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Wht are dev shops a bad idea
Wht are dev shops a bad idea
Wht are dev shops a bad idea

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Jan 9, 2025

Why Avoid Dev Agencies (From a Former Insider)

Why Avoid Dev Agencies (From a Former Insider)

The Challenge: Why Building Tech Products Is Really Hard

Building technology products is hard, especially for those with limited experience. While we hear success stories about Instagram, TikTok, Spotify, and Jira, they represent a tiny fraction of the thousands of tech startups launched annually. After ~20 years building tech products, I've observed that the primary reason for failure isn't lack of commitment or innovation—it's running out of capital before finding product-market fit (PMF).

The Traditional Agency Model: A Fundamentally Broken System

When businesses need to develop new products, they often turn to tech agencies to offset internal talent acquisition risks and leverage specialized experience. However, even for the biggest buyers, these relationships come with substantial risks.

The core problem? Tech agencies, dev shops—whatever you call them—are not mission-aligned with their clients. As services businesses with razor-thin margins, agency owners and managers perpetually chase the next deal just to stay afloat. Consider this: the average agency has only 1-3 months of runway.

The Real Problems (Learned the Hard Way)

Around 2013, while running a digital product studio in New York serving clients from startups to major brands like CBS and Cargill, I witnessed these challenges firsthand:

Inefficient Cost Structure

  • Agencies maintain substantial overhead: offices, marketing, sales teams

  • Clients pay 3-5x salary rates for talent to cover these costs

  • Companies with lower budgets often receive subpar work

  • Expensive "bench" talent sits idle between projects

Quality and Relationship Issues

  • Staff context-switch between multiple projects

  • Knowledge transfer between agency and client often fails

  • Initially positive relationships sour due to misaligned incentives

  • Agencies prioritize revenue while clients need capital efficiency

  • No continuity at project handoff leads to expensive refactoring

After selling the business in 2019 and validating these issues across market-leading services businesses, I reached a clear conclusion: organizations should NEVER use agencies or dev shops to produce or refactor technology. The costs and risks are simply too high.

The NoFUD Solution: A New Model for Building Tech Products

Based on these experiences, I developed a new approach focused on helping companies build exceptional technology teams without traditional barriers. The NoFUD model makes it possible to assemble teams that are both technically skilled and culturally aligned, while keeping costs predictable and ensuring talent feels valued and well-compensated.

Core Principles

  1. Direct Access: Companies hire talent directly, eliminating overhead costs. We handle vetting and EOR management, providing dedicated Product Managers, Developers, and DevOps professionals.

  2. True Integration: Team members work as part of the client's business. After MVP completion, the team seamlessly transitions into day-to-day growth and management.

The Benefits: Speed, Efficiency, and Quality

dev speed over time

Development Velocity

  • Faster time to market and MVP testing

  • No switching costs or refactoring delays

  • Better code quality through aligned teams

  • Continuous development without team changes

Cost Efficiency Comparison

dev agency costs vs in house

Productivity Analysis ($1M Budget Scenario)

Dev Agency Productivity

Additional Benefits

  • Flexibility: Options for both fractional and full-time arrangements

  • Risk Mitigation: Solutions for short-term projects and long-term needs

  • Advanced Talent Identification: Proprietary AI and human screening for top global talent

  • Seamless Network Access: Pre-screened candidates available on-demand

  • Simplified Compliance: Comprehensive onboarding and regulatory handling

  • Cost Efficiency: No agency markup

  • No Recruitment Fees: No FUD saves on average 20k+ per employee on talent acquisition.

The Bottom Line

Don't use a traditional agency—it's usually a waste of capital and carries unnecessary risks. The NoFUD "Agency" offering exists to capture those considering the traditional agency path and show them a better way. Your Product Manager becomes your point of contact, and your team truly becomes yours. Whether fractional or full-time, the approach is more efficient, more attuned to your needs, and provides the continuity essential for long-term success.

By eliminating unnecessary overhead and streamlining talent acquisition, NoFUD offers a more efficient, flexible, and sustainable approach to building tech products.

Resources and Insight

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Old recruitment methods

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Discover how AI is reshaping recruitment and how great recruiters can leverage it to dominate while bad ones risk falling behind. Learn more here.

No ghosting on recruitment

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Discover how AI is transforming candidate experiences—streamlining screening, automating communication, and providing feedback. Say goodbye to ghosting!

Source candidates, stay human

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Discover how AI-powered tools are transforming recruitment by automating tasks while keeping the human touch intact. Scale hiring without sacrificing quality.

Resources and Insight

Old recruitment methods

Why AI Won’t Replace Recruiters (But Will Replace Bad Ones)

Discover how AI is reshaping recruitment and how great recruiters can leverage it to dominate while bad ones risk falling behind. Learn more here.

No ghosting on recruitment

AI vs. Ghosting: Enhancing Recruitment with AI

Discover how AI is transforming candidate experiences—streamlining screening, automating communication, and providing feedback. Say goodbye to ghosting!

Source candidates, stay human

How AI Helps Recruiters Source 10x Faster and Stay Human

Discover how AI-powered tools are transforming recruitment by automating tasks while keeping the human touch intact. Scale hiring without sacrificing quality.

Old recruitment methods

Why AI Won’t Replace Recruiters (But Will Replace Bad Ones)

Discover how AI is reshaping recruitment and how great recruiters can leverage it to dominate while bad ones risk falling behind. Learn more here.

No ghosting on recruitment

AI vs. Ghosting: Enhancing Recruitment with AI

Discover how AI is transforming candidate experiences—streamlining screening, automating communication, and providing feedback. Say goodbye to ghosting!

Source candidates, stay human

How AI Helps Recruiters Source 10x Faster and Stay Human

Discover how AI-powered tools are transforming recruitment by automating tasks while keeping the human touch intact. Scale hiring without sacrificing quality.

Resources and Insight

Old recruitment methods

Why AI Won’t Replace Recruiters (But Will Replace Bad Ones)

Discover how AI is reshaping recruitment and how great recruiters can leverage it to dominate while bad ones risk falling behind. Learn more here.

No ghosting on recruitment

AI vs. Ghosting: Enhancing Recruitment with AI

Discover how AI is transforming candidate experiences—streamlining screening, automating communication, and providing feedback. Say goodbye to ghosting!

Source candidates, stay human

How AI Helps Recruiters Source 10x Faster and Stay Human

Discover how AI-powered tools are transforming recruitment by automating tasks while keeping the human touch intact. Scale hiring without sacrificing quality.

2024 © NoFUD Inc. All Rights Reserved.

2024 © NoFUD Inc. All Rights Reserved.

2024 © NoFUD Inc. All Rights Reserved.