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Should I Use a Dev Shop? - Michael Seibel
5 segments available
Michael Seibel on using development shops to build your startup. Michael is CEO and a Partner at YC. He was the co-founder and CEO of Justin.tv and Socialcam. https://twitter.com/mwseibel Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/
Segments Timeline
The Outsourcing Dilemma
Michael Seibel addresses the common question of whether it's advisable for non-technical founders to outsource their initial product development to a dev shop. He highlights the risks involved, including the tendency to overlook the failures of others who have taken this path, and the potential pitfalls of relying on external developers who may not be as invested in the project's success.
"a common question that we get at YC is is it okay to outsource the development of your initial product the challenge here is that most founders who are not technical think that they have a problem tha..."
Cost and Time Overruns
Seibel discusses the challenges of working with outsourced development shops, emphasizing that the time and cost of building an MVP often exceed expectations. He explains how the lack of motivation from outsourced developers can lead to frustration for founders, especially those with limited funding, as they may find themselves spending more money and time than anticipated.
"I want to share a little bit about what that looks like when you're working with an outsourced dev shop oftentimes it takes longer than you might think to get the first version of the MVP out one beca..."
Investor Perception of Outsourcing
In this segment, Seibel explains how outsourcing development can hinder a startup's ability to raise funds. He notes that many investors prefer to see founders who can build and iterate on their products rather than those who rely on outsourced solutions, which can complicate the fundraising process for startups aiming for rapid growth.
"is that oftentimes in use an outsourced dev shop it's actually harder to raise money because there are a lot of very good tech startup investors who do not want to invest in companies that are outsour..."
The Iteration Trap
Seibel warns about the iteration trap that often accompanies outsourcing. He explains that many times, the work done by outsourced developers may need to be discarded if it doesn't align with the vision of a newly hired developer. This can lead to additional costs and delays, ultimately jeopardizing the startup's chances of success.
"what makes this a trap is that it often doesn't look like a trap in the beginning you often go from nothing being built before you have the dev shop to things happening once you have the dev shop so y..."
The Case for Technical Co-Founders
In the concluding segment, Seibel advocates for the importance of finding a technical co-founder instead of opting for a dev shop. He argues that having a co-founder can lead to faster product releases, lower costs, and a better ability to iterate based on customer feedback, ultimately increasing the chances of startup success.
"technical co-founder so there's kind of a misunderstanding that the early stage investor is actually looking for tons and tons of traction and actually they're looking for like tons of ability to buil..."