3. Virtual Location, Location, Location
(Part 3 of a 5 part series: "So, you need to develop a product?")
Good engineers are hard to find. In today's highly competitive job marketplace, it is becoming increasingly more difficult. My solution: cast a wider net. Focus on the best talent, regardless of their location.
I've built development teams in Chicago, Los Angeles, Silicon Valley and India. I've also hired engineers scattered in random locations around the world. I've built companies and teams where 100% of the development team was located at the company headquarters and other companies where none of the developers were at headquarters. I've realized that it doesn't really matter where they are, if they are the right people. There are many pros and cons to having your engineering team outside of the company headquarters (and/or in multiple locations), but I think the pros end up balancing out the cons. The main benefit to having your engineering team all in one place, at the company headquarters, is certainly communication. The con is that the developers can become 'tainted' or distracted by all the other business happenings and it can skew their thinking and creativity.
There are also geographical workforce talent pool advantages and disadvantages. Chicago was the easiest place to find engineers; they were cost efficient, hard working and very loyal. Los Angeles was a bit more difficult to find engineers; they were the most creative but more expensive than Chicago. Silicon Valley has a lot of engineers with a lot of experience, but also lot of competition, which makes it the most expensive place to hire engineers and loyalty can be a challenge. I will talk more about outsourcing in point #5, but India has terrific intellectual capital, is less expensive (however, costs have been quickly rising), but, it is very difficult to find "Scrappy" engineers (see point #1) and communication can also be a challenge.
At StrongMail Systems (Startup 5.0), our first three developers were in India. It was a challenge in the beginning, but ultimately, I attribute much of our success to making the model work. We started with three extremely talented, creative and innovative engineers. They were able to attract other talented engineers in India as we grew. There were many communication challenges in the beginning, but once we overcame them, we were able to leverage a full 24 hour development cycle between the U.S. and India and, as a result, we were able to develop product much faster than the competition. At L90 (Startup 3.0), our engineering team was based primarily in Chicago while our headquarters was in Los Angeles. As we evolved our business plan and tweaked our marketing messaging, our engineering team was shielded from a lot of the distraction (being in a different location, they didn't get sucked into the "water cooler" conversation or hallway chatter) and they always remained 100% focused on building innovative products driven by customer need. Of all of my companies, communication was probably the strongest at L90, even though the engineering and design team were completely separated from sales, marketing, business development and customer service.
Focus on the best people, not the best location... By casting a wider net, you can find better talent, better manage your costs and gain many other tangible and intangible benefits (e.g. loyalty, development and support expanded across multiple time zones, multiple geographical talent pools for growth, new and fresh perspectives, etc.) Fortunately, we live in a world where virtual locations are not only possible, but advantageous.
Next... Build a SWAT team (Part 4 of a 5 part series: "So, you need to develop a product?")
Good engineers are hard to find. In today's highly competitive job marketplace, it is becoming increasingly more difficult. My solution: cast a wider net. Focus on the best talent, regardless of their location.
I've built development teams in Chicago, Los Angeles, Silicon Valley and India. I've also hired engineers scattered in random locations around the world. I've built companies and teams where 100% of the development team was located at the company headquarters and other companies where none of the developers were at headquarters. I've realized that it doesn't really matter where they are, if they are the right people. There are many pros and cons to having your engineering team outside of the company headquarters (and/or in multiple locations), but I think the pros end up balancing out the cons. The main benefit to having your engineering team all in one place, at the company headquarters, is certainly communication. The con is that the developers can become 'tainted' or distracted by all the other business happenings and it can skew their thinking and creativity.
There are also geographical workforce talent pool advantages and disadvantages. Chicago was the easiest place to find engineers; they were cost efficient, hard working and very loyal. Los Angeles was a bit more difficult to find engineers; they were the most creative but more expensive than Chicago. Silicon Valley has a lot of engineers with a lot of experience, but also lot of competition, which makes it the most expensive place to hire engineers and loyalty can be a challenge. I will talk more about outsourcing in point #5, but India has terrific intellectual capital, is less expensive (however, costs have been quickly rising), but, it is very difficult to find "Scrappy" engineers (see point #1) and communication can also be a challenge.
At StrongMail Systems (Startup 5.0), our first three developers were in India. It was a challenge in the beginning, but ultimately, I attribute much of our success to making the model work. We started with three extremely talented, creative and innovative engineers. They were able to attract other talented engineers in India as we grew. There were many communication challenges in the beginning, but once we overcame them, we were able to leverage a full 24 hour development cycle between the U.S. and India and, as a result, we were able to develop product much faster than the competition. At L90 (Startup 3.0), our engineering team was based primarily in Chicago while our headquarters was in Los Angeles. As we evolved our business plan and tweaked our marketing messaging, our engineering team was shielded from a lot of the distraction (being in a different location, they didn't get sucked into the "water cooler" conversation or hallway chatter) and they always remained 100% focused on building innovative products driven by customer need. Of all of my companies, communication was probably the strongest at L90, even though the engineering and design team were completely separated from sales, marketing, business development and customer service.
Focus on the best people, not the best location... By casting a wider net, you can find better talent, better manage your costs and gain many other tangible and intangible benefits (e.g. loyalty, development and support expanded across multiple time zones, multiple geographical talent pools for growth, new and fresh perspectives, etc.) Fortunately, we live in a world where virtual locations are not only possible, but advantageous.
Next... Build a SWAT team (Part 4 of a 5 part series: "So, you need to develop a product?")
Labels: hiring, L90, product development, StrongMail, team building
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Hi Frank,
I couldn't agree more with your advice. I am a serial entrepreneur who has built two engineering teams from scratch. Hiring talented engineers in competitive markets has always been difficult, sometimes taking 3-6 months to find the right people.
I was always reluctant to try remote working relationships until my last company's circumstances forced us to cast a wider net beyond the Bay Area. We ended up hiring an engineer in China through oDesk (http://www.odesk.com) to develop our application (http://www.yorz.com) - Full disclosure: I now work at oDesk. YorZ's relationship with our provider in China has been a really productive and positive one, going on six months now. A combination of picking the right person and using good collaboration tools (we use the tools integrated in oDesk) has made managing our remote engineer as easy as managing a local team member.
Posted by
Brian Goler |
10:04 PM
Great post Frank.
A Robert Half Technology Study of CIOs says it takes over 55 days to fill a staff position and over 85 to fill a software manager position. Clearly this is too much time in any ambitious start-up (and doesn't begin to account for the opportunity cost of the hiring process). Successful ventures use partners to speed up their development and reduce the costs of development.
Thanks for another great post
Posted by
Amish |
4:02 PM