This happened during the covid madness in 2020. My co-founder and I were looking to validate a SaaS idea aimed at real estate agencies.
Agencies in Australia are notorious for not adopting tech. The only silver lining about covid was agencies had to become more open to tech. In fact, this agency was really progressive. They understood they needed tech to be more competitive and operationally efficient in these new conditions. They even wanted to bring tech expertise in house. But neither of them had a technical background.
If the common trope is every company will inevitably be a tech company, then every founder will need to be technical enough. I don’t mean be engineers themselves. I mean knowing the basics like “what is a front end”, “what is a backend developer”, “what is hosting”. None of the owners knew these things…
This is a family run business. We hopped on a call with them, a lady in her late 50s and her son in his early 30s. Somehow we got onto the topic of CRMs and they looked a bit sheepish.
“We actually tried to hire someone to build one internally. And I don’t mean hire an agency, I mean we wanted them to come onboard as part of the team, understand the business deeply and build a bespoke solution. We wanted to spin this out into a product and sign up other agencies“.
“So what happened then”. I had a feeling it didn’t end well.
“Well we didn’t realise but this guy wasn’t exactly a developer…he had more of a project management background. He said he’s familiar with software and that he’d get it built. We didn’t think much of it”.
“So…what went wrong?”
“Well the product kept getting delayed and the scope kept getting bigger”. At this stage I was thinking “hold up, you didn’t think to get him to do a test project or literally do anything to prove his experience?”
”Delayed by how much?”
”Close to a year and a half…It must’ve cost us close to $150k… That’s when we decided enough was enough. Turns out the guy was outsourcing this product to 2 other dev agencies in the Phillipines. We were so gutted.
We didn’t visit it after a long time. It was only after my son started playing around with Zapier. We managed to build a good chunk of the functionality ourselves. I think it’s at a stage where it’s good enough for us. We might approach bringing someone in house again but this time it will be different. My son will be intimately involved with the product development.”
Stories like this are more common than you think yet you can avoid disasters like this in a few ways:
- Have a base level understanding of technology. Google jargon you don’t know. Youtube a day in the life of a developer so you understand wtf they do. It’s about having “conversational understanding”. Be knowledgable enough so devs cant bullshit you. Then you won’t resort to “i’m not technical enough”.
- Have a technical friend to do a sniff test of the work. If that’s not possible, be intimately involved with the product development. Daily demos and updates go a long way to mitigate any hiccups. Don’t just treat technical talent as a black box.
- Get them to build a mini app or show any proof of technical ability. Be reasonable with this obviously. Don’t get them to just work for free. Time box a 10 hour project and pay them contractor rates. Trial before you buy. Date before you wed.
It always sucks hearing stories of founders losing money and time on such blunders. Luckily, the cost and effort to mitigate is trivial.
Hopefully in the future basic technical knowledge just becomes a pillar of entrepreneurship similar to sales, marketing and finance knowledge.
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