Should I hire contractors or freelancer for my startup ?

Dear Naguib;

I did a number of startups and money was always the main challenge, so you are not alone ...

I am depending on contractors/freelancers as much as possible since I don't want to end-up carrying heavy fixed operational expenditure and this way you can cut the losses very fast.

Pros and cons of having freelancers/contractors Pros

• easy to stop the relationship whenever is needed with no legal consequences
• you can agree with them on fixed fees plus success fees if they finish a certain task on time
• You will have access to large pool of expertise especially by using services such as elance.com

Cons - Commitment : freelancers might disappear without warning - Experience : hiring freelancers has a risk of freelancer overselling himself and you might find out that you took the wrong decision, by the time you find out that, you usually did lose at least a month. - Knowledge : when a freelancer leaves, he will take the knowledge with him and he might even have access to some sensitive internal information - Support and maintenance: if your business needs support you will have to hire him/her again

I usually start by using freelancers fully, when I have a proof of concept ready I stop using them until I secure some financing or the business proves successful, then I hire a very small team (1-3 people only) and use freelancers. Never hire too many people, if you think hiring people is tough wait until you have to fire someone, its a million times harder and you will be surprised how people will react to your decision, you will easily find yourself in court....

Good luck