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At a larger company paying a contractor/consulting firm makes more sense, because they want to be able to scale down easily. If a startup wants to scale down i
by ig1 15y ago
At a larger company paying a contractor/consulting firm makes more sense, because they want to be able to scale down easily.
If a startup wants to scale down it normally means the startup has failed, at which point you might as well have employees.
There's also the issue of funding, if the startup has raised VC money the VC will want the startup to build a team and thus a sustainable business. You don't get that with contractors, the only reason that a startup might favour a contractor is if the contractor is substantially cheaper.
- webteam 15y agoI appreciate your candid response. I'm interested in the logic applied by VCs - "employees == sustainable business, contractors == not a 'real' team". I don't get that - an employee is just as free to leave and do something else as a contractor is? In some cases, it might even be easier for an employee (contract terms and whatnot). What exactly is the benefit? Anecdotes != Data, but some of the best start up employees I know started off as contractors initially.
- tlack 15y agoBut contractors are often working for many customers at one time. If one of those customers has a large project, it will affect the time available for the rest of the contractors projects.
- webteam 15y agoWe would generally only work for one customer at a time, otherwise we're just spread too thin. But yes, I guess the concentrated time is a big issue. Although, a lot of employees (again, anecdotally) also have side projects? Why is that different?
- ig1 15y agoBecause in general employees stick around longer than contractors (even if it might not be true in every case). Plus employee incentives tend to be aligned with staying long term (bonuses, equity, etc.)