Stage-by-stage guidance on in-house hires versus outsourced engineering, from pre-seed to Series A
Matt Kowalczyk · EXIT83 Consulting
Published September 6, 2024Explore the lesson. Sign in to access the slide download.
Matt Kowalczyk shares lessons from building software teams as a founder. He covers the trade-offs of finding committed people, communicating culture and expectations, and learning from earlier startup failures.
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“hi everyone welcome I'm uh Matt kowalik I'm the founder and CEO of exit 83 Consulting it is a uh we do a lot of custom software development and staff augmentation services but I've also done 12 startups as well some of them were wildly successful wildly is probably a stretch successful some of them were spectacular failures so I've been on both sides of the equation here so I'm going to as we”
“identifying quality candidates candidates can be extremely challenging uh so it's worth spending the time to do that but again that's the risk that you take is you're going to spend time to find the people everybody wants some equity in what you're doing they want to be invested you're investing in them for Long Haul they want an investment for the Long Haul as well so that's another trade-off you have to make the quality people everybody wants them it's hard to get”
“before you actually get anything done so you have to find that right balance next is culture turns out us american-based companies Founders are terrible at describing what they want they will tell you here's the road map I want you to do a I want you to do c and I want you to eventually get to F and they will forget B and E and what”
“fair number of startups I had a couple like I said that were pretty successful I had this music startup it tanked I lost a couple hundred grand of my own money on it and uh it was very specific what we were doing me being an old Tech guy from Microsoft I thought I would bring in some of my Microsoft buddies who were still working at Microsoft and we'd go build this music platform turns out they were still working for Uncle Bill and they didn't necessarily have the time to also work on this so we”
“Business Growth Stages Pre-Seed Seed Growth - Series A $0-$200K ARR $200K-$2M ARR $2M+ ARR 2-3 FTE 3-4 FTE 4+ FTE IP idea IP development IP security Market fit 1st sale / 1st Iteration 2nd/3rd Iteration Cash is limited Cash neutral Cash rich Not sure Good idea Scale quickly 0 outsourced 2-3 outsourced 5+ outsourced”
“FTE Hiring Risks Scaling doesn’t happen for free Interviewing is costly and time consuming Identifying quality candidates is challenging Equity compensation is expected High competition for quality people Firing any FTE is always complicated Salaries are the biggest drain on cash resources, so timing is critical”
“Cash is king in a startup Need to find right balance What are your goals for outsourcing Misaligned goals can be costly Leverage as a tool to dial in market fit Iterate fast, scale quickly Intentional Outsourcing Can Get You to Scale …but it can also cripple you TIMING APPROACH AGILITY”
“Timing is Everything Cash is a premium early in business Need to balance fundraising, revenue generation, and business growth Outsourcing doesn’t imply low cost Invest in the now Skills to achieve the next goal”
“Senior people, but part time committments Competing priorities Unable to move quickly Outsourced team in Asia 2 day turnaround Built to spec, didn’t solve problem Outsourced AI Multiple models Leapfrog competition, reduced costs Resourcing Lessons Three Case Studies FTE COMMITMENT CULTURE AGILITY Music Startup Invoicing Startup Pipe Inspections”
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Should I Hire Full-Time Employees or Outsource Engineering? Lessons from a 12x Startup Founder - Slide Deck
Founder of EXIT83 Consulting, offering strategic advisory services for businesses and startups.
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Jay Ackerman · Reveleer
Each slide with a short explanation of what it shows. Open the slide text for its exact wording.
14 passages
SaaSOpen, September 2024 Should I Hire Full-Time Employees or Outsource Engineering? Lessons from a 12x Startup Founder Matt Kowalczyk CEO, EXIT83 Consulting, Inc
Hiring choices should reflect the company's stage, while outsourcing can provide agility and speed to scale. The talk will connect early full-time commitments, team culture, and business needs to those choices.
Over the next 20 minutes I’m going to show you WHEN TO HIRE Invest in your team Long term perspective Hire for person, not skill WHEN TO OUTSOURCE LESSONS Need agility Speed is critical Time to scale Early FTE commitments Culture drives success Business phase dictates need
The slide maps pre-seed, seed, and Series A growth to increasing ARR, employee counts, and outsourced capacity. It pairs each stage with a different product and cash position, moving from 0 outsourced at pre-seed to 5+ outsourced at growth stage.
Business Growth Stages Pre-Seed Seed Growth - Series A $0-$200K ARR $200K-$2M ARR $2M+ ARR 2-3 FTE 3-4 FTE 4+ FTE IP idea IP development IP security Market fit 1st sale / 1st Iteration 2nd/3rd Iteration Cash is limited Cash neutral Cash rich Not sure Good idea Scale quickly 0 outsourced 2-3 outsourced 5+ outsourced
The EXIT83 example assigns distinct jobs to a co-founder, an execution hire, and a strategy hire. The profiles connect technical experience to the largest investment, local expertise to establishing the business, and computer science expertise to outpacing competition.
FTE Hiring in Each Growth Stage Co-Found Execution Strategy Biggest Investment Establish the business Outpace Competition 30 year tech vet Local expert PhD in Comp Sci Case Study: EXIT83 Consulting, Inc
The co-founder is framed as the most important and biggest hire, backed by a 30 year technology veteran. The slide says investors vetted this person and emphasizes a willingness to take on difficult work.
FTE Hiring in Each Growth Stage Case Study: EXIT83 Consulting, Inc Co-Found Execution Strategy Biggest Investment Establish the business Outpace Competition 30 year tech vet Local expert PhD in Comp Sci Co-Found Biggest Investment 30 year tech vet Most Important Hire Vetted by investors Biggest bet Will walk into the fire
The execution role pairs an expert operator with local expertise to establish the business. The slide presents this hire as less costly, invested in success, and agile.
FTE Hiring in Each Growth Stage Case Study: EXIT83 Consulting, Inc Co-Found Execution Strategy Biggest Investment Establish the business Outpace Competition 30 year tech vet Local expert PhD in Comp Sci Expert operator Less costly Invested in success Agile Execution Establish the business Local expert
The strategy role is hired later to support strategic growth and create an advantage over competitors. The profile links a PhD in computer science with helping the company build a moat.
FTE Hiring in Each Growth Stage Case Study: EXIT83 Consulting, Inc Co-Found Execution Strategey Biggest Investment Establish the business Outpace Competition 30 year tech vet Local expert PhD in Comp Sci Hired later in process Strategic growth Unfair advantage Creates moat Strategy Outpace Competition PhD in Comp Sci
Full-time hiring can drain cash and takes time to get right, so timing matters. The listed risks include costly interviews, hard-to-identify candidates, expected equity, competition for talent, and the difficulty of firing.
FTE Hiring Risks Scaling doesn’t happen for free Interviewing is costly and time consuming Identifying quality candidates is challenging Equity compensation is expected High competition for quality people Firing any FTE is always complicated Salaries are the biggest drain on cash resources, so timing is critical
Intentional outsourcing can help a startup scale, but poor timing or misaligned goals can damage progress. The slide organizes the decision around cash and balance, a clear outsourcing goal, and agility for testing market fit and scaling.
Cash is king in a startup Need to find right balance What are your goals for outsourcing Misaligned goals can be costly Leverage as a tool to dial in market fit Iterate fast, scale quickly Intentional Outsourcing Can Get You to Scale …but it can also cripple you TIMING APPROACH AGILITY
Early cash is a premium, so resourcing must balance fundraising, revenue generation, and business growth. Outsourcing is not necessarily low cost; invest in the skills needed to reach the next goal.
Timing is Everything Cash is a premium early in business Need to balance fundraising, revenue generation, and business growth Outsourcing doesn’t imply low cost Invest in the now Skills to achieve the next goal
A team creates value when it understands the immediate goals and can resolve issues in a way that fits the company's culture. The slide pairs cost and execution tradeoffs with understanding US culture and empowering people instead of expecting them to simply please.
Culture Drives Value Achieve the immediate goals Balance cost vs. execution Understand US culture Time to resolve issues Empowerment, not a “pleaser”
The cases show how commitment, cultural fit, and agility shape outsourcing outcomes. Part-time senior staff faced competing priorities, a team in Asia had a 2 day turnaround but built to spec without solving the problem, while outsourced AI using multiple models helped leapfrog competition and reduce costs.
Senior people, but part time committments Competing priorities Unable to move quickly Outsourced team in Asia 2 day turnaround Built to spec, didn’t solve problem Outsourced AI Multiple models Leapfrog competition, reduced costs Resourcing Lessons Three Case Studies FTE COMMITMENT CULTURE AGILITY Music Startup Invoicing Startup Pipe Inspections
The recap favors full-time employees for long-term value while matching roles to the current business phase and hiring for the person. Outsourcing brings agility and speed, while the right balance depends on early commitments and a culture that supports success.
Over the last 20 minutes, I showed you: What I’ve learned over the last 18 years WHEN TO HIRE FTEs for long term value Hire the right role for the current phase Focus on the person, not the skills WHEN TO OURSOURCE LESSONS LEARNED Need agility Speed is critical Time to scale Early FTEs most important Culture drives success Business phase dictates balance
Matt thanks the audience and leaves contact channels for continuing the conversation.
SaaSOpen, September 2024 Thank you! https://exit83.com https://www.linkedin.com/in/mattk/ [redacted email] Matt Kowalczyk CEO, EXIT83 Consulting