How I built and sold a successful startup with fractional hires
6 fractional hires, lessons learned, a successful exit, and a new venture
Praveen Ghanta is guest writing for us today. He’s an MIT grad, software engineer, and successful entrepreneur having exited his company HiddenLevers in 2021. He is now taking his past learnings about part-time and fractional work into a new venture, fraction.work, that seeks to connect companies to fractional developers.
I seek to spread the gospel of fractional development... ok that's a bit much - but I do seek to normalize the idea, as it's a concept that has served me well both as a developer and later when hiring developers.
My time as a fractional developer began in 2007 - I had moved from NYC to Atlanta, and in the process lost access to the lucrative Wall Street-focused technology jobs there. In that market I was able earn a premium as someone with both technology and investment finance knowledge - but my finance knowledge had far less value in Atlanta. Looking for positions in Atlanta at that time, it became clear that I'd have to rely on my technology skillset.
I found a position with Oracle (initially BEA Systems) on a technology "swat" team that was sent in to close critical enterprise deals by doing on-site development work. I'd often find myself at tech "bake-offs" where a competing team was right next door; it was exciting, but the job overall consisted of one intense week per month, with the rest of my time largely unoccupied (and working from home). I did well in the position and received above average bonuses, but I quickly saw there was no real promotion path beyond my role. I like to think of myself as a 10x developer, but no employer, Oracle included, would pay me 2x for my work even if they won every deal I touched. So what was I to do, as a senior developer making substantially less than at my last NYC job, and yet with ~30 hours per week on my hands? If lots of hard-working people juggle 2-3 physical jobs just to make ends meet - surely I could pull this off in front of a computer?
In January 2007 I decided to apply for contract development positions. This was in the era before universal remote work, so when I started a contract at Air2Web (an ATL-based SMS startup), I timed my start date so that I'd have three weeks at the office. I impressed them with my work and got code into production in the opening weeks. When I next had to fly on behalf of Oracle, I told them “I have other responsibilities, and I need to be gone about one week a month. I can work evenings on those days, and make it work. Does that work for you?” Air2Web said yes, as they didn't want to lose a now-proven consultant! And so it began - I juggled those two roles, and a similar split between Oracle and ATT thereafter. I spent three years doing this before the startup bug bit me, and I started working on HiddenLevers.
Looking back, how did it work out for both sides?
🏢 Key Benefits for Employers:
- All of my employers were happy with my work, and I received positive reviews and above-target bonuses throughout my time working fractionally.
- My primary employer, Oracle, would have lost me years earlier had I not started fractional work, as I likely would have pivoted toward founding a startup sooner.
- My fractional employers were happy with my work and kept me on for years despite the fact that my daytime schedule with them was preempted 25% of the time.
- My skills were sharper for all employers, as I got to see how multiple companies (in non-competitive fields) attacked similar problems.
👨💻 Key Benefits for Developer (me):
- Oracle was paying me full-time for what was effectively surge capacity. The day-to-day reality for me was boredom, and through my fractional work I was able to put my surplus time to use and stay sharp.
- I couldn't get paid 10x for being a 10x developer - frankly, it was hard to be paid more than 20% beyond my official target. By taking on fractional work, I increased my take-home pay substantially, which later enabled me to start a company 100% bootstrapped.
- While juggling the roles might seem complex, I made the constraints clear to my fractional employer early on. That mutual understanding underpinned success. While there were occasional spikes in load that made me busy, it was worth it on the whole.
A few years later when I began to get traction with HiddenLevers, I needed development help - and I turned back to the idea of fractional developers.
Building a team with fractional development talent
Up to that point, we had a one-person dev team (me) and a one-person sales team (my cofounder Raj). We needed more capacity, and after working with interns in the summer of 2011, realized we'd need to invest further.
How could we get senior development talent on our team without funding? How could we get senior talent without substantially diluting our equity stakes? Those questions, combined with my personal experience, led to a natural answer - let's get a fractional senior developer!
We had an immediate need for a senior integration developer, as HiddenLevers was just then beginning to integrate with software partners in the wealth management industry (firms like TD Ameritrade, Fidelity, Orion, Tamarac, etc).
In my experiences as a fractional developer, I had met others with a similar mindset, and I was able to hire one of them as HiddenLevers' first fractional dev. Our initial fractional hire was a huge success - over a period of 9 years this single developer completed and maintained 25+ different integrations!
We continued to build our dev team fractional-first, hiring our future CTO as a fractional developer initially. We also built out the development team with full-time junior and mid-level hires, as junior developers needed more mentoring, but could help build out the core of the team once we'd invested in them.
By late 2020 we had built a complete software development team with a full-time CTO, six full-time developers, and five part-time software developers. We leaned into the fractional model, using it to help staff our product management and marketing functions as well! Our use of fractional resources was instrumental in staying efficient and profitable, which helped drive our successful exit in early 2021.
All the part-time software development hires I made at HiddenLevers:
- Senior Integration Developer: He stayed with HiddenLevers for 9 years, while switching full-time positions twice during that time. He worked 20-30 hours per week throughout.
- CTO: Our CTO was initially hired as a half-time senior full-stack developer. He was coming back to the working world from being a stay-at-home Dad, and the fractional-to-full-time path worked well as a flexible transition.
- Senior Front-End Developer #1 : Joined the team and contributed 20 hours per week through HiddenLevers' acquisition and beyond, as he is still contributing to the product post-acquisition by Orion.
- Senior Front-End Developer #2: Contributed major front end components over a period of about 18 months, but perhaps bit off more than he could chew, and eventually wrapped up his time as a fractional developer.
- Senior Full-Stack Developer: We tried to work with a senior full-stack developer who had a full-time in-office job. Despite his motivation to do the work, we just couldn't get our schedules to sync and I was tired of meetings at 9 PM, so we decided to end this trial.
- QA Engineer: Our team needed to invest in QA automation, and we found a talented QA Engineer who was available for a 0.6 FTE schedule. We had to smooth out some kinks in communication, but our QA engineer was able to modernize our automated testing framework and integrate it with Slack and other endpoints. She continued to contribute post-acquisition as well.
👍 What Worked Well For Me in Fractional Hiring
- Gaining access to senior talent that is otherwise out of budget or unavailable in the market
- Adding discrete skillsets to a development team, particularly skills where a full FTE may not be needed
- Integrations between systems were particularly well suited to the fractional model
- QA engineering was also well suited to the fractional model
- DevOps and database management proved well suited from my experience
- Front-end component work and building large volumes of pdf report output was also a big fractional win
- Turnover was very low, with developer-initiated turnover at zero over a 9-year period.
📖 Lessons Learned in Fractional Hiring:
- Unrealistic schedule expectations. If a developer has a full-time in-office role, it's highly unlikely to work. They can do the work on nights and weekends, but you won't have enough communication overlap to get the model to work unless you're willing to do those calls at night.
- Core Tech + Self-Management Skills. Ensure that developers have both the technical skills and the ability to self-manage, as they will be working independently. The ideal candidates are senior developers who might lead a team by day, but who want to keep their development skills sharp through a fractional position.
- Fractional roles can work for core IP, if…. Fractional positions can work for virtually every part of a software team, but core IP can be most challenging. Developers responsible for the core business logic of your system need to work closely with Product Management in real-time. If a developer brings vertical industry experience or is available for 30 hours/week, there’s still a path to success, but you have to plan for a tighter relationship with product management.
These blog posts originally appeared on the fraction.work blog as two separate posts (part 1 and part 2). If you’re a developer interested in fractional or half time roles, fraction.work could help you find that job.
And if you haven’t already, check out our new podcast and YouTube channel!