There’s a better way to spend your hiring budget

There’s a better way to spend your hiring budget. This strategy is for those businesses that are building something new. A product that’s backend heavy. Maybe it’s AI. Maybe it’s fintech or healthtec or proptech.

It’s a simple strategy based on a simple insight – you want to hire the best people in the market you can afford to focus on doing the novel, hard work of turning your idea into reality. 

Here is the game plan:

1. Focus your hiring budget on backend expertise
2. Consider no-code tools for your MVP
3. Use a team extension for frontend development
4. Scale up gradually with funding/revenue milestones

Let’s see how this might work out in practice using a fictional startup we’ll call SmartSpend. SmartSpend is planning to build an AI-powered personal finance service that analyses your spending patterns and generates personalised financial coaching.

The Core Technology Challenge

SmartSpend’s competitive advantage will be in their proprietary AI stack that will predict spending behaviours and provide actionable financial advice. Building the AI stack requires deep expertise in machine learning, AI, and financial data processing. This is where the founders want their best talent, preferably experienced engineers who’ve built similar systems before.

The user-facing part of SmartSpend – the web application – is an essential component, but unlike the backend, it is well understood. The interface needs to be polished and professional, but it will be built using established frameworks and patterns. We’re talking about standard authentication flows, common UI patterns for financial apps, and well-documented API integration approaches.

This is perfect territory for a team extension, where you can get qualified developers at a fraction of the cost of hiring internally.

The Smart Money Path

Here’s how SmartSpend could implement the game plan:

Phase 1: MVP with Core Focus

• Hire two senior ML engineers and a data scientist internally
• Build the core AI engine and API
• Use a low-code solution like Retool, WeWeb or FlutterFlow for the initial interface.

Phase 2: Post Initial Traction

• Keep core team focused on improving the AI engine
• Engage a team extension service for proper frontend development
• The two teams communicate but operate in parallel
• Team extension means you keep all product management in-house

Phase 3: Scale with Funding

• Expand internal AI/ML team
• Keep frontend development with team extension
• Add specialised internal hires for specific challenges
• Grow their team extension with devops roles

The Numbers Make Sense

Let’s break down a hypothetical budget for SmartSpend:

Internal Hires (Annual):

• Senior ML Engineer: $180,000 × 2
• Data Scientist: $150,000

Total: $510,000

Team Extension (Annual):

• 2 Frontend Developers: $60,000 × 2

Total: $120,000

The difference in cost between internal hires and a team extension leaves SmartSpend with more cash to protect their investment in the core team through bonuses, matching offers, etc.

Why This Works

This strategy works for SmartSpend because it concentrates resources where they matter most. Their core team focuses on the challenging aspects of their product – the AI models, data processing, and financial analysis algorithms. Meanwhile, the frontend development, which follows well-established patterns and practices, is handled cost-effectively through a team extension.

The approach also reduces risk through flexible scaling. You can start with a low-code solution to get your MVP out quickly, then transition to a custom frontend as you prove your market fit. Through the entire process you’re remaining competitive in the talent market while maintaining momentum. 

Making It Work For You

This strategy isn’t one-size-fits-all, but it works well for businesses where the core value proposition relies on complex backend technology and the frontend needs are relatively standard. For SmartSpend, success depends on their AI models and financial analysis – not on reinventing how users interact with their data.

Start by identifying your core technical challenges and hire the best people you can find to solve them. Then, build around that core with flexible, cost-effective solutions for everything else. Remember, you’re not just saving money – you’re optimising your resources to give your business the best chance of success where it matters most.

If you like talking strategy or might be thinking about how a team extension could impact your business, get in touch. We love chatting about this stuff.