Folks:
Some friends have a long-established physical goods company in Manhattan. They have a market-leading niche Web-based business that sells digital goods via a site built with the Magento toolkit. They’ve outsourced development of this site with mixed results (though better than healthcare.gov!). I suggested that they might be better off hiring their own programmers who will be dedicated to the site and the customers.
I’m thinking that they would need a product manager who does some coding and database development and two programmers (one fresh out of school and one with a few years of MySQL/ecommerce experience?).
First, do readers think it is positive or negative that they have a Manhattan location? Obviously there are talented people in Kansas who can work at a lower salary and still enjoy a very comfortable standard of living. On the other than there are a lot of young people who want to live in Manhattan.
So… if they are to hire some full-time people are they better off establishing a satellite office somewhere else? And, if not, what are the going rates for competent full-time PHP/ecommerce developers in Manhattan?
Thanks.
Why do they need to choose? I find it baffling that those of us in the industry that can best allow remote workers still feel it necessary to have those workers travel to an office. You yourself have written at length about commuting. Why add the expense of an office and equipment to in-housing the development? Find developers who can work from home, use hangouts, use the saved infrastructure money to pay for better back office services and better remuneration for devs.
Ben: These guys are not professional software engineers themselves, nor are they very precise writers, so I think it would be a lot easier for them to work with people face-to-face. My own experience with remote workers is that there is definitely more opportunity for confusion about what should be done and remote workers can go pretty far down an irrelevant path before anyone else notices.
It really depends on the size and complexity of the project. If they just want a standard e-commerce site that doesn’t need to handle a ton of load/traffic, that can be done just about anywhere, though it seems like they have that already. However, if they want to launch the site as a core part of their business, they should hire everybody in the same location. You know, things like BI reports, marketing (website, PPC ads, etc.), SEO, integrating and automating internal business processes (customer support, inventory, returns, etc), an so on and so forth.
Agreed, email is a great way to develop a product you didn’t want, but don’t hangouts or facetime or Skype replace the need to IRL face time when used judiciously? Daily standups via hangouts should still take place with remote employees, milestones set with basecamp, demonstrations with hangouts, etc.. The need to have your employees in house is more about the belief that remote workers spend more time goofing off than working while there appears to be a good amount of data contrary.
Ben: I don’t think remote distributed workers are ruled out in this case due to a potential lack of integrity among programmers but rather due to a lack of organization among the managers. I just don’t see my friends going into basecamp and setting up the milestones that you posit or even being organized enough to do the daily hangouts at scheduled times (they have other people to manage, remember!).
Separately, I do think that there is an esprit de corps that comes from working together in one office. It is not so easy to feel connected to users and colleagues while sitting at home.
Finally I am going to note that if you’re right and I’m wrong, how could the concentration of businesses and people in Manhattan continue to exist? Given the expense of real estate in Manhattan and the 55% marginal income tax rate that doesn’t go to fund current services (NYC now spends more on police pensions than on police salaries), wouldn’t competitors with distributed work-from-home workers dominate?
Phil,
If they’ll be competing with top talent (self-directed developers willing to learn just about anything), they’ll likely need to pay each of their engineers in the $125-$200 range, mostly depending on experience, much more if they have competing offers from the up and coming tech scene there, such as the Google office in Chelsea.
If you take a typical front end/IT-style programmer though and want to retrain them (the friends may not have that expertise), you could probably find students with graphcs/design backgrounds and minimal programming willing to work under $100k.
As somebody who does this for a living (I work as the lead tech consultant for a variety of small businesses, all in the $1MM – $5MM range) – the team would probably be better off hiring somebody close to Manhattan and then doing on-sites once a month or so, with regular phone calls to keep in sync.
Being disorganized doesn’t get better by having a resource at your disposal 8 hours a day within immediate reach – sometimes having a little distance (and time) allows the proper organization of tasks and thoughts.
Also – they probably wouldn’t need a full team if they used something like Shopify to handle most of the heavy lifting (based on volume and ASP of their items, this will probably save them a lot of time and cash in the long run).
And unfortunately for Manhattan – you’re looking at a minimum of $125K for a programmer who’d need some guidance (i.e. less of a PM skillset)