On Speculative Web Development Work

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Many web developers, especially Drupal developers (who are in particularly high demand these days), won't touch speculative work, period. With so many options available to us, we can choose work that will pay now over work that might pay some day. Still, not everyone who has an idea has the front money to build it. I have had some luck with speculative web development work over the years, and I thought I'd talk about why I do it and how I choose which projects are worth speculating on.

Not long after I diverted from my former career path to pursue life as a Drupal consultant, I received the following advice from a trusted friend: "Every good independent web developer has a project or two that is their own, besides what they do for their clients." It's turned out that he is right. Good speculative work gives me a chance to build a product I'm really happy with, free of portfolio-harming client compromises and NDAs. It also provides me with important experience following a project through its entire life cycle, so that I can jump into my consulting projects and easily answer "where do we go from here?" no matter what state the site is in. Finally, good speculative work gives me something potentially profitable to do when my consulting business slows down. Instead of having tons of work or no work, I have tons of paying work and a little speculative work to fill in the gaps, which is better than no work!

Despite the potential benefits of developing a few well-chosen speculative projects here and there, there will always be far more demand for speculative development than there are developers available to fill it. I, like every other developer who considers speculative work, must somehow separate the wheat from the chaff. There isn't a formula for a successful project (if there were, we'd all use it and be rich) but here are some key points to consider before taking (or offering) a speculative web development project:

Can I (as the developer) afford to take on this project? If it becomes worth $0, $100k, or $10m how will I feel about my share?

A typical speculative offer from an inexperienced businessperson looks something like this: Alice brings Bob idea and, if he's very lucky, some management or sales skill (none of which matters until there is a product to sell or someone to manage). Bob does all of the development and theming work, provides server resources and possibly graphics. Alice offers Dave 2%-10% interest in the venture. Any developer would have to be insane to accept such a proposal. A typical web start-up with no physical product and a moderate amount of custom development needed will cost $15-$30k in funds, labor, or some combination thereof to get off the ground. Many need more than that. Alice's offer has Bob putting in 100% of that investment (mostly in the form of his labor) for only 2-10% of the profits should the business take off. Meanwhile, Alice risks nothing (having an idea didn't cost her anything) and walks away having either broken even ( 0 investment, nothing to lose) or with 90+% of the profits!

There are some developers who will work with someone coming in with just an idea. I won't, even if I truly believe he/she has the next billion-dollar idea. I don't want to work with someone who has nothing to lose. Having nothing to lose changes the way one approaches a business venture. As the old saying goes, we should all have a little skin in the game. That said, most people with an idea don't want to give 50+% of the venture to their web developer, and few web developers can invest thousands of dollars in development time and other resources in a project from which they will at worst take a total loss, and at best receive only a tiny share of any profits that might come along some day.

What I have found works for me is to take a smaller share of a venture in exchange for a discount on any work performed on the project. This lowers my risk (I can still pay my bills while we get the site running), gets the other participant to invest something (the development money), makes start-up far more affordable for the "idea person", and has slightly better odds than a lottery ticket of getting me a pleasant bit of extra money down the road.

Is this person/group someone I want to work with?

You'll note that I haven't even gotten to evaluating the idea yet. This is on purpose. The idea matters, but it's only one part of the risk/reward equation. I take on very little speculative work -- on average less than one project per year. I'm not going to do work with no guarantee on what the return might be and deal with a giant pain in the rear doing it. I only take spec. work from people I've worked with before. I don't want to partner with someone and then find out he/she is a total crackpot, and I'm stuck with him/her! Whomever I am working with must above all be someone I know I enjoy working with. Who a developer will enjoy working with varies, but some things are (mostly) universally true: we want to work with people who value our work and expertise, and whose skills and expertise compliment our own. We don't want to have to argue with you for hours to talk you out of a flash splash screen or auto-playing audio on the web site. Remember, one of the primary benefits to speculative work (from a developer's perspective) is the chance to build a great product -- the best product we possibly can. In theory, this is exactly why the "idea person" brings in a skilled developer to begin with.

Is the "big idea" here viable?

There's no formula here (or if there is, I don't know it) -- for me, evaluating the "big idea" is tag-team between intellect and instinct. This is not to say that I have amazing business instincts -- if I did, I would have a much more expensive car and a much bigger yard -- but that I can usually tell if something's really hinky. The intellect part of the equation means asking questions like "who is the target audience?" "what is the product?" "how is this different/better than the competition?" "how does this generate income?" "what kind of overhead is involved?" "is there anything out there on which we can gauge the potential success of this project?" and "how will our target audience find out we exist?". Then I think of some other questions and ask them. Again, I must emphasize that I am not a business genius. I do, however, have years of experience watching web sites succeed and fail. If something is way outside my area of expertise, I probably know someone with the knowledge I need to guess if an idea will be worth my time. 90% of the time, when someone offers me speculative work, they either want to identically clone some existing, successful site, or they have a vague idea of making a web site about $something, but have not given any thought to how it will actually generate revenue.

Can my potential partner and I come together on a strategy?

A good idea, without execution, is just a daydream. I don't do handshake deals on speculative projects -- it's too easy to get cheated (or just recall the deal differently) two years down the road when real money starts coming in. Stratagem #1 is making sure that who is putting in what, who is doing what, and who is getting what out, are all down on paper. We also need things like a working budget, a strategy for promoting the site, etc. Hash out the basics early on, when the cost for walking away is minimal to none. Make sure everyone has realistic expectations.

What happens if it all goes south?

If I can't handle a project failing, I shouldn't be speculating on it. Of the four speculative projects I've taken on in the last few years, one was a total loss, one made me slightly more than I'd have made billing normally for the time spent on it, and two have futures yet to be seen. The one that was a total loss financially, ironically, is the one from which I've taken the biggest gain. I was very new to the business world, essentially fresh off the farm where I grew up, and what limited experience I had was working for the military and a military contractor -- which are a world all their own. Working on a venture capitalist (word I didn't know before this project) funded project with a business-savvy partner was very educational!

Posted on July 07, 2010 View Comments

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