Most startups wrestle with how to trade off development velocity against burn rate. Certainly we have been agonizing over this at Jostle.
A good analogy is that you are selfishly manning a life raft to row to shore, which is weeks away. Your only provision is a case of pop. Do you invite others to join you in your boat?
To keep it simple, let’s consider the case of hiring helpers for a single (‘lead’) coder. These helpers will be less expensive and less productive than the lead coder, so the overall impact on when you run out of money and how much code you have at that point is not obvious.
And there is a training period where everyone is less productive. And an ongoing supervision/coordination cost for the lead.
I built a simple model that takes all these things into account. Contact me at BJFPalmer@gmail.com if you would like a copy of this Excel model so you can play with your own assumptions.
Using my assumptions, with a $50 k runway to support this team, results in the chart below. The dynamic seems clear — adding people shortens the runway much faster than it adds output. Adding a person shortens the runway by 33% and increases the output by 18%.
We know having runway is super important since it provides time to learn from customers and iterate the product. In our paddling analogy this runway provides more time for a plane to fly over and point out the direction we should paddle.
Which I think means that it makes sense to add a person only if the fit is outstanding and you need their skills ‘to get to shore’. Back to the paddling analogy — you add a person if they fit in the boat and there is a headwind that requires their paddling output.
But this is just a model with lots of assumptions (which are very sensitive to exactly who we hire and what we use them for). The consensus at Jostle, which was based as much on intuition as this model, was to go ahead and add one “helper” to the team.
Know any great young developers looking for a startup adventure?