If you have ever been serious about founding a startup company you are probably, like many other founders, most frustrated by the challenge of how to find a programmer to build your startup idea. These days sales, marketing and PR people seem to grow on trees. If you post up an ad to an online job board asking for someone to join your very high risk early stage startup company the odds of getting someone who decent are slim to none. Get your pen and paper, or iPad ready and take a few notes because we have been through this repeatedly and talk to people who have on a very regular basis.
The first part is the hardest part: hunting for a programmer. If you have a friend who is a recruiter then ask them to tell you what they recommend that will not cost anything. Be sure to post your opportunity here. One of the more obvious things that you should take advantage of is LinkedIn. In addition, if you know any developers you should ask them where to post your project or job up and where they recommend you go to meet other developers. Before you go you should read up on the basics of the language that you need a programmer in. For the tech savvy this might include reading an intro book on programming. For the less tech savvy check for a summary and history of the programming language on Wikipedia.
As you start hunting for programmers you need to be thinking several steps ahead to make sure that you find both the right person and someone who isn’t going to overcharge you. For starters, you have to get inside the head of a programmer who might want to work for your startup. This means considering what the opportunity cost for working on a high risk venture is relative to other things they can spend their time on. In addition, you have to consider whether or not someone might just be interested in your project because they want to learn, get experience, or gain insights that they may use for their own startup. To understand what a programmer’s motivation for working on your startup is you can usually get a preview by asking them what they charge by the hour. If they charge well above the market average then they are usually either greedy or motivated to do something on their own that you are basically funding.
You are probably wondering how do I know if they are asking for more than the market rate or not? I only know what they have told me along with what a couple of others I have talked to have told me. The answer to this requires a small amount of research.
How To Calculate Whether A Freelance Web Application Programmer Is Asking For Too Much
Step 1: Use the Indeed.com Salary Tool to Search for Their Job Title By Salary Level. In a search done today, a web developer in Washington, DC should make anywhere from $70,000 to $120,000 per year. This is your wage range for both the market and for this type of job. $70,000 is a bit higher than the entry level wage for a web developer who is also a programmer with a computer science degree from a decent school these days. Don’t be too specific – you do not need to include the programming language, etc. at this stage.
Step 2. Adjust the annual average to what it should be on an hourly basis. The generally accepted hourly wage calculation used by the staffing industry is Annual Salary divided by 2000 Hours. So for someone making $70k that comes out to around $35/hr. For someone making $120,000 that comes out to around $60/hr. You now have an hourly rate range to work with.
Step 3. Consider the burden carried by this individual who may or may not (usually not) have a company of their own to bill you with. If they hire an accountant to help prepare and file their taxes that may cost around $500. If they own a Mac Book Pro that may cost around $1,800 bucks (new). If you sum up these costs and divide them by 2000 Hours then you are looking at $1.15 per hour worth of burden associated with their doing work for you. Add in another $6/hr to cover $12,000 worth of developer conferences and related travel expenses just to be nice. Now you have your burden: $7.15/hr.
With this you have a new rate range for a Washington, DC based programmer of web applications: $42.15-$67.15 per hour.
Step 4: Calculate the difference in rate. For example: if the developer tells you that their rate is $100/hr they are asking you to pay them $40/hr more than the highest wage paid to programmers in the Washington, DC market. Again, take into account that they should have around $7.15 in burden – provided they go to conferences, use their own laptop (not their laptop from their day job), and are incorporated and pay an accountant too). The reality is that there is no good reason for a developer to charge more than the market rate provided they are not in business for themselves full time. This is true in most, but not all cases.
Step 5: Consider whether or not the programming challenge your company is going to tackle involves some special challenges that require a specialized skill or experience set. If this is the case then all bets are off. But then again, you may be better of going out and getting an investor to help you fund your even higher risk venture.
Founders seem to take for granted exactly how in demand a good programmer is. Simultaneously, founders tend to take for granted how in demand bad programmers are too. There is a huge demand for programmers in America – good and bad. Knowing this is half the battle. The old rules of supply and demand should apply in this case, but they don’t. If you talk to enough programmers you start to figure out that they are talking to each other or working off the same set of rules. One will ask for what they know another asks for. This should not stop you from negotiating a reasonable price. With this in mind, a programmer’s experience and skill level should be in line with their price. Take the time to figure out whether the programmer is truly in demand, truly good, or just asking for what they have heard that they can get.
Another option is sweat equity. It is important to realize that most people who are willing to work for sweat equity are not a) the best, b) in demand, and c) going to put their heart and soul into your project. Motivation to work for sweat equity is something else that founders tend to take for granted. Sweat equity is usually best applied in the case where you are working with someone you know who already trusts you and who you know will put up a solid effort. Sweat equity is also applicable for someone who is very interested in the subject that you are working on. What sweat equity is not good for is for people who you don’t know at all. You should avoid spending your time here and instead focus on finding a way to generate revenue or to attract investors so that you can afford to hire someone.
Once the question of compensation is behind you there are a few important things that you should do. The first is to find someone who can help you interview your startup programmer candidate(s). If you know a recruiter you should talk to them and find out what books on the subject they recommend. If you know someone who is an accomplished developer you should ask them what methods they recommend. Even more importantly, you should ask your developer connection to help you come up with a very simple project that would take no more than 2-3 hours to complete for the average programmer. Each programmer should do this with you and potentially your developer friend present to see how they work and to see how they work with you. This last part is optional, but is probably the best predictor of success.
After you get through all of this you should ask for references and check them. People often skip this step because the project isn’t full time but that is a huge mistake.
If you follow these steps and still can’t find what you are looking for then let us know. We’re firstname.lastname@example.org and we will be happy to get you in touch with the right recruiter or user group to talk to for networking purposes.