Choosing someone new, whether you are just starting or replacing an existing member of your team, is a daunting task. Furthermore, startups thrive in a unique environment which involves unconventional needs for a company. Today we’re discussing how to satisfy those needs—by choosing the right kind of worker.

The question everyone is asking

A few months ago, I mentored a startup that had developed a solid first version with a freelancer. Shortly after, the freelancer got a big contract which in turn reduced his availability. The startup was facing growth, and the founder needed more developing hours. He could afford moving on to someone new, but he had to make an important decision of who to hire: A freelancer? Or an in-house developer?

What’s best for my startup right now?

A lot of startup founders face this decision when looking for someone to bring their idea into a reality. A Web agency would be the regular route. But in hopes of being more cost-effective, most startups want freelancers or employees. In the early stages of a startup, founders usually go for the first option, and rightly so. Freelancers tend to be cheap, fast, and you avoid the hassle of synchronizing an entire team which would take up quite some time.

If we start discussing growth, it’s another story. Startups can afford more and stability should be their priority in this phase. A freelancer will most likely not be able to provide that sense of security. I would personally advice to consider the transition once you reach the $100,000 mark of investments since an in-house developer will provide better control over your product and its evolution.

Is this true for every project?

Not necessarily. Although, purchasing power and development stage are major factors, they aren’t the only ones at play here—complexity and required time also play a big role in this decision. If you’re looking at a fairly simple yet time-consuming project, an in-house developer would be the best choice since paying for a freelancer’s hourly rate would be too expensive. A complex app, on the other hand, requires more expertise, and the more talented and experienced developers tend to freelance.

But managing freelancers is not so easy

Which means you still have to assess your own ability for tech management. If you’re more inclined towards a freelancer, ask yourself this question:

Do I have the skills to manage someone outside my organization, without the advantage of hierarchy? 

Great tech management skills have allowed the creation of virtual startups, InVision being a wonderful example, valued at $200,000,000 with 650 people working from home around the world. However, not everyone can achieve this, and a freelancer-client relationship is very different from a boss-employee situation. Even for new-age, relaxed startup bosses, hierarchy creates greater accountability than other setup.

Make sure everyone is on the same page

Regardless of who you are working with, just make sure they share your vision and are willing to teach others. You should even state explicitly in the contract that they should pass down their knowledge at the end of their involvement. Also try to keep freelance experts around the project, to protect your own interests and to consult when necessary.

Freelander vs employee: What’s the verdict?

It depends… on you—and your startup!

So here are the main factors to pay attention to, and the questions to ask yourself when choosing between a freelancer and an in-house developer:

  • Money: What can I afford?
  • Stage: Do I need flexibility or stability?
  • Time and complexity: How long is this going to take? How difficult will it be?
  • Tech management skills: Do I have the skills to manage someone outside my organization, without the advantage of hierarchy?

Be honest, and above all, think of your startup first. Having expert consultants and being transparent with whomever you hire will help ensure a smooth transition for your startup, and a bigger commitment from the people who make it successful. You are building something great here, everyone in your team should take pride in that.

If you want to learn about this topic more in depth, and improve your tech management skills, check out my free course From Zero to Million Users where I go over how to properly grow your startup, from an idea to a million users.

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