I just caught this article from Mashable and I just had to pipe in. In the article, Mashable’s Kristen Nicole claims Guy Kawasaki paid too much for the development of AllTop, at $10,000. They compare it to Askablogr.com, claiming Chris DeVore only paid $7500 for the development of Askablogr, with its rich feature-set.
I was blown away by this! Not that Guy Kawasaki paid $10,000, but that Chris DeVore only paid $7500 for Askablogr. Now, I don’t know Chris, so take this with a grain of salt, but some call it a deal. I say he’s a cheapskate! For something that will be your primary revenue source and your main line of business, $10,000 for something like Alltop.com is a steal! The fact that Chris DeVore only paid $7500 for his development means he’s either hiring offshore, doing the development himself (in which those costs are way under-inflated), or he’s very much underpaying a bunch of gullible developers that probably don’t believe much in the product they’re working on.
As a business owner, when supporting a technology-based business, it is of utmost importance that you put your developers and IT staff at first priority. They are your bottom-line, and should be the superstars of your business. You have to keep in mind that for top notch developers and technology, you’re competing with the likes of Google, Facebook, Yahoo, and others to get the best talent. By not paying your developers, you will either a) lose your developers very quickly, b) have a revolution at one time in your future and your developers will all back out on you in rapid succession, or c) not get the best work and skills you could be getting, and you’ll definitely run into scalability issues as your site grows in the future.
I recently finished the book, “My Startup Life“, by Ben Casnochas. I bet Guy’s read it and Chris hasn’t. In it, Casnochas talks about the lessons he learned by not paying his lead developer well. He quickly had threats of the staff to leave, and they quickly ran into scalability issues due to the unexperienced offshores they were hiring overseas. In building a technology-based business it is of utmost importance that you pay and treat your IT staff well or it will come back to bite you in the future.
So, Kristen, I say Guy is the smart one in this case. I am willing to bet his site scales better, his developers are happier, and more likely to work with him in the future. Guy’s likely to get millions for Alltop.com in the future, should it succeed, so $10,000 is a very small price to pay to get good developers on staff.
UPDATE: See Chris’s comment here: http://staynalive.com/articles/2008/03/21/well-done-guy-chris-devore-is-a-cheapskate/#comment-2126. I probably inappropriately labeled Chris a cheapskate while trying to defend Guy. It turns out (and I should point out, unless I read it wrong, that the Mashable article did not make this very clear either) that Chris’s project was a project built simply to point out how cheap something could be developed. In that case it would make him an intentional cheapskate, not that there’s anything wrong with that. As I mentioned, I’m a cheapskate too – I just don’t see the reason to short projects in development costs when it is the core to the business. It is an interesting experiment regardless. Thanks for visiting Chris!