In a bootstrapped startup every second counts. Every day worked, every project has a huge impact. With low capital and high risks, it’s imperative that every resource is executing efficiently. A huge problem presents itself when you need to increase your resources. The simple answer, assuming the money exists, is to hire another employee to help with the load. The problem with this is two fold though.
First, the flexibility. When you hire, you will always hire for a specific expertise. The new hire will be passionate about, and an expert in, a specific area. You’ve hired this person because you think increasing resources in this area of the company is where you’ll have the highest ROI. The problem in a startup though, is the areas with the highest ROI change constantly. Your highest priority today will most likely not be your highest priority tomorrow. Yet an employee is a fixed cost, a fixed passion. No matter how willing they are to change, their passion and expertise wont.
Second, a new employee takes time to train. They may be experts, but they’re not experts in your business. They may be passionate but they’re not yet passionate about your business. This takes time. It can easily take 3 to 6 months to have a new employee fully operational. Longer if you don’t yet have solid processes in place. On top of that, it takes another few months for them to execute on a project and see the resulting return on that project. This means, each new hire has a minimum of a 6 to 9 month lead time until you see a return. That’s a life time in a startup!
So how do you get around this problem? Freelancers. Figure out what requirements you have today and outsource. You can increase or decrease time spent on various parts of your company relatively easily. You can repeat actions which work with a very low overhead. And if your business takes a little longer to take off than you had thought, you’re still financially okay as you can easily pair down your freelance spending.
The really cool part is you’re preparing every single one of your freelancers to be a full time employee. You’re talking about your vision with them. They’re understanding what works and what doesn’t to grow the company. You’re figuring out if they fit culturally. And when you start seeing your growth. When you know with 100% certainty what you can replicate to bring in a huge ROI, then you hire your freelancer. The freelancer you’ve already been working with for months. The one who knows your culture, knows you, knows how to be successful from day one. You’ve now cut your ROI on this person from 9 months to tomorrow.