startup life and the dangling carrot

Startup challenges: the anatomy of frustrating obstacles

February 15, 2013
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dangling carrot startup Startup challenges: the anatomy of frustrating obstacles

The earliest days of a startup

As a startup, one of the first questions to ask is how you can put your idea in motion? I am not an application developer and I don’t know how to code. I am, however, constantly poring over startup blogs which share a consistent theme:  many startup founders are programmers themselves. This can be a little deflating. Mistakes are inevitable as a startup, so I thought I would share a less than desirable experience as it relates to outsourcing your code to a development team.

NuHabitat, the company I founded, started from the need to create greater transparency with real estate data for the consumer. After all, I live in a non-disclosure state, making access to data more restrictive. In order to accomplish the goal of creating an application to provide this data, I would obviously need a code team.

Outsourcing development, building the team

My initial approach was to outsource my development. I live in Houston, and you would think there are many great companies to help a startup articulate, nurture, and develop a web application. I didn’t find that to be the case and was forced to look elsewhere. I considered a team in Austin. I also flew to San Francisco and met with a group there.



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While these are hubs for software development, there was something appealing about a local team that I could meet with in person. I continued looking, and also realized I would have to increase my budget just to get a minimum viable product (MVP) out the door in Houston.

After interviewing several local companies, I selected one that I thought would be a team player. They had “the” process.

First up is the discovery process

It would cost me $12,500 to get started. We would first conduct “discovery.” This would clearly articulate my idea, flesh out the consumer experience and help to organize the process going forward. At the conclusion, I would be left with a tangible set of deliverables that I could take anywhere and effectively have a team code the application based on my documentation, however, in my case, I would need to take the finished deliverable and immediately raise money. This would prevent me from going straight to development. All parties were aware of the arrangement.

Within a week after completion of our discovery process, I was being asked if I was ready to start to the tune of $80,000 to reach a first milestone and MVP. Trying to raise money for a startup idea is not an easy proposition and certainly not in a week’s time.

After several weeks, I realized no one would make an investment in just an idea, so I would need to put up the amount needed to get started. It made sense to get something going and for me to have skin in the game to attract others.

Major hiccup: they are suddenly too busy

Unfortunately, when the time came to get started, my outsource team said they weren’t available to start developing my project. That was a shock. I had been waiting for over a month to now be set back again. I was quite disappointed, as I had been in communication with my project manager and didn’t understand the situation. The explanation was they had become too busy, but they were going to make this right.

In order to do so, they would be working in partnership with another group of developers they were bringing in to help with my project, as well as others, since they were not able to start as a miscalculation of time. It sounded good in theory.

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As the leader of NuHabitat LLC, Jeff brings a unique qualification to the table with 10 years experience of buying and selling homes as a high-end luxury homebuilder while working with clients, agents and brokerages. Motivated by a unique set of circumstances, his goal is to provide a more efficient and economical approach to prospective home buyers and sellers in the modern day world of residential real estate.