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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Who deal with Chicken and egg situations

for Services contract

Do we hire the team first or wait for the contracts to materialize?

Situation is fluid the contracts may or may not happen. In long run i intend to stay with consulting and services as part of my business.

So to expand a bit what is the right stratergy. If dont hire today i loose training time. If i hire and dont get the contracts in time i am paying from pocket?

ur 2 cents??
The Egg Vendor
Monday, August 18, 2008
If you don't know the answer to this, you really shouldn't be trying to run a services company.
Monday, August 18, 2008
I would work by myself on smaller contracts and develop a client base. As the demand grows I would start to hire people.

If you don't have the technical skills to work on contracts by yourself, perhaps you can partner with someone who works on a % basis. Alternatively you can hire a few people and offer them 15-20% of what you make. That way you don't pay until there is work to be done.

Monday, August 18, 2008
If you can't make payroll, don't hire. (i.e. wait till you have the money to cover payroll, either as income or as savings)

As for hiring people on a percentage-of-revenue basis: would YOU take that deal? If not, why would you expect anyone ELSE to take it?
Jeffrey Dutky Send private email
Monday, August 18, 2008
Some college students might take that deal for experience. Or he might be living in a 3rd world country where many people would take the deal.

Monday, August 18, 2008
I think something more important was said here. It is the power to take the decision.

If i cant do that then this really needs to be thought about.

Just so that it may help anyone else in similar situation following is what i have decided to do

1. ensure i have a budget.
2. Ensure i have queries and see demand.
3  if and 1 & 2 are a go then go for it.

Since this is not a new business i think we can live with a little expansion. This would also allow us to fine tune few product ideas that we have encounted as problems with previous clients.But that is a differnt ball game.

Also i would not go with the % idea. I think that greatly undermines the direction of the company. This could act as an added benfit but not as a starting point.

thank you for the feedback
The Egg Vendor
Tuesday, August 19, 2008
There's nothing better than a few payrolled bums on the couch to stoke a fire under your sales campaign ;-).
Tuesday, August 19, 2008
> Do we hire the team first or wait for the contracts to materialize?

If you hire the team after, you lose time. If you hire the team before, you lose money. Either way, you lose.

The best way to deal with a chicken-and-egg situation is to avoid it. The second-best way to deal with a chicken-and-egg situation is to apply overwhelming resources.

Most companies don't have overwhelming resources, so they they wait for the contract to be awarded. Then they hire the wrong people as quickly as possible.

After taking a long time to hire the wrong people, the project is a disaster. A year or two later, as the disaster winds down amid lawsuits and recriminations, the company lays off all the workers. Lives are damaged, money is wasted, reputations are tarnished. In a flight from shame, everybody changes jobs and avoids their former co-workers.

IF, by some miracle, the company survived the contract it was awarded, the company will bid on a new project with a different client. At that time, the disaster creation process starts anew.
Wednesday, August 20, 2008

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