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Re: [newtech-1] why NYC startups can't hire

From: Peter B.
Sent on: Thursday, December 16, 2010 9:25 AM
Just what Andy said :) 

Right now I'm doing occasional process consulting and coding on a $350k green-field rewrite for a dating site. I started off 40 hours a week (2 weeks onsite in SoCal, then remote), brought in and coached a team, brought in and handed over to a team lead and rolled off over a 6 month period. I am doing a 20 hour a week 4-5 week "jump start" engagement to knock out functionality and hand it over to an in house team for another startup, I'm doing 3-4 hours a week of debugging and code review for a client I did a jump start for last month and I also have a handful of small e-commerce and cms systems on the go. 

Generally rates depend on substantiality of engagement and occasionally on how cool it is (yes I'd give someone a break on the hourly if they wanted a Scala/Lift/Mongo setup or Clojure with Cassandra) but most often $125-$175/hr.

To be fair, I think you can get solid developers for numbers lower than those Andy or I are mentioning. And sometimes those developers are just as good. But most of the time they aren't, and I generally find that less expensive developers end up costing more money by making less good architectural decisions.

Best Wishes,
Peter

On Dec 16, 2010, at 3:40 AM, Andy wrote:

Not necessarily.

As a consulting CTO myself, I've charged a higher hourly for up-front assessments, a daily rate for the initial on-site stuff, and a long-term lower rate for the remainder of the contract, once we've established parameters and goals. I have a stealth-mode client who has me on-retainer now at a long-term rate that is 75% of the initial hourly I charged.

The most ideal form of billing for both the consultant and client is value-based, (one flat figure for given goals/milestones to be reached) but this is one of the hardest scenarios, I think, to put a hard number around, unless you're a serial entrepreneur -- you've done it before and have some real idea of where things are going and what it will take to get things done. Otherwise, you're still defining your vocabulary and processes, and even your mental model, and it makes it much harder to spec things out.

You could be paying $150-$250/hour for CTOs with tech chops (from architecture up top to coding down low, and including the other activities like build systems & etc. that Peter mentions above) and decent connections/networking/people skills. You might get a daily rate from $1000 to $1500 on that class. You might be able to negotiate a weekly or monthly rate, depending on the nature and length of commitment.

--ab


On Thu, Dec 16, 2010 at 3:24 AM, Philippe Cohen <[address removed]> wrote:
And how expensive would such a person be? I am assuming a hourly rate would apply, right?

Le 15 d?c. 2010 ? 16:17, Andy <[address removed]> a ?crit :

also, another option here is to bring in a consulting CTO who gets paid to oversee product development early on, but little to no equity, who then builds your in-house team that takes you through until you can hire the right permanent CTO.


On Wed, Dec 15, 2010 at 4:10 PM, Andrew Badera <[address removed]> wrote:
we've debated that here quite a bit before. it's risky to outsource your product, your core competency. outsourcers are never going to be as agile as a fulltime, committed team.

but that said, sometimes you don't have a choice. I'd rather have a fully qualified, professional outsourcer develop my prototype than some shady guy or hack I met through my mom's friend's uncle's vet's disabled mom's kidney dialysis appointment scheduler.




On Wed, Dec 15, 2010 at 4:02 PM, Philippe Cohen <[address removed]> wrote:
Thanks, very informative.

In your opinion, what are the pros and cons to have a demo/v1 developed by a lead developer vs freelancers (found on elance, vworker, odesk, etc.), before finding a true co-founding CTO ?


On Wed, Dec 15, 2010 at 3:46 PM, Andy <[address removed]> wrote:
if you bring on a CTO after first round funding, they had better be a worthwhile CTO.

if you bring someone on pre-funding who grows with the company, salary may vary a bit more post-funding, but of course equity is higher.

in the end, you pay someone what they're worth, so hopefully you're bringing on someone worthwhile to begin with.

if you're bringing investment in to begin with, if you're paying someone to be more of a lead dev than a co-founding CTO, that's also a different story. if you're paying someone 2-3k/month, and you're paying other expenses out of pocket and they are not, and they're really just a dev with a lot of influence on the product, but not a true CTO, 1-3% might be fair.



On Wed, Dec 15, 2010 at 3:35 PM, Philippe Cohen <[address removed]> wrote:
I assume 160k+ is for competent/experienced dev, right ? Or does that also apply to dev with 2-4 years of experience?

Let's try this pre-funding scenario:
- the non tech guy brings the biz model, accounting/legal services, funding  of 10-20K, works full time on developing the business, does not get any salary until revenues come in
- the techie works full time, gets 2-3K a month at the beginning

What would be fair according to you?

2010/12/15 Andy <[address removed]>
varies hugely, but important question: what's the state of your funding and revenue? both at 0?

post-funding, first round, you're talking 160k+ salary, as well as 3-6%.

pre-funding, you could be giving up as much as 50% with 0 salary.

--ab

On Wed, Dec 15, 2010 at 3:03 PM, Philippe Cohen <[address removed]> wrote:
Speaking of which -

What type of arrangement is generally considered acceptable/fair, to hire a full time CTO partner in a new venture ? What combination of salary/equity ? I am sure each situation is different, but I am looking at general trends for the alliance of 2-3 persons at an early stage.

2010/12/15 Jonathan Vanasco <[address removed]>

On Dec 15, 2010, at 10:41 AM, Jijoy wrote:


i'd add :

- because many want you to work for free 
- because the rest want you to work for 1/3-1/4 market rate in exchange for equity, not 1/2 like other places.  ( sorry, offering 30-50k in nyc , when a market position is[masked] = insulting )
- and because corporate places want to shower you in cash and benefits

- because most startups in nyc are run by douchebags that have no idea what they're talking about
- because the bulk of the rest of the startups in nyc are run by douchebags that have some idea what they're talking about , but you can't get over the fact that the CEO/CMO/CxO is a complete fucking douchebag and you want to punch him in the face

oh man, i could go on.

btw, I'm LOVING working in the corporate world. 





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