Category: Agency

  • Why Remote-First Companies Can’t Hire Just Anyone

    Why Remote-First Companies Can’t Hire Just Anyone

    During the COVID-19 pandemic, many companies transitioned to remote work. As we move forward, it’s crucial to acknowledge a fundamental truth: remote work is not suitable for everyone, and understanding this is key for both companies and employees.

    Initially, many organizations, lured by the flexibility of remote work, tried to adapt wholesale to this model. However, it’s becoming increasingly clear that remote work’s feasibility varies greatly depending on individual circumstances and preferences. For some, factors like living arrangements, family responsibilities, or personal work style make remote work impractical or even stressful.

    Consider the situation where someone lives in a small space with a young child and part of the company’s communication happens via video calls. Neither can the company, in the long run, make an exception for one person, nor can this person keep waking up their small child with conversations. This scenario highlights that the suitability of remote work varies based on individual circumstances.

    From a company’s perspective, the challenge is not just about implementing remote work but also about recognizing when it isn’t the right fit. During recruitment, it’s imperative for companies to discern not just the professional capabilities of candidates, but also their compatibility with a remote working environment. Hiring someone who can’t or doesn’t want to work remotely can lead to long-term issues, such as reduced productivity, strained communication, and a diluted company culture.

    Therefore, companies need to be more discerning in their hiring process, considering not just the skills and experience but also the suitability and willingness of candidates for remote work. This approach will prevent potential problems that could arise from forcing a square peg into a round hole.

    While acknowledging these challenges, it’s also important to recognize that for the right person and the right role, remote work can offer unparalleled flexibility and efficiency. The era of remote work demands a new kind of awareness from both employers and employees. Recognizing and respecting the limitations and suitability of remote work is essential. It’s not about forcing a trend but about finding a harmonious balance that benefits both the company and its workforce.

  • Software Development Agencies: The Transition from Body Leasing to Consulting

    Software Development Agencies: The Transition from Body Leasing to Consulting

    In the world of software development agencies, significant changes have been taking place for some time now. One of these changes is the pursuit of generating satisfactory margins. Broadly speaking, there are two extreme approaches: the lowest possible costs resulting from straightforward body leasing, and the provision of added value in the form of consulting. In the latter case, software creation is somewhat an extension and development of the consulting service, an implementation of the conclusions drawn from the consultations.

    This is an enticing path because consulting activities have a much higher potential for margin as they can be billed at higher rates and without a simple hourly settlement. It’s therefore not surprising that most software development agencies are opening consulting departments and trying to position themselves more towards advisory firms. However, there is one problem that is regularly visible in this approach – the quality of the consultants.

    Let’s be clear, it’s relatively easy to prepare workshops where the agency’s team helps the client articulate needs and gather requirements. This often has immense value for the client and is much needed. The real challenge begins when it’s time to present the client with recommendations. When a consultant needs to look at the issue from multiple angles and propose a solution, being aware of the trade-offs of the given solution (because there always are).

    What unfortunately often happens is an excessive focus on the technological part of the recommendation and adjusting the rest of the areas to the technology. This probably stems from the fact that people promoted to consultants have a technical past, for example, they were once programmers. In line with Charlie Munger’s quote, “to a man with a hammer, everything looks like a nail.” This leads to an abstract situation where business is bent to fit the technology, not the other way around. It’s forgotten that most often, technology is meant to serve the optimization or change of business.

    Addressing this issue requires agencies to prioritize the quality of their consultants. However, the path to achieving this is not straightforward. It’s clear that consultants need a balanced understanding of both business and technology to be effective. Yet, how to effectively train them and prepare them to be useful partners for clients is a question that remains open. It would likely involve some mix of knowledge acquisition and practical experience, but the exact formula is elusive. I don’t have a ready solution for this, and I won’t pretend to. This is a complex issue that needs more thought and understanding.

    Therefore, in my opinion, if the industry is to develop in the direction of being a partner to the client, advising them and being credible, it is necessary to focus on the quality of consultants. All signs point to the fact that these will be key people both at the stage of acquiring projects and the effects of their implementation. The sooner the industry prepares to advise not only at the low-level technological stage, the sooner it will be able to reach a higher level of rates, quality of clients, margins and, consequently, further development.

  • Redefining Success in Software Agencies: Shifting Focus from Headcount to Specialization in the Post-Pandemic Era

    Redefining Success in Software Agencies: Shifting Focus from Headcount to Specialization in the Post-Pandemic Era

    In the wake of the COVID-19 pandemic, the software agency landscape has undergone significant changes. One of the most noticeable shifts has been the emphasis on headcount, treated almost as the only measure of success. However, as the market has slowed, this metric has proven to be more of a vanity measure than a true indicator of a thriving agency.

    During the height of the pandemic, many agency owners were focused on expanding their teams. The assumption was simple: more people equaled more capacity, and more capacity equaled more success. However, this approach has led to an unfortunate aftermath – layoffs. As the market slowed down, the inflated teams became unsustainable, and many talented individuals found themselves without a job.

    This situation has brought to light a critical error in the industry’s approach: the overemphasis on headcount and underemphasis on the right people. Hiring in large numbers and overpaying for certain specialists was a short-term strategy that has proven to be a dead end.

    Moreover, many agencies that overhired were delusional, subsidizing their expanding bench from previous profits. This led to a paradoxical situation where agencies saw a meaningful increase in revenue but a significant decrease in profit. The illusion of growth, fueled by an inflated headcount, was ultimately detrimental to the bottom line.

    In the post-pandemic era, it’s time for agency owners to shift their focus. Instead of chasing the vanity metric of headcount, it’s time to invest in specialization and niche expertise. It’s about learning how to bring tangible value to clients’ projects, rather than simply trying to lease as many bodies as possible.

    This shift in focus could also pave the way for a much-needed consolidation in the market. The current fragmentation seems unsustainable, and a more unified approach could lead to greater stability and success in the industry.

    The real value in a software agency lies not in the number of people it employs, but in the expertise and specialization of its team members. It’s about finding the right people who can bring unique value to a client’s project, not just filling seats.

    In conclusion, the software agency space needs a paradigm shift. The focus should be on quality over quantity, on specialization over generalization, and on value over vanity. As we navigate the post-pandemic world, let’s redefine what success looks like in our industry.