Pitfalls to avoid when working with agencies (based on my $120k worth of experience)

Welcome to my newsletter, where I'll be sharing my journey growing lemon.io to $50m / year

In this edition, we're focusing on one of the trickiest aspects of any business — hiring agencies to speed up your growth. As I run a development marketplace to hire vetted engineers, I've had the opportunity to work with several agencies over the years and have learned a lot from my experiences.

I've compiled my $120K worth of experience working with agencies (SEO, paid acquisition, conversion copywriting, and design), as well as summarized my insights as a vetted dev marketplace founder. I hope my insights will help you avoid typical pitfalls and make the most of your agency partnerships.

Let's dive in. Here is my checklist:

1. Go to the agency when you know what needs to be built

User stories, jobs to be done, roadmap or design: whatever specification you have. Otherwise, much of the code will be thrown away. Same rules work for marketing agencies. If you don’t know your users and positioning, none of the agencies will do marketing for you.

2. Check out the background before shortlisting

Start with research: find testimonials or real products the agency helped build. Check the “Showcase” section on the website. Open Trustpilot & G2. The more previous experience you can see, the better.?

3. Ask for a consultation first

Meeting the team can help you check the fit before starting the project. If you’re looking for a dev agency, chat with developers beforehand. Really, get to know the developers. Soft skills are as critical as ability to code. Avoid working with agencies that underpay their developers.?

4. Draft the specifications

Clear requirements will help you manage the costs. Spend time scoping the development, UI or QA tasks in the agency brief (or ask the agency to scope the project after your call).

Clearly define success.If the agency is building an MVP based on your design, you can use design specs as reference or use passing QA process as the success metric.?

If you don’t hit your milestones, take a step back and talk to the developer to figure out why the milestone was missed. Did you fail with articulating the project expectations? Did you change too many requirements on the way? Or was the problem on the development side? Define what would happen if the timeline or milestones are not met.

5. Start small & provide feedback

Figure out if you can get the small commitment from the beginning. Focus on delivering a smaller MVP with the ability to change developers on the way (if it gets stuck). Get iterations with user feedback as early as possible to ensure you’re moving in the right direction. Move in short sprints. Pay for milestones.

6. Keep the decision-making in-house

Make sure you have the technical co-founder or CTO to make the strategic decisions. If you don’t want to include someone full-time, you can get started with a fractional CTO. Don’t outsource strategy.

7. Hire an agency that’s a good fit for your culture

Pick the team that uses the same development approach, has remote culture, shares similar values, and you’d generally like to hang out with those people.

8. Ask for replacement policy

Verify that the agency has a replacement policy in case of bad hires or other issues. As a side comment here, have an agreement that outlines that you own the right to the product and all the associated intellectual property.

9. Protect your idea

Include code ownership into the contract and outline that you own the right to the product and the associated intellectual property. If you don’t have an in-house legal team, use templates for the docs like NDAs and contracts .

Get the agency selection checklist in the ready-to-use, easy-to-copy Google Doc format.