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How does a Nontechnical Executive Launch a New App or Other Technology?

Many executives have great ideas for an innovative app or software technology.  Bit by the entrepreneurial bug, they yearn to launch their own business.   With extensive contacts and insider knowledge of their industry, they are in a perfect position to successfully launch a new application or website that serves their niche.

But if the executive is a businessperson, not a programmer, where does he/she turn for technical help?

Unfortunately, the startup world of incubators, accelerators and hackathons is typically geared for young techs, not for seasoned executives. And even though it is the executive whose industry knowledge and contacts can help them successfully introduce a good product to the market, there is not a well known avenue to help them make their dreams a reality.

Following is an overview of the various routes an entrepreneurial executive can take to launch his great idea.

1.      Find a Technical CoFounder.

The most famous route is for two buddies to start a new tech company in a garage, one of them with programming chops, and the other, while versed in programming, focuses on the business side.  In reality, however, unless the two partners are long time childhood or college buddies, it typically never works out this way.

In the real world, the programmer will be reluctant to partner up with the other ‘on the come’, since to him, it is just code, just like any other project.  And since most projects fail because of a lack of execution on the business development front, the engineer will be reluctant to subsidize his partner’s dreams for free.

Thus, while in theory an entrepreneur can find and recruit a technical cofounder, it is not likely that he can convince him that his programming code will be better by doing it for free with him than by doing it anywhere else.  Or, if you do find a technical cofounder, in many cases, his day to day needs often requires him to do your project on a moonlighting basis, making it take a back seat in priority.

 2.      Hire an Established Agency.

There are many very competent digital agencies with strong developers and good project managers.  However, more often than not, the end product is not what you initially envisioned, or is, but at a much higher price.

Even if they are truly talented (and you will pay a premium for their services, they need to eat too), their job is to produce code by the hour or for the project.  They are not incentivized to creating the best product in the first instance, or to tell you what the Minimum Viable Product (MVP) should be, or which enhancements should be made, whether now or in the future.  Moreover, once the first version of the product is complete, you should expect that constant improvements, upgrades and changes will need to be made to the product based on customer feedback.  At $75 to $125+ an hour, these changes can add up very fast.

It is not unusual for a final product to run $75,000 or $100,000 or more, and that product may or may not even work as intended.

 3.      Hire an Offshore Provider.

This is perhaps the most seductive, yet most perilous option.

The theory is that because there are thousands of programmers around the world where incomes can be much lower, that outsourcing programming costs for $20 or $30 an hour is an excellent alternative to the high domestic billing rates which can run $125 an hour an up.

Unfortunately, the ability to do basic programming, and the ability to create flawless, sophisticated products that are marketable in a competitive environment are two very different things.

Indeed, if you hope to generate any significant revenues from your app, it must be cutting edge, elegant and flawless. The reality is that the track record of a nontechnical executive being able to develop any widely marketable technology by offshoring the programming is dismal.  (they can be useful when used as part of a team led by experienced project managers, however).

4.      Partner Up

The most effective approach, and least common, may be a combination of all of the above.

By partnering up with a best in class agency with the majority of their upside tied to the market success of your project, you can avoid many of the pitfalls of getting your product completed while ensuring the ongoing support that you will need.

While most firms are reluctant to work this way, a few entrepreneurial groups are open to charging just enough up front to cover their costs, then partner up with you on the product launch, marketing, and ongoing support.  This arrangement better aligns the incentives of all parties, leaving the focus of a decision on substance: are they best in class, can they provide ongoing support, can they help get the product to market?

Then What?

Another big decision in who to work with in getting your product developed is by asking yourself, ‘ok, I have a product, now what’?

The reality is that once a product is market ready, the challenge has just begun. Most products fail because of a lack of marketing and distribution.

Moreover, a final product is just version 1.0 at best, with ongoing refinements, bug fixes and, possibly an entire overhaul required as customer feedback is provided.  Consequently, not only should you plan on a significant budget (and time) commitment for business development, you also will need to expect substantial ongoing changes to your new product.

Unfortunately, agencies and offshore providers are paid by the hour or the project.  So once the final product is complete they are out of the picture unless you restart the clock or bidding process and continue.  In contrast, a partner, remains on board and is incentived to continue to see the product to achieve success.

Following is an overview of the pros and cons that typically must be considered when looking at how to create a new software or app product.