Strategic Development: Local Ingenuity or 6PM’s Global Reach?
Why Founders Make the Mistake of Building a Local Tech Team?
Overestimating Local Talent Availability
Competition for Talent
In tech hubs and major cities, the competition for top tech talent is intense. This high demand can lead to prolonged hiring processes as companies compete for the best candidates.
Increased Costs
Due to the fierce competition, salaries and benefits for top talent in these areas are often significantly higher, which can inflate the overall cost of building and maintaining a local team.
Neglecting Regulatory and Administrative Overhead
Complex Compliance
Local teams require adherence to specific regulatory and legal frameworks, which can vary greatly by region. Navigating these can be complex and time-consuming.
Administrative Burdens
Managing a local workforce involves significant administrative tasks, including employment records, tax filings, and compliance with local labor laws, all of which add to the overhead costs.
Underestimating Remote Work Efficiency
Productivity Concerns
Some founders hold reservations about the productivity of remote teams, influenced by traditional views on workplace dynamics.
Cultural and Time Zone Differences
There is often a concern that remote teams might face challenges with cultural integration and coordination across different time zones, potentially leading to inefficiencies.
Comparison Between Local Tech Team & 6PM
| Aspect | Local Tech Team | 6PM Model |
| Cost | High costs with an average engineering salary of around $150,000 for a single developer, before benefits and taxes | Reduced costs due to fractional CTO and offshore team, avoiding full-time salary expenses |
| Tech Strategy | Often lacks a cohesive tech strategy without a CTO | A fractional CTO crafts and oversees a cohesive tech strategy |
| Team Cohesion | Challenges in building a coherent team | Assembles a synchronized team, ensuring cohesion even if remote |
| Project Focus | Team members may divide attention on multiple projects | Ensures the project is the main focus, promoting dedication and unity |
| Leadership | Requires hiring a full-time CTO for leadership, adding to costs | Provides the leadership of an experienced CTO in a cost-effective, fractional manner |
| Customization | Limited by the local talent pool and their expertise | Tailored tech team assembly based on project needs, offering greater customization |
| Strategic Insight | May lack strategic insight without a dedicated CTO | Fractional CTO brings strategic insight, guiding tech efforts in the right direction |
| Cost Transparency | Costs can escalate unexpectedly due to benefits, taxes, and gear | Offers more cost transparency and control, with a focus on efficiency and avoiding waste |
| Tech Stack Selection | Dependent on the local team’s expertise, which may not align with project needs | Fractional CTO handpicks a tech team that matches the tech stack and product roadmap |
| Scalability | Scaling the team can be slow and costly due to hiring and regulatory processes | Facilitates easier scaling of tech capabilities as needed, without the overhead |