Compensation Diversity | The Successful Non-technical Leader


This article continues the discussion on tips for non-technical founders. You can check out all the tips in our free Guide to Tech Projects for Non-technical Leaders.

The five most common ways to compensate developers are: equity only, low salary + equity, salary, high hourly (fractional gigs), fixed bid.

The option you choose is going to be based on your budget. 

If you have no budget, then your only option is to offer equity. This option sounds good on paper but you may run into legal issues about wage laws. In addition, it will drastically slow your speed to market because the developer will probably have to hold a day job and work on your project on the side. It also drastically lowers the probability that you’ll find help.

If you have a large budget, the conventional wisdom is low salary + equity, but I found that companies can get much further by reserving salary for resource developers and bringing in the lead people on a fractional basis. This is where it is good to find that amazing technicolor dream coder and give him some golden handcuffs with salary + equity. 

If you have a small budget, your best bet is going to be fractional all the way. You can still build a team (surprisingly well in this gig economy) while only engaging the exact resource you need for a given task. You’ll pay a higher hourly rate, but you may actually save money by using the least expensive resource for any given task.

The biggest mistake I see startups make is focusing on only one compensation strategy for the whole team. I recommend what I call compensation diversity because the compensation models attract a very high diversity of thought on how work should be done. They aren’t always in line with each other, and this tension leads to great decisions.

If you found this article helpful, check out all our tips and tricks by downloading our free Guide to Tech Projects for Non-technical Founders.

If you need hands on help with your project, Buink has years of experience managing and completing technical projects on time, under budget, and with a high level of quality. Contact Buink today.

About The Author

Ben currently works as a senior developer and technical business consultant outside of Boulder, Colorado.

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Buink Web Development is a website development company founded in 2009. Although we still focus on web development, we now offer digital marketing services, web design, local SEO services, ecommerce website design, and custom logo design

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