How a Solo Founder Built a SaaS With a Tiny Team of Contractors

**Fexingo** (0:01)
So today, I want to talk about a question I get from first-time founders all the time. Should you hire contractors or full-time employees when you're bootstrapping your SaaS?

**Lucas** (0:11)
And I bet the answer isn't always contractors or always full-time. It depends on where you are.

**Fexingo** (0:17)
Exactly. But I think there's a strong case for starting with contractors, especially before product market fit. Let's look at a concrete example. There's a founder I follow, let's call him Alex, who built a project management tool for remote teams. He launched it solo, no co-founder, and got to about $8,000 in monthly recurring revenue with just three contractors.
A freelance designer, a freelance developer, and a virtual assistant.

**Lucas** (0:46)
Three contractors. That's a tiny team. How did he manage that without a full-time CTO or a co-founder?

**Fexingo** (0:54)
So, he was the main product person. He defined the specs, did the QA, handled sales, and support himself. The developer was a senior freelancer he found on a platform like TopTel, billed at about $80 an hour.
The designer was a local freelancer he'd worked with before, and the VA was in the Philippines handling customer emails and some light admin.

**Lucas** (1:17)
$80 an hour for a developer sounds expensive for a bootstrapped founder. How did he afford that?

**Fexingo** (1:23)
He didn't use them full-time. He gave them very focused chunks of work. The developer did maybe 10 hours a week building features, the designer did five hours a week on UI tweaks, and the VA was part-time about 20 hours a week.
His total monthly contractor cost was around $4,000, which he covered with the $8,000 in MRR. So he was profitable from month one.

**Lucas** (1:47)
So the key is keeping contractors on a tight scope, not treating them like full-time employees with unlimited availability.

**Fexingo** (1:55)
Right. And that's actually the hardest part for many founders. They think, I'll just hire a full-time developer and get them to build everything. But full-time employees come with overhead, payroll taxes, benefits, paid time off, and the expectation of steady work. If you're still iterating on product market fit, you might need to pivot and suddenly that full-time developer is building features you no longer need.

**Lucas** (2:22)
And you're paying them anyway.
With contractors, you can stop a project or pivot much more easily. You just don't give them more work.

**Fexingo** (2:31)
Exactly. Now there are risks. Intellectual property is a big one.
If you don't have a solid contract that says the work product belongs to you, the contractor could reuse it for another client. Alex made sure to have a work for hire agreement in place for every contractor.

**Lucas** (2:49)
And non-disclosure agreements, too, I assume. Especially if they're seeing your roadmap or customer data.

**Fexingo** (2:56)
Yeah, NDAs are standard, but the IP assignment clause is the most important. Without it, you might not actually own the code or design your contractor wrote for you.

**Lucas** (3:07)
What about communication? If you have three contractors in different time zones, how do you keep everyone aligned?

**Fexingo** (3:15)
Alex used a daily async stand up via a Slack bot.
Each person posted what they worked on, what's next, and any blockers. Then once a week, they had a 30-minute video call. That's it. He said the key was writing very clear specs. If you're not a technical founder, you have to invest time in writing detailed requirements so the developer doesn't have to guess.

**Lucas** (3:38)
That sounds doable, but it also sounds like a lot of management overhead for one person. How long can you sustain that before you need a full-time hire?

**Fexingo** (3:48)
That's the million-dollar question. For Alex, it worked for about 18 months. Then his MRR hit around 25,000, and he was spending too much time managing contractors. The developer was still hourly, but the complexity of the codebase meant every new feature required more handholding. So he converted that developer to a full-time employee with equity.
The designer stayed freelance because the design needs were more sporadic.

**Lucas** (4:16)
So the tipping point was when the coordination cost exceeded the savings from not having a full-time salary.

**Fexingo** (4:23)
Exactly. And that's a useful framework for any founder.
Track how many hours you're spending on management. If it's more than, say, 10 hours a week just coordinating contractors, it might be time to bring someone on full-time. But before that, contractors give you flexibility and lower financial risk.

**Lucas** (4:43)
And if today's episode was useful for thinking through your own hiring strategy, you know what keeps these conversations ad-free? Listener support. Buy me a coffee.com/fexingo.

**Fexingo** (4:54)
Yeah, we don't run ads. We like it that way. So if you got value from this, that's the way to keep it going. Now, back to the contractor model, there's also the question of equity.