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👨‍💻 How to hire engineers for your SaaS startup

Learn how to hire the 1%

Estimated reading time: 5 minutes

SaaS Strategists,

One of the most important strategies, if not THE most important,

Is how your SaaS will be executed.

Poor execution leads to poor results.

Poor execution leads to 0 ROI.

Poor execution leads to you watching The Social Network on Netflix at 1 AM in the morning, wondering how that Zuck guy made it happen.

Spoiler alert: He stole the idea 💀

Today I’m going to be talking about a topic I can safely say I’m well experienced in.

I’ve interviewed over 200+ software engineers for my SaaS development agency.

Here’s what I learned about hiring high-performing software engineers 👇️ 

Today’s issue of SaaS Strats is brought to you by Nortik Software Solutions

Are you looking to onboard pre-interviewed senior software engineers into your team or build your SaaS startup from scratch?

Nortik has a proven track record of helping their clients build SaaS startups that have raised over $150m+ combined.

They offer a 2-week free trial development period, and if you’re not satisfied with the initial delivery, you don’t pay.

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How to hire engineers for your SaaS startup

So how DO YOU hire high-performing software engineers?

When you start your SaaS journey there is too much to think about:

  • Building

  • Launching

  • Scaling

  • Customer support

  • Operations

  • Marketing

  • Sales

  • Growth

But I’ll tell you the secret formula of success:

  1. You find a reliable software vendor to build your SaaS

  2. You focus on marketing & customers

That’s it.

WHAT?

I thought I was about to learn how to hire!

You are about to learn how to hire.

Whether you’re hiring in-house or outstaffing, you need to have some specifics prepared first.

Let’s get right into it.

01 Define the job role

Before you start the hiring process, make sure you have a clear understanding of what you're looking for in a software engineer.

Define the job role, responsibilities, and expectations.

  • WHAT do you need help with

  • WHAT would be their main responsibilities

  • HOW long will you need help with it

These are the essential questions you should ask yourself.

02 Define the budget

Usually, it will be more costly if you hire in-house than if you leverage outsourcing.

What do I mean by this?

When you outsource, you have the ability to give a 30-day termination notice & not have to worry about overspending on engineers if your product is in the marketing phase.

But first you need to understand your budget.

Take a look at your product timeline.

Take a look at how many features you have & how many months that will take.

1 month has approx 168 working hours.

Multiply that by your expected hourly rate for an engineer.

Multiply that with the number of engineers you would like to onboard.

Viola.

You have yourself a monthly engineering budget.

And keep in mind:

You could onboard a remote engineer for 50% less yearly compensation than in the US for example.

You just need to know where to look.

03 Search agencies & developers from Eastern Europe

Eastern Europe tends to have one of the best software engineering universities in the world.

They provide the best value for money.

There’s a reason why they are the world’s biggest outsourcing center.

Every year around 10-20k talent is released from every university.

On average Eastern European countries have around 300,000 software engineers.

If you’re targeting the 1%

That leaves you with a pool of ~3000 top-tier engineers from every country to choose from.

Places like Clutch.co, Pangea.ai or Toptal.com can be your go-to’s for hiring software engineers.

You can also take a look at the sponsor of our today’s newsletter & their recent offer 👀

04 Test their technical & soft skills

Now we jump into the part of HOW to actually be sure you’re going to hire a high-performing software engineer?

I’m a strong believer that you’re no true software engineer if the ratio between your technical and your soft skills isn’t around 60/40.

Technical skills are important, yes.

BUT.

It’s better to have a decent software engineer with good communication skills.

Than a great software engineer that is a bad communicator.

Good communicators understand your needs & what needs to be built.

Essential for building a strong engineering team.

When it comes to testing their technical skills it’s usually best to stick to proven templates on specific technology.

You can find them online by googling:

‘Intermediate & hard [TECHNOLOGY] interview questions’.

Another way is to ask ChatGPT to construct a set of 10 theoretical & 2 problem-solving questions.

Problem-solving questions are important in order to see that initial thinking pattern.

Seeing that the engineer you’re interviewing is moving in the wrong direction from the start can be a big red flag since it can mean that he/she doesn’t understand the core business logic or problem-solving logic.

This really depends on the situation, but usually, the initial direction the engineer takes in order to solve a specific problem will impact how the rest of the development will play out.

As for the soft skills, try going with the following:

  • Describe the biggest problem you faced in your career, how did you approach solving it at first, and how did you actually solve it.

  • Situation: The client wants to add a new task to an ongoing sprint. You are on a short deadline. How would you handle this situation?

  • Give an example of when you had to work with someone who was difficult to get along with. How did you handle interactions with that person?

  • Tell me about a time when you were asked to do something you had never done before. What did you learn?

  • Tell me about a time when you had to juggle several projects at the same time. How did you organize your time? What was the result?

These questions can spark topics such as:

  • Adaptability

  • Culture add

  • Leadership

  • Collaboration

  • Growth potential

Tricky & “out of the box” questions you can try out:

  • Why shouldn't I hire you?

  • How would your manager describe you? And how would your best friend describe you?

  • It's 12 P.M. one year from now. What are you doing?

  • It is better to submit a project that's perfect and late, or one that's good and on time?

05 Task them

Also, a popular method in the world of software engineering interviews is providing a take-home or live-coding exercise.

The goal is to have 48 hours to deliver a specific task.

Or just develop the solution on the spot.

Both have their pros and cons.

I recommend doing this technique if you’re a technical founder yourself.

Tasking an engineer with a specific problem can give you a first-hand insight into their problem-solving process.

If you’re not technical yourself, maybe you can skip to the next step.

06 Look for continuous learners

Our world is everchanging.

Technology is everchanging.

So are software engineering practices.

One of the big ideas I’m a preacher of is:

Adaptability is more important than your skillset.

It’s always good to have a team member onboard that adapts to new technologies and trends fast.

With the rise of AI, it’s only a matter of time before specific industries will go extinct & get replaced by robots entirely.

Make sure you & your team are prepared.

07 Look for 3-7 years of experience

Usually where the “expertise” factor starts to kick in.

Engineers below 3 years still have much to learn.

Engineers above 7 years can be too expensive.

That’s why you should aim to hire engineers that fit this experience span.

Hope you found these methods useful & that you will utilize them next time you begin your search for software engineers.

I encourage you to check out the official sponsor of this newsletter - nortiksoftware.com and the offer they provide.

80 hours of free development & if you’re not satisfied you don’t pay.

If you’re looking to hire highly adaptable software engineers that worked with companies such as ProSieben, Wonderdynamics, Helbiz, and FIGS, head over to nortiksoftware.com & book a free discovery call.

🔝 Top Tweets

Here are the 2 top tweets from this week:

🔥 SaaS Fire

SaaS products so good they'll light up your week:

Upvoty is a feedback-gathering tool that helps you gather, organize & analyze feedback from your users in order to make smarter decisions.

EmailOctopus, or previously Look at that SaaS is a marketplace for email marketing templates.

💡Idea of the Week

Here’s the SaaS idea of the week:

Employee Vacation Management System that helps businesses track and manage employee information, including sick leaves, vacations, and more. The software uses AI to automate the process of tracking employee absences and automatically generate reports for managers.

Pros

  • Improved productivity: By automating the process of tracking employee absences, managers can focus on other tasks and improve overall productivity

  • Enhanced workforce planning: The AI feature of the software predicts when employees are likely to take a sick leave or vacation, allowing managers to plan ahead and ensure that they have adequate staffing levels

Cons

  • Privacy concerns: The AI feature of the software requires access to employee data, which may raise privacy concerns among some employees

  • Potential errors: While the AI feature of the software is designed to predict employee absences accurately, it may not always be correct, which could impact workforce planning

Hope you enjoyed this week’s issue of SaaS Strats & learned something new.

Feedback means a lot to me, so I would definitely like to collect yours:

How did you like this week's issue of SaaS Strats?

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Let me know what topics would you like to see more of.

I’ll see you next week.

Ognjen Gatalo

Chief SaaS Strategist ☁️ 

P.S. If you know someone that’s hiring software engineers, forward them this email.