startup are its crucial asset, in line with time, funding, and the idea that connects all these dots.

Hiring developers for a startup who are qualified, talented, and have appropriate skills can pose problems; it might be even tougher than raising funds. Every hour and every dollar counts. So you must be certain about who you need on the team, whether the timing is appropriate, and which collaboration model will work best in these circumstances.

Upsilon has ample experience working with startups and a well-versed team of developers who can help get a startup up and running or accelerate it to the next level. We’re always open to communication, so feel free to contact us to discuss your needs!

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