When I started my first company back in 2011, Philippe, my co-founder and I pitched investors
on this super clever idea that we had. We are going to have our headquarters in New York city,
but then we're going to host our dev team in Costa Rica, where we are originally from
I remember that this idea to host a remote deaf team like that raised plenty of eyebrows.
We did an end up raising money for that company.
Not just because of that, but mistakes were made overall, but then fast forward.
And recruiting engineers outside of the U S has become a standard for both small startups and for
large businesses companies like remote.com have raised hundreds of millions of dollars precisely.
Because they bridge this gap to hire people remotely made it easier and compliance. So it's
a real option these days for many businesses and even companies like Google are struggling
to recruit developers in the U S oftentimes acquiring, or at least Aqua hiring companies,
just because of their tech talent so much so that in this case,
even valuations are estimated based on the number of engineers
that they're recruiting about a million dollars per engineer, isn't standard valuation these days.
So in today's Startups 101 video, I want to talk about three. First recruiting
developers at a pre-seed stage when you don't have a lot of money to afford them
second recruiting developers, abroad or remotely, and last but not least
the delicate art of keeping an engineering team. Okay. So let's start with a seed stage.
According to built in a full-stack engineer in New York city, we'll be making almost $160,000
a year in Silicon valley. The average salary is closer to $200,000 a year.
Not including other benefits. These are massive, sexy venture backed companies,
hiring developers with that budget. And you can guarantee that the real good
engineers are for the most part employed on terms that look more or less like that.
So you could call bubble on plenty of things. The housing and NFTs go watch our videos about that.
But in this case, tech talent is not a bubble, it's an essential piece
of pretty much any new company these days. And it's very evident that supply
is not meeting demand. So obviously the price will go up. So if you have an idea,
and if you're looking to hire a developer to coat this idea for you, what do you do?
Of course, you've raised some money to be able to compete with them right
now. First of all, a great engineer already had an offer from a venture back. With an option.
There are thousands of job openings just looking at angel list. So why would they pick you on the
other hand, investors know how competitive this landscape is these days, if that tech talent is
not on the team slide of your pitch deck, you are just a guy with an idea and no way to execute it.
Nobody is going to fund that. So if you have a business idea,
you are not looking to hire a developer. You are looking to recruit a co-founder,
which is an entirely different conversation. It's absolutely not come work for me. Talk
instead it's at let's work together talk and that very scarce list of engineers.
There's an even smaller, more niche group engineers, willing to quit their jobs,
to start a new business. That is the type that you're looking for. And trust me,
founders with ideas can go on for years trying to find that. So my
best recommendation is to start with people. You know, there's a very, very good chance.
Your future co-founder is someone you've known
for years, rather than a complete stranger. And that's why these startups, Silicon valley
and New York becomes so powerful because of that network effect. Another recommendation,
as I said, is not positioning this conversation as, Hey, you'll be developing my idea, but.
I have a few ideas. What do you think, you know, better than me on this,
I acknowledge your expertise as an engineer, rather than just saying,
Hey, build what I tell you to build. If your idea is not getting traction may want to accept that
that might not be a good idea. There was this fantastic as Reddit thread: coders of Reddit.
How do you politely refuse your friend's million dollar app
idea? And I think it's worth a read. Um, I'm just going to link it in the description. One
of my favorite funding stories here is a company called Peel. A company that my former
co-founder Phillipe started a couple of years back. So this was a business established
by two engineers and a product manager who knew each other from their previous jobs.
So they got together, they use their own savings and their own budget to build a prototype and MVP
without hiring anybody without. And they had this smooth fundraising process afterwards.
And I believe because of that combination, when three product people preferred doing this company,
then that $200,000 a job that they probably had, it speaks well about their chance of success.
And investors can smell that. So let's talk about early and growth stage. Now,
assuming that you have a CTO, hopefully a cofounder that you managed to ship a product
and you managed to raise some money. You'll probably find yourself aggressively
expanding your engineering team and this time with some actual cash in the bank.
So I'll start sharing my own experience, well, our own experience at Slidebean. Today,
we have a team of six engineers and they're all based out of Costa Rica.
Since typing is a us entity. We need them to be employed officially as remote workers
directly by the U S company so that the IP belongs to the U S legal entity.
We manage the logistics of that using a platform called remote.com,
which helps us stay compliant with all of this. So Costa Rica is a country with a paid sick leave,
maternity leave and paid vacations. And I am all for this type of work. So we match
the benefits for them, even though. Even though they're contractors at the company,
but remote.com also has this employer record service, which lets you put people on payroll
pretty much in any country in the world without having to establish a legal entity there.
So that part is one of the most annoying and complicated parts of operations,
because honestly, honestly, a lot of companies just fear this because
legislations are very different across the board. You want to stay compliant
and being compliant in different countries is a mess. But if you're hiring remote, you have
to compete with benefits with the benefits that other companies are providing locally.
So for an engineer in Latin America, for example, the benefits of working as a contractor for
a foreign startup usually outweigh the benefits of being a payroll employee for a local company.
Salaries are higher, even though they're not technically a salary,
but a contractor compensation, some companies make up for these benefits
using other contractual causes, but many countries have hefty fines.
If you're cut out of compliance, even if you don't have a company presence there,
but remote.com has a lot of information to make sure that we are being compliant here.
Honestly removed headache by using them. Anyway, I want to talk a bit about remote teams,
because my take here is that some positions like marketing benefit tremendously from being
in the same place and in the same office and remote work is never going to replace this,
but for other teams like engineering, I think this is probably one of the most remote competitive.
Organizations that you can build now beyond the flexibility of remote work. And I want to talk
about that in a future video. Let me know if you want me to do that. Remember that most engineers
are getting to pick where they work. When you have choices, the decision on where to work,
doesn't revolve around salary alone, but about how passionate you feel about the product,
about the company culture, about how management functions and that company
and how it creatively challenged with the work you are going to be.
The reality is that many US companies are now looking to Latin America to
recruit their tech talent and more and more engineers in Latin America are experienced
English speakers and happen to be in a very compatible time zone to pretty much
anywhere in the U S. Now it's not as cheap as you might think. A full stack engineer,
a full-stack developer in Latin America could still cost you in the range of a
hundred thousand dollars a year, especially after accounting for the legal fees and the company.
But that is still cheaper than the U S but enough blabbering about that. I
sat with Philippe the other day, we had a beer and he told me a bit of
his strategy as they recruit engineers for their team. And, you know, this has mixed
with some of their own experience. First always be recruiting. We always have job openings.
If someone applies, we look at their profiles. If they show promise, we usually try and hire them
for a small and maybe a paid consulting projects to assess their skills. But the job opening
is always there. We navigate our network. Jorge, one of our engineers used to be our CTOs boss.
Two developers of our team, our brothers in law, and one of them referred the other.
So each hire inevitably translates into a new network of engineers. And as long as you provide
an exciting place to work, that network will work. Number three, we often do direct outreach. So
we've mapped some companies that A nurture good developers and B aren't particularly exciting
places to work. And we sometimes reach out to recruit, and this has worked for us, but here's some of
the other ideas that Philippe gave me. Peel has been relying on recruiters to expand their team lately.
I should note that while recruiters are very much extending their network outside of the
U S these days, full-stack developers in Latin America are getting closer to six digit salaries
in the last couple of years, still as an engineer, if you have worked at
some kind of tech company, You will either have experienced recruiters reaching out to
you or you have worked with recruiters directly to help you build your team.
So the standard rate for a recruiter just for you now is about 20%
of the annual salary of the hire though. Many of them are willing to negotiate some
special terms. If your company is super, at least age, uh, Phillipe also mentioned
looking at for a newcomer startups in the hiring sector, for example, tools like.
Like remote women, like higher sweet and G2. I
have given them good leads on developers and are still undiscovered by the masses. Another
case is my friend, Phil Elvis. He's from Dev Squads, andd we'll talk about that in a sec,
but he has a large deaf team out of Brazil. So they put a lot of emphasis on being open about.
The engineers will be working on making sure that they work with new technologies
so that their job itself is this learning experience. And the last
thing that's honestly pretty obvious. It's just talk about it on your channels,
on your website. You just have those posts there, your careers page. About social media.
We might go out and say that we are recruiting a new product manager for Slidebean with
four years of experience working in managing products that passion for working with startups
and tools that help startups flexibility to travel to New York city and to Costa Rica,
and that we have a competitive salary and stock options.
And that you can contact us at jobs@slidebean.com if you're interested. That's true story, but
anyway recruiting goes hand-in-hand with retention. So I talked to Phil who's the CEO of this company
called Dev Squads. Essentially what they do is they build those little squad of a product team in
Brazil that are made up of a product manager and a UX person, and a couple of engineers and companies
in the U S from small to enterprise, super large companies, uh, hire them and hire these small.
Squads to work in specific product features. And when you're doing work like that,
one of the biggest challenges over the past few years has been of course, retention turnover.
For example, as he was telling me, increased from 10% annually, 10% monthly last year,
post COVID. I was talking to this friend of mine the other day, recently raised money.
He was trying to set up this team in Costa Rica and he was struggling because
the recruiters that they were using, they were going on budgets of a hundred, 120 K
for like a full-stack engineer in Latin Americ. Is that, is that real? Are you
seeing that or are they just have a bad recruiter? I think it can be a lot better.
It's true. I'm seeing that. But I feel like before I start talking and trying
to do the product, uh, you can still hire developers that are maybe not senior yet,
but the mid level develop for a lot cheaper, but you have to be good at
selling your vision and making sure these people are not going to put themselves in
a situation where they're going to hate their job, because they just have too many options.
The story I hear every day is, Hey, I have this great idea. I just can't find a CTO
and my answer to them as well. You have to put yourself in their heads where they're,
you know, they're on 120 K 150 K job in Latin America, which is a shit ton of money. Anyway,
you see it. And they're not going to quit this to come work for you in your idea.
Like they, they might quit this to go. For a company that they believe in that they
truly believe in where they are, where they're a partner. How do, how do you
do that in the early stage? Right? You have say you have a CTO, so you have your first
two engineers. They are there. They have some, they have some skin in the game.
How do you recruit your engineer? Number three, number five, where you probably
don't have a lot of money. And so you can't go nitpicking. Like how do you recruit those
3, 4, 5 engineer? Yes. I think that the one that, the number one,
the number two guy just have to be very great mentors. Uh, so you can bring the other people.
They have to see the people that you have, uh, someone that they can learn from,
you know, I think after you take money out of the table
We really care about learning, even thinking, well, sometimes you can not bring this people.
Sometimes there is no amount of money. You can offer someone to come work for you.
This your team is broken. If they don't believe your idea. Many times we got people from very big.
Uh, but what they were doing, they were just being that, that they're not doing anything meaningful.
They were not really new features. And that's, that's where you have to put people in and you
have to give them meaningful work for you, a CEO, like what do you have control over?
Over this retention over their environment. Is it more
operational stuff or do you actually get your hands directly into how they manage
work at, at the technical level? Yeah, it's definitely the CTO job, but I I'm
very involved in making sure like things are going well. And I think you bring a good point.
Developers hate to work for organizations that don't understand their job. We had some people
in the company who are not developers are like, look, you have to understand this.
You have to understand that their job and working with people that understand what they're doing.
It's what was going to do a lot of retention.
You have to do a better job of understanding what kind of value they're bringing
when they have some challenges, why they're having the challenges. What,
what role, the benefits play like company benefits, I'm talking, medical insurance,
et cetera. How much, how much of a role does that play? Because when you're hiring from the.
To Latin America, you don't necessarily can do that. Right? Cause you're, you're,
it's an outsourced developer. It's, it's, it's, it's a contractor in a whole other country. Um,
how much, how much weight does that play in retention you didn't use to,
but now it does play a big role, uh, in, in something. You might be able to,
to using your favor, competing against other companies that do figure out how to do it yet.
Luckily, today there's a lot of companies that can help you with that
and hear that was quite, it doesn't matter if they're in United States
or if they're in Brazil or other places in Latin America, where we hired and
we offer our key employees, a lot of benefits. I'm talking health insurance. Uh, paid time off
the world is becoming smaller in every thing that the companies are offered here in United States.
It's going, it's going down for everyone out there. Okay. So if you're still watching,
uh, it'd be great to hear some of your ideas, let us know in the comments. What
does your team do to keep you or your engineers happy? Uh, once again,
if you are worried about being compliant with all these different labels,
Making sure that the IPS assigned correctly being prepared for due diligence.
And I could speak for hours on this, or you could just go and use remote.com.
It's what we use. And they've also sponsored our video for today and they provided this special
discount to our viewers. So you'll, you're going to get your first employee for free for 12 months,
and then two months free for any additional employees that you onboard on their first year.
And you want to get that by clicking the link in the description and using
the promo code slightly as sort of watching. And we'll see you next week.