A while back I outsourced the development of a .NET application via a freelancing site. I then marketed the software on a small scale to test its commercial viability. Sales were promising, and the feedback and insights I got were great. I'm now at a point where I'd like to make some improvements and upgrades to the software and market it more aggressively.
I'm not sure what to do at this point. I can generate steady sales for the software but I don't feel right marketing it heavily without someone to fix and improve things. I'm also not in a financial position to hire a programmer on staff for the project. The software is pretty niched but has a proven market. The profit potential isn't massive but is at least mid/high 5 figures within months and 6 figures is very possible as well.
The software is not overly complex but is not super simple either. I know I have this opportunity in front of me, but I'm not sure what to do to make this happen.
I don't want to go the freelance route for further development, if I don't have to. I would much rather have someone working with me as a partner on the project splitting the profits. This would make bug fixes and improvements much easier.
I understand the dilemma for developers in such a scenario. I want to figure out how I can create a situation that's both safe and appealing for a potential programmer & myself. Do remember I'm not having someone create anything from scratch or help me test an idea. I've tested the idea. Whoever I would be working with would have access to the source code for an existing product that is profitable. They could screw me just as much as I could screw them.
Also while I want a situation where there is no upfront cash exchanged, I can have my partner receive their profit portion for every sale directly into their paypal account in real time. There is a JV feature with the payment processing script that allows instant profit sharing via paypal's adaptive payment system.
Alright, let me start with the negative.
From a tech's point of view - we get lots of offers of great ideas to get involved with, and they almost universally suck. Maybe they require an insane amount of time, or breaking of one or more laws of physics, or they have no chance of making any money, or it's in a field I know absolutely nothing about. Sometimes just plain daft.
I've had friends, colleagues, random people from the internet approaching me with brilliant ideas for ventures, and I've used up time and energy considering and investigating some of them. Remarkably they often seem to be built on the premise that it will be the next Facebook/Google/Twitter and my minority (strange that) shareholding will make me a billionaire (when we inevitably get 5m pageviews daily). So if another one happens to come along, no matter how good, I'm extremely jaded towards it from the get go.
Also take a look at Ryan's answer to a question here, and the links he gives: http://answers.onstartups.com/a/34739/8784 Now then, you actually seem to have gone a good distance to at least have an open conversation with most programmers, in that you have a prototype, which has generated sales and is generating ongoing interest. I know nothing about your niche or market of course.
I would suggest you have something short and easily digested that documents your niche, your experience and knowledge of that market, your prototyping and sales, and figure out a deal that is a combination of sales and equity. Give them an opportunity to see the prototype. This at least should give you a fighting chance of having an open conversation with some people. From there it's the usual case of finding someone compatible that you think you can work together with.
First priority though, I think, is breaking past that cynical filter :)
IMO, taking on a partner is a VERY serious proposition. I belong (and have belonged) to several CEO groups over time, and the biggest problem that I have seen these CEOs have is partnership nightmares. Picking a partner is as serious as picking a husband or wife. You are stuck with this person for the life of the endeavor, and they can make things very difficult for you and kill your baby.
Another thing to note is that equity is the MOST expensive way to purchase talent. You have a profitable product with a proven market. Your company is actually in a somewhat advanced stage, even though sales are low (for now). You'll be happy if you can figure out a way to get to the next step without giving up any ownership.
Note that you will need more than just development, you'll also need support, since as the software complexity grows, so will the difficulty of the support.
You might be able to find a freelance developer or development house who would be willing to take on your project at risk. In other words, put some amount of time, per week, into developing and supporting your application, and you'll pay them a (probably inflated) rate out of proceeds, say 50% of the take until they are paid off. Make sure you leave enought for yourself so that you can stay motivated to dig yourself out of the hole. Then, you can negotiate an ongoing rate for support. If you are madly in love at the conclusion of all that, then it might make sense to take them on as a partner.
You might also look into this guy :):
From a developer standpoint it is far fetched to see myself or other developers jump on someone else's idea (especially a stranger's) without some type of strong compelling quality the original founder brings to the table besides just an idea, even if the idea has evolved into a prototype. Such a quality would be either a lot of money backing the idea, or a founder with a proven track record to raise money, or in your case proof that sales are growing. Think of developers like investors, you are propositioning that we invest (a lot of) our valuable time into your startup.
All that aside, it's not impossible to find a developer co-founder if you really want one. Some places I'd look would be Founder Dating, or find a Startup Weekend in your city. Other things you could try are joining one of the various .NET developer groups on LinkedIn such as LINDUG or .NET People (I'm a member of both). Just get out an have conversations with developers and eventually you might find one.
I think the other comments have answered your question about partnering with a developer. But if you have confidence in the product why not look for outside investment, loan, re-mortgage or hassle friends and family for cash for a percentage of your product.
Then you could pay a developer to make the enhancements/bug fixes.
From the sounds of it you’re making $54 dollars a week at the moment; as a developer without more information e.g., market research, examples of competitors, projections, marketing strategy it’s hard for me to get involved in your project.
Anyway, good luck with your venture.
You need someone to fix and improve things. If you're not in a financial position to hire a programmer on staff for the project and you don't want to go the freelance route for further development, then you should have someone working with you as a partner on the project splitting the profits. This would make bug fixes and improvements much easier.
To create a situation that is both safe and appealing for a potential programmer & yourself, make contact with an honest programmer and have him receive their portion of every sale directly into their paypal account in real time via a paypal JV feature.
I suggest you look for a person who has the technical knowledge you need and is interested in forming a start-up. Then form a partnership firm in which you are the CEO/President having the controlling/majority percentage in the company and the technical person has something good enough and make him the CTO/Technical Head or something similar. This way he will be part of the company and can't just quit with your source code also you will be able to control all the aspects of the company. You can also put some conditions in the partnership agreement as per mutual requirement.
Good luck :)
Unless you have decieved existing customers, keep selling. They obviously don't have to have the new features to buy. Take the money and hire a programmer. It could take a year to find a good partner who can also code.