Startups

Not all agencies are created equal, you need to mine through to find the good ones.

Both Leigh and I have instructed Agencies to build MVPs (not the full platform just the essentials).

Another Sydney based non-tech founder worked with a Google project manager on a wordpress website which ended up having over 50 plugins (selected by the project manager), a complete write-off. 

I worked with a Sydney based agency at Pyrmont and one operating in India via Upwork which was set up to fail from the start as I had no skills in managing developers.   Upwork Indian developers advised buying a clone script from Agriya and then to customised the code – a poor decision on both framework and IT architecture. 

To save us both time in a very sad fail and the lesson I’ve learned since – I’ve never known anyone to launch an MVP to market out of India.   

I’ve only heard of Indian developers doing very tiny pieces of an overall project and they need to be micromanaged to the point you may as well learn to code and do it yourself.     If you have the skill and you know what to look for and you understand Indian culture very well then outsourcing to India is a good idea. 

Developers, there are like a bricklayer in India, everyone is one but not everyone can develop – too much micromanagement of Indian developers will make even a saint lose their shit.

As a non-tech founder, if you are thinking about outsourcing, I would say take your chances with developers operating out of Eastern Europe, Russia or Ukraine.

Their standards are high and they’re outcome focused meaning they don’t mess around, they tell it to you straight and get on with the project.   I have no dealings with freelancers or developers in the US, UK or any other outsourced area except Ukraine and India.

With my Sydney based Agency, I dealt directly with the founder/ CEO who I picked solely on the premise that he believed in my vision.   This is what I mean about not getting sold too.    His family is supposedly connected to Agribusiness in a target market where my MVP would be tested.   So, I felt and he represented to me that he had a vested interest beyond delivery of the MVP.     I felt confident that if they were going to market with me, then they wouldn’t build an MVP that was too hard to run because essentially they would be helping me run it! 

Keep in mind that many agencies are there to make money and not to create agile, scalable websites or apps for entrepreneurs.  

Find an IT architecture designer or an IT mentor who will be with you throughout the entire agency dealing.  

Understand that whatever they build for your MVP, you will end up managing.    

No agency is that keen to keep going with an entrepreneur after MVP build because normally they want agile products and those who have not tested the market and built to that market normally are learning too.

Whatever is in the scope at the beginning is what you will get!

This means you need to know the exact problem you are solving because your MVP could end up hardcoded, non-agile and/or extremely expensive to support or run (like mine was!). 

I sound like it’s doom and gloom but in some part, I was much luckier this time than the India fail.   The Agency delivered a beautiful UX design but left me with no documentation and a UI and backend only a mother could love.   

It’s a Drupal framework and some sections are hardcoded from a theme called Radix.   Two audits revealed that some parts of the site conflicts with the Drupal framework.   Unfortunately, that included security updates which if you’ve ever run a marketplace you’ll understand that your user’s security is so important to the integrity of the business that without security updates working you may as well start again.

This is what the Sydney based Agency owner said to me when we parted ways:

We’ve moved on to bigger and better things

Sydney Based Agency Founder

So many people have said why don’t you get your money back or sue but frankly with little documentation and nothing in the market it’s difficult to pursue an agency or development company and the contract amount isn’t enough to use a lawyer.

I can’t see how an agency operating in the Sydney startup scene and treating people like this could last longer than a couple of years more.   It’s not worth my time or money or effort when they will just move on to the next until they run out.

You too should think about this.    Because employing lawyers is expensive and if the agency doesn’t have any money then you are wasting your time and money.

Not every agency in Sydney is like this but I wanted to make a point to the non-tech founder to invest the time, research talk to other people in the startup scene who have actually built technology businesses. 

Operators like Christie Whitehill from Hatching Lab, who have been around the startup scene for around 7-8 years, are actually genuinely interested in helping start-ups succeed and they love what they do.

Christie is also an advocate for women interested in getting into start-ups.     She’s helping non-tech founders get tech start-up ready and build their first MVP via Tech Ready Program

Christie is always free for a chat and she’s helped me to no end mentoring from the first tech fail (despite me not using her agency for the work!). 

This leads me to……..

Scope Creep / Project Delays / Quoting

Why is the development taking so long, when are you going to finish?

Said
Too many Founders

This is the question you will ask over, and over, and over again…….if don’t have some control and transparency over the process.    

The difference between a developer/agency who delivers delays and those who deliver an end product is simply down to skill and experience and YOU. 

After my fail in India, I tendered to three different Sydney-based agencies.   All came in at around the same ballpark price-wise for my MVP.   I didn’t pick based on the quote I picked based on the agency owner’s interest in the project and I naïvely trusted.

I can’t really give you any concrete advice on scope creep, but to say, that with development it’s almost a guarantee that your project will take longer, cost more money than you expected. 

You need to take this into consideration. 

Add at least 20% to 30% into both cost and time (delays to your project) and spend the time elsewhere like building the market via email campaign or landing pages. 

A good development team will want to get you to market because they will want to see their work in action.

What To Do If They Say We Won’t Release The Source Code Until You Pay

My agency had no terms and conditions (they don’t even have them on their own website) nor did they have warranties, Github or other code repositories (they outsourced to Brazil and Nepal) and it appeared they had no set project management system or if they did they didn’t share it with me.

My agency project manager (who has since left the agency) told me that:

“It’s industry standards that no source code be released until final payment”

WRONG.

This is a common tactic used by developers, programmers and agencies who have little to no warranty on any of their work and/or they have no intention of helping you to get to market.

If they withhold your source code and refuse to hand it over until payment that’s a red flag and it’s something you don’t need to do.

Find an independent company to upload the code to a repository, audit the site, if you are happy then pay.   Mine said they would fit all bug issues with the site for 3 months.      

I had a colleague review the site and we pointed out that entire sections hard coded and it clashed with the framework – they stopped taking my calls.

Also get all documentation first before paying any money and if they don’t have a Github (or another repository transparent project management system) don’t do business with them.

An Imbalance in the Power Dynamics Such As Withholding Source Code Until Payment Is Illegal

If this happens to you in Australia and you’ve entered into a Terms of Service point out that it is illegal under the Australian Consumer Law to withhold information from clients or behave in a way which is threatening or changes  balance of power in the relationship.

Not only is this a big indicator that they don’t know what they are doing it’s also very frustrating because you know now that whatever they hand over will be littered with bugs or a big stuff up by the agency or developer which they want to hide from you until you ‘own the source code’.

If this happens to you contact a reputable lawyer (try Law Path), draft a new contract with the Agency stipulating that you will pay their final bill upon a code review and outline that deployment will be managed professionally.

This means total transparency in deployment methods and access to the deployed area and that along with the source code they will also hand over ALL documentation. 

Leigh and I have both been here.

At times I’ve felt backed into a corner and didn’t realise that what they were doing was illegal.

As a business relying on a product like a website to make money you can feel like you have no choice – but you do and you have time (more than you think).

We both didn’t cover ourselves properly and there are no excuses, however, when you work with professionals for years you do become complacent because the standards of operating are clear and there are very clear courses of action. 

I know every single developer and agency will roll their eyes at this one because everyone wants to work in an environment where there are no rules, laws, where everyone just has FUN every day and work in a place with a ping-pong table and bean bags.

But let’s face it not everyone in start-ups is Google and most of us don’t have cash lying around waiting to spend on ping-pong tables.

Entrepreneurs want to get to market and test and validate.

Developers and Agencies just want their money and if they don’t see that your idea has legs expect them to cut and run so protect yourself.

Warning signs for agencies. 

Unprofessional

Consistently Late To Meetings 

If you are turning up to meetings late (without a good explanation) it’s a big sign that you don’t respect the other person – at all.

My Agency’s founder and CEO constantly turned up late between 40 minutes to 1 hour late.

No return calls meant I had to chase them around and contact them after hours and sometimes even on a Friday and when I did they were out getting pissed on my money and time.   Not good.

You can laugh but the fact is that these type of businesses might make it for a quick burn and churn time but long-term they will be a flash in the pan and who wants to invest in that? 

The first sign of disrespect, followed by consistent disrespect, cut your losses and move on because they will never produce work that is any good for you or your business.

Talks About Other Entrepreneurs or Business Owners With Disrespect or Disregard

Entrepreneurs work hard.   Let’s face it, no one in their right mind would spend hours a day getting paid NOTHING on a vision that possibly only a handful of people believe in at first.   

Often it’s people’s second business so you have limited time to spend on managing the agency.

My agency founder called a few other entrepreneurs who were smashing the market like Jeremy Liddle (Capital Pitch) ‘arrogant’.   

So it comes as no surprise when he decided to end the relationship with me, he called me arrogant and probably still talks about me like that and I’m not even smashing the market!    

I’m still a baby startup, still learning. 

If they talk down to you, or their own staff or talk about entrepreneurs or other business owners then expect them to talk to other people about you. 

Advertises Top Heavy Management

If the agency has a CFO, a CTO, a CEO and other top-heavy staff but a search reveals staff of 1 – 10 and they outsource their development it means all the top heavies are out chasing new business and no one is managing your project and/or all the top heavies are focusing on the one client who is either paying them more or they perceive they will be getting more business from in the future.   Makes sense. 

Good coding and development take time and developers need to be managed closely because it is hard.   Coding is hard, just like writing this especially long series wasn’t that easy. 

It needs daily and weekly stand-up sessions.   It’s detailed work because if one section isn’t working then you need to find out why and change.   That takes time and smarts. 

Too many at the top, no advisory board, a staff of 1 – 10 and if they outsource great but you are then dealing with language barriers and who knows at the other end so, if an agency is top-heavy then you need to know who is managing your project daily. 

Agency Referrals / Staff / Shiny Button People

Referrals are nice but remember that there are two types of referrals, one people rave about your business and talk about you completely unprompted. 

The other is referrals for service or cash, which probably won’t be revealed, so yes take those referrals but do your own due diligence.

My agency was referred by a well-known lawyer in the entrepreneur set based in Sydney.    This should have been a red flag because that lawyer turned out to have never used their services but was more a close ‘friend’ of the agency.  

They also had staff members who are in the startup scene.   One had a failed business, the other staff member initially had MVP built by the agency but then parted ways and although still works there and is doing really well in the market doesn’t use their services – red flag.

Entrepreneurs get very excited when all you hear is no then you speak to a developer or agency and it’s yes, yes and yes.   

Careful.

Great businesses that go the distance are not built-in 6 months.    They’re slowly built over many, many years and/or have spent years building an online market with people pushing it online – some via strategy – read this interesting article from a technology reporter on how Hubspot reached impact online (article).

I notice in this startup industry and in direct contrast with law, there are a plenty of shiny button people.

Shiny button people seem successful but if you look at their bank balance it’s zero to below while their credit cards are maxed. 

They jump from one project to the next thinking they are on to the next big thing until the next BIG thing comes along.

One minute my agency loved me, the next they hated me, next they loved me.   It was schizophrenic business and it’s how shiny button people work.

You’ll know this type of business because it’s ego driven.   

If you want to quickly find this type of business look at how they run, which businesses do they align with and take a close look at their leader.

If the company’s CEO professes his wealth in the millions but you can’t find a single business that he or she has made wealthy, they drive fancy cars but don’t run million dollar businesses or you can’t identify a single customer who they have helped become a millionaire then you know it’s an ego run business (read this article about how this entrepreneur lost investor funds at US$21million – the story of ego run Fling).

They want this lifestyle fast but they don’t want to work for it or they look like they work for it but earn their money off the backs of people who sometimes can’t afford it.

I get it, you know, you need to build market quickly.   All startups need to get to market quickly.

But understand this that you have plenty of time, in fact, the more time you take, the more customer feedback, the more careful you are about hiring and finding out who to deal with – the greater and more chance that your business will survive.    

Read the story of Flow Hive for what I mean. 

There’s a saying

Act In Haste

Repent At Leisure

If you’ve had a positive agency experience please comment on this article.

We would love to hear of positive agency experiences to offset our own poor experiences and this will help other start-ups talk to the right people.

EMOTIONS

Cause when they own the information.    They can bend it all they want.

John Mayer

When you control the information, you control the outcome.

Never let another person fully own your project – ever.   Turning over your project will simply dis-empower you and you won’t learn as quickly.

That’s the only way you can have some level of control and one of the best ways to control your emotions because there isn’t a power balance issue. 

I used to sit around and wait for the agency founder to phone me with updates.

As a client, it’s hard because this is your money and business.    

My project has an emotional element because I’m super passionate about helping the environment, sustainability, and climate change.

When you have no power it feels like you are throwing money up against the wall without anything coming back in and that creates another pressure, the pressure to get something out into the market.

This isn’t a problem with the right team, research done and clear boundaries and a respectful working environment but when you suspect that your agency or developer either isn’t going to deliver or has indicated that they won’t be helping you get to market then the trust is gone.

When the trust goes that’s when emotions come into play.   In my case, they had already told me they weren’t going to help me get to market so for around 2 months the trust was gone.   

My project had been re-branded, repackaged, re-stamped with someone else’s version.

For months after they transferred the source code and whilst I was trying to find developers who could help untangle the backend, I could not even look at the project in the same way.

Every time I looked at my project it reminded me of the agency founder / CEO.

Now flash forward 9 months later I am starting to love my project again despite having half an MVP, half a built market, I’m happy again because I’ve reconnected with why I started the project in the first place. 

Here are some steps to control your emotions:

  1. As soon as your gut tells you something is wrong – act on it.    Change the communication style, push for more transparency or cut your losses and find new developers or agency.   Go to their office if you can.   I was so confident of launch that I uprooted my life and went to Tasmania to build the market in person so I couldn’t just turn up at the agency.  Fortunately, the delightful Melissa Pye who was at Fishburners at the time (I was book editing for her offered to go and talk to them), as well as my semi-mentor Phil Tran.
  2. As soon as the relationship sours you are going to get either abusive email, texts and you will be ‘blamed’ for the project not working.   This is hard but do not write back, cut the relationship and move on and understand that unless your project has run into $100K or over it’s not going worth the legal fees to chase it and some agencies and developers play on the lack of industry standards and the fact that you are bootstrapped and have no money to hire lawyers.
  3. The only thing you won’t get is a phone call to discuss the project and why it’s not working or hasn’t been delivered.   You will never get time back.    So act swiftly and listen to your gut as well as the data. 

HOT TIPS

  1. As SOON as the relationship sours – take action and control the situation – act swiftly or they will take as many months as they like to deliver at best a challenging website and at worst no website at all.
  2. If you think you have a claim and you’ve paid on Paypal, lodge a transaction dispute.   If that doesn’t work lodge a credit card dispute – they can’t fight with an entire bank but they will fight you as a founder because they think they can get away with it.
  3. 80% of developers and agencies will ALWAYS say that it was a breakdown in communication and blame you for the outcome.
  4. 20% will troubleshoot and change practices so next time client communications improve and they will find out what went wrong and why.

TIPS TO MANAGE YOUR EMOTIONS

  1. Don’t respond straight away after a relationship breakdown.    Wait a couple of days until the anger is all out.
  2. Don’t complain on forums because even though the developers have done the wrong thing people don’t see that side.   Developers will never say they stuffed up or admit any wrongdoing or ruin their next job opportunity. It will just look poor form for you.   Keep everything from social media, people judge you on social media way before they meet you.
  3. Don’t drink alcohol because it will only heighten the emotion.
  4. Don’t respond to any emails, Skype messages or texts.   Take these and create a file, call it ZZZZZZ and move every piece of unhelpful, unprofessional communication out of your line of sight.  It will help you move on quickly.
  5. Give yourself time to recover and only engage again with your project when you are ready and the emotion is all gone.
  6. Know yourself.   What’s the healthiest thing you can do to reduce stress – take a run, talk to a mate, speak to your mentor (in my case I have five each offering different help), do yoga, breath, punch a soft couch (not too hard), squeeze a stress ball, whatever you need to do, find your go-to and do it.

AGENCY and DEVELOPER RED FLAGS – CUT AND RUN

If your developer or agency does this, it’s a red flag:

  1. Starts or any point in the relationship becomes non-transparent or unwilling to answer simple questions because ‘you wouldn’t understand’ – this means they don’t understand what they are doing.
  2. Gives you a project scope which is ambiguous or nondescript on the tools and frameworks they will use to build the site.
  3. Issue no Terms & Conditions or has any on their own website or don’t issue you with any T&Cs, guarantees or warranties.
  4. Mentions that they have everything listed in 3 above but never show it to you.
  5. Starts attacking you personally, that’s a big red flag, that they either have messed up and don’t know what to do next or they didn’t take instruction correctly and have implemented something which will be hard or expensive to fix and/or have entered into massive scope creep.
  6. Coding is step based – if they start out too ambiguous, don’t do a site audit on your existing code or say ‘yey we can fix that’ but then give you no instruction on how they intend on fixing – next.
  7. Advertise one thing on their website but then behave totally different once you are a client and have paid your deposit.
  8. Won’t give you access to their outsourced developers for an interview – meet the entire team who will touch your website.    This doesn’t mean you will manage the process.
  9. Don’t have a Github, Gitlab or BitBucket account for the developer(s) working on your project – NEXT that includes Agencies.    Note that some developers work in corporate so may not have a separate code repository. That’s no problem so long as they are willing to work on your project via your chosen code repository.
  10. Doesn’t have a project management system which includes YOU.
  11. When challenged on project timelines to completion criticises you professionally saying things like ‘you don’t understand what you are doing’ but when asked to explain this they can’t explain what that means in respect of your project.   People in tech who know what they are doing don’t need to do this because they can explain tech in simple terms.
  12. If your developer or agency at any point starts showing signs that they disrespect you as a person or client – walk away.    If you feel like an ‘employee’ of an agency or you are walking on eggshells – walk away.
  13. If they withhold your source code until payment that’s a red flag, find someone to audit the site before they hand it over.   You need to be 100% sure that what they are handing over isn’t full of hard code or littered with bugs.   Get all documentation first before paying money. 
  14. Someone recommends them but doesn’t use them on their own project.
    Another entrepreneur worked at the agency but went on to not use them herself.   Also, a lawyer who I’d just met but operates in the start-up scene recommended the agency but also doesn’t use them.   Never assume anything
  15. Don’t have or won’t enter into a Terms of Service or another contract which sets out the terms of the relationship.
  16. If they have a Facebook account and the reviews are off, you can bet it’s because someone has reviewed them unfavourably.
  17. Research the owner, if there is little information or information doesn’t seem to make sense or they are in the startup community but don’t engage with the community it’s for a reason.

HOT TIPS TO AVOID RED FLAGS

  1. Research yourself and start with the end in mind
  2. Create a list of ‘Must Haves’ and ‘Nice to Haves’
  3. Grab a piece of paper and hand-drawn every single page of your MVP
  4. UX is important and a hand drawing will help the UX designer understand your project
  5. Ask your UX designer to help you create UI and wireframes
  6. Read the Mom Test by Rob Fizpatrick and then validate your idea using a simple landing page
  7. Ask yourself what is the least you can get away with in the market to solve the core problem of your idea?   Then do it.
  8. Start with the money (R&D tax incentive and how you intend on earning revenue from day 1) and factor in 20%-30% more in both time delay and funding.

Remember that companies like Freelancer, Airtasker, Airbnb, Uber, Canva, Deliveroo didn’t start out with the bells and whistles.  In fact, their sites were so basic that you wouldn’t even recognize them now.

If you can do an off-the-shelf and it has all the functionalities that you want then do it.

Just keep in mind that if you get an off-the-shelf customization will cost a bomb so build the market get feedback, write it all down and then start this entire process all over again including factoring in pricing and the rebuild of your platform to suit.

Go to market as cheap as possible to solve your idea/problem.

Everyone wants to be a great startup –  the next Facebook, Uber, Airbnb, Canva, Freelancer, Airtasker, Deliveroo but understand that most of these companies had investors behind them at some point and the ones that didn’t it took 10 years or more of blood, sweat and tears to reach global impact.

Want to know how the professionals are doing it?

READ our next article How Professionals Currently Manage Developers