From fear of failure, fear of losing a stable income, work-life balance concerns and more, many factors can hold someone back from starting their own business.

However, one recurring reason I noticed was the lack of CTO or programming skills holding those with a business idea back. This is probably why so many Facebook groups and community events exist to help people meet their co-founders, and even incubators like Antler have popped up to help with the problem.

Having someone who codes is so critical to the success of your startup. That is why so often, we hear VCs say they need to see the Hustler, the Hacker and the Hipster before investing.

As a group expert for the Facebook group Business Questions Answered for Entrepreneurs & Startups: Singapore by Sleek.sg, very often, I see entrepreneurs or aspiring entrepreneurs posting questions about how to go about starting the tech side of the business or finding the right help to do so.

I was invited to the group to touch on finance and loan topics mainly. However, as someone who doesn’t code but still managed to build a fairly technically complex loan marketplace, I thought sharing my experience could be helpful after seeing three members asking about this subject this week alone. Disclaimer: I did do a term of coding while in poly but that was two decades ago and I had largely returned everything to the lecturer.

Very often to start a tech business, the following three options are available to someone who doesn’t code:

Get a CTO
Engage a web agency or freelancer
Hire someone either remotely or locally

As someone who has tried all three options, here are my experiences followed by some of the trade-offs between each route, and 10 tips that I hope will help you in ensuring the delivery of your project.

Web agency or freelancer

Hiring a web agency or freelancer seems to be the most common route, especially for those with little financial resources and who come upon a business idea by themselves instead of with a group of friends with one who happens to code.

But after taking this route and spending over one year with little to show for it, I began talking to other friends who also took it. That was when I noticed something no one had written about — a failure rate of 10 out of 10!

First of all, I don’t mean that everyone I spoke to failed to produce the app or website that they wanted by engaging a web agency. However, they had to change firm and had at least one dispute or non-delivery before they got it built. I myself changed three agencies before I started digging more into the subject and asking around, with one friend changing seven before something that even barely resembled what he had envisioned was finally made. While it was a small group and hardly statistically representative, still a 10 out of 10 ratio should warrant anyone considering this route to want to understand what it means better.

Also, it is not as simple as just hiring, delivering, paying, starting the business and underestimating what it means to engage a firm. For some, the repeated failure could even cause them to run out of funds or time and they had to give up eventually.

Here is why it can be so problematic. When you want to build an app or a website, you need to know it is not one thing but layers of many things such as the choice of programming stack frontend and backend, APIs, and UXUI.

Also Read: Why finding your co-founder is a lot like meeting your soulmate

In any area, there are tons of places where there can be corner-cutting, miscommunications, and prioritising quantity and speed over quality that when they come together, it just wouldn’t work. Let me use an analogy of building a house to illustrate it further.

Even if someone built something that looks identical for you, what construction techniques were used? What materials were used? Any fire and safety procedures? Just because it looked like what you wanted on paper doesn’t mean you can live in it safely.

Take just the material used. Okay, you know enough to ask for steel but then what sort of steel and how was the quality of the material used? Depending on how tech-based your startup is, there can be so many things that one without a tech background wouldn’t even know what matters and what to look out for.

I have many friends who run web agencies and while not their clients directly knowing them and understanding what they do, I believe they delivered many quality projects. So identifying the gems among the many agencies can be an art.

I’m not trying to put any industry down. But if you think about it mathematically on average, the number of people that is above average cannot be higher than those that are below average. So If you have a 50 per cent chance of meeting the right firm, then factor in that even established firms like banks and scale-ups do outsource their projects from time to time, and with their highly technical and competent people having the skills to pick and meet the right firms, you are more likely than not to meet the wrong firm.

That is also why I’m trying to disrupt my industry and take the unprofessional loan brokers out of the equation after hearing the horrible things that they have done. While there is AI, I don’t think developers will be disrupted anytime soon. Sure, it can help you write some small snippets of code but it is unlikely for a non-coder to put everything together unless you are building something really small, and in such case, choosing the right firm would be less critical anyway.

Hiring in-house

So what about hiring in-house whether it’s local or remote?

Fundamentally, agencies want to serve as many clients as they can and complete as many projects as possible. That way, they can earn more in a month and that is something that will certainly encourage corner-cutting, miscommunications, prioritising quantity and speed over quality.

In theory, a staff will think long-term as they are incentivised differently. But how do you assess the right skills and chemistry as a non-tech person? Without any technical background, it can also be a challenge to communicate exactly what you want to him or her and vice versa.

CTO

So, naturally just having a CTO is something many people lean towards. However, it is not going to magically solve the problem. You may have someone you trust, but unless you have worked together before, you just wouldn’t know what problems would pop up. Also, with dozens of programming languages available and many areas to look at, most startups probably wouldn’t be able to afford a CTO well-versed in all your programming needs. And if he or she is so competent, then why you and your idea?

Additionally, if the project is not small, he/she might be unable to code it by himself/herself. He/she is more likely to be a project manager than a CTO whose role includes R&D to stay ahead of technological trends and drive innovation within the company, as well as development and implementation of new technologies and systems to ensure they align with the company’s business goals — something that might be too strategic when you have more pressing tactical needs.

If all of the above seems like they can come with problems, does it mean you cannot start a tech startup unless you know how to code yourself?

Of course not. If I can do it, so could you.

As the saying goes, good and fast cannot be cheap, cheap and fast cannot be good, and cheap and good cannot be fast. For each, there are trade-offs and no one route is better than the other without factoring the internal needs and circumstances. I hope that helping you understand what the trade-offs are for each will help you better pick the path that works best for you, as well as help you anticipate the challenge ahead.

“If you think hiring a professional is expensive, wait till you hire an amateur,” Red Adair.

Also, it is only natural to kiss a few frogs before you meet your prince. So do not be deterred about going with the wrong route but rather, examine what went wrong and what you can improve on. Otherwise, why do some companies have 7 rounds of interviews and still no HR can ensure a 100 per cent fit and cannot do away with the probation period? Just because one of the above paths has failed you, doesn’t mean it doesn’t work. But reflect and adjust your plan.

Also Read: Startup funding in SEA declined 68% to US$129M in July: Tracxn

This is how I would summarise the pros and cons of the three options: cost vs speed vs risk.

CTO: The cost for a CTO is the highest in the long term. If the company succeeds, the equity you gave up will cost more than hiring but your upfront cost is lower. However, if you have someone capable, it can greatly reduce the risk of a project failure and the time needed. Using vesting agreements with a cliff period can help reduce your risk of getting stuck with someone who might not be a long-term match.
Hiring: The cost of this route will be the highest upfront. If you do not have a good interview process and have to replace the candidate, your cost and timeline are going to increase as well. However, if you make a good hire, your speed and risk should be lower than a web agency’s. But even if you are experienced in hiring and managing people, without a tech background, you may find hiring and managing a tech person to be very different.
Web agencies: This is usually the cheapest, especially if you are tapping on firms in developing countries. But as mentioned earlier, many things can go wrong, and your odds of picking the wrong firm are more likely than the right firm, therefore the risk is the highest. Having to work with someone from a different culture may add to the risk due to miscommunication.

Speed-wise, it can be rather polarising. If you have to change firms, you will face delays in your project. A medium to large firm may cost more than a smaller firm, but will have worked on many projects and has employees who are familiar with the various programming languages, stacks and areas.

This means employees assigned to your project can tap on their colleagues for help. If you can find the right firm, you will find this route to be the fastest for you. A good firm will also require less managing on your end, allowing you to focus on other aspects of the business.

That doesn’t mean you shouldn’t consider smaller firms. A smaller but highly resourceful firm can tap into their network for help. A custom-built project will still involve using many third-party tools and APIs. For instance, we use reconciliation tools to inform the system when we receive payments from our lenders so that the system can pay our referrers right away. If someone hasn’t integrated something similar but has a colleague who has done so to assist, that will shave off tens of per cent of the time required for it. Add dozens of integrations and that could mean weeks to months faster overall.

Likewise for hiring. Even if someone claims to be full-stack, usually he/she is stronger at either front-end or back-end and that is just spitting the many areas and layers of a website into two large categories. If he is resourceful, that will mean less time taken to figure things out.

Here are some tips that I hope could help you with choosing the right agency/freelancer and ensure the development goes as smoothly as possible.

Don’t bother about reviews. Too often, I hear people rely on them. Unless someone is the worst of the worst, he/she would have still delivered a successful project for a client and got a good review. If you want to use reviews as a guide, you should read 3rd-party reviews from websites like clutch.com.
Talk to some of their past clients, about why they chose them, and relying on their judgements, especially if they are more experienced- could help too. The more time you invest upfront to filter out the wrong agencies, the greater the risk you can reduce for yourself.
When hiring in-house, getting a technical friend to help you do some technical tests on the candidate could increase your odds of hiring someone with the right skills. While I believe you don’t always need a tech cofounder, it pays to build allies with some. For example, I mentored a CTO turned prop-tech founder who is strong in AWS deployment and I was lucky to be able to point my developers to my friend for assistance. The right fit is subjective. Sometimes, it could be you that is the problem. Making an effort to learn some programming aspects could help you to navigate your product’s journey smoothly. Understanding the various components that go into it will also let you better understand the time, effort, and cost that go into it so you can factor that into your business plan, as well as allow you to communicate with your programmers more easily.
Owning as many things as possible directly under your name will make it harder for them to hold you ransom. Even if they don’t go as far as doing so, the more you rely on them, the easier it is for them to lure you in with a low price but jack up the pricing as time passes. However, once they have proven themselves, I think it is okay to raise the price a little. In that sense, they are just reducing the initial cost to make it easier for you to decide to go with them. But if it jumps by multiple times, that feels more like a clickbait and they are just luring you in. Speaking of clickbait, here’s another article about clickbaits in other industries. Owning under your name also allows you to switch providers and agencies more easily without having to start from scratch.

Some of the things you should own or set up under your name:

Your domain: E.g FindTheLoan.com. Purchase it yourself and grant them the right to manage it.
Github: This is where all your codes sit. They should push their codes to your account and you should back it up from time to time to prevent them from threatening to wipe everything.
If you use any third party APIs (for example, we use Google map API to help anyone applying for renovation loans etc to auto-complete their address, some OCR solutions to extract certain information from uploaded documents to reduce manual form filling), those sign-ups should be in your name too. Otherwise, they will still have the ability to disrupt the smooth working of your website.

If you are finding developers from websites like freelancer.com or Upwork.com, ensure to use the escrow feature. Once, an agency had non-delivery but accused me of non-payment. The fact that they threatened to wipe everything and tried to hold me for ransom made it easy for the platform to rule in my favour.
Have everything in black and white. If things are discussed in a meeting, have them send a summary of the key points, agreed-upon deliverables and timeline. This will protect you in the event of a dispute, as well as make it easier for you to bring on another firm when they can easily understand what’s been built, and how it’s being built and jump into the project from where it was left off.
For larger agencies, note that the actual project manager and the salesperson pitching to you are often not the same person. So no matter how much you like the salesperson, it probably doesn’t matter. If he or she has overpromised, the project manager is stuck between you and the salesperson.
Break things down into as many milestones as you can. That way, you don’t have to wait months to realise something is wrong.
Never pay upfront. I think a lot of agencies are going to hate me for this. To be fair, this would mean vice versa: if they meet a bad client, they are the one at risk. Thus, my suggestion is to make the first few milestones smaller and correspond them to the payment, such as five per cent, 10 per cent, then 20 per cent and progressively increase it, until both sides can trust each other better to take the next milestone together.
Whatever timeline they promised you, double it or more, especially if you have other operational areas that depend on certain milestones of your project being made before you can work on it.

Unless your project is small and you are building very common features, it can be very hard to determine how long it will take exactly to build a feature and then fit it into the existing codes without bugs or conflicts. They might not be trying to overpromise you but at times, it’s just hard to pinpoint where problems may arise when codes come together, especially for projects where multiple developers are working on it concurrently.

Just like everyone will write this article differently, everyone will write their codes differently. If I had split this article between three people to write different parts of it, chances are it would have been harder to gel them into one article without having to amend a lot of things.

Bonus tips

I had people asking me to learn coding after I lamented to them the challenges I faced. This to me is the most stupid advice ever. As a startup founder, while getting the product out is the key thing now, there are many other challenges you will face along the way as the company grows, and new areas you will need to look into. So are you going to get a CFA, an HR & SEO certification and pass the bar as well?

Learn just enough to be dangerous. As a founder, I believe that knowing how to assess and convince the right candidate is probably one of the most important skills to have. However, knowing some aspects of an operational area would not just help you communicate with your employees better, but also understand their challenges, making you a better employer to work with.

So, don’t learn to code unless you have a passion for it. But, at least understand the various components that need to go into producing the product you want. Spending a few days to read up on what front-end and back-end, APIs, UXUI, hosting, servers, syntax, and logic mean will allow you to communicate with your programmers more easily too.

Spending a few days to learn what a Scope Of Work is, Wireframe and how to prepare one, would also reduce the disputes you have with agencies and freelancers, as well as communicating with any employees what you hope to build.

—

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join us on Instagram, Facebook, X, and LinkedIn to stay connected.

Image credit: Canva Pro

The post How to build a tech startup without a CTO – From a founder without a CTO & no programming skills appeared first on e27.