Selecting a Web Development Company

We've spelled out our needs with enough detail that we at least have a starting point for negotiations with a web development firm. The next big question is: How do we pick one?

There are really five criteria to determine which developer is best for you:

1. Size of Firm

   Think you are going to waltz into the offices of a top-shelf developer like Red Sky Interactive and get them to talk to you? Think again. Unless you have a million bucks to spend (literally), you won't even make it into the waiting room. Firms like these just don't deal with small projects so don't even waste your time.

   Instead, look for companies that have 20 people or less. Generally, these are the firms that will tackle projects with the budget a small business is going to have.

   And don't think that you are necessarily getting any less going with a smaller firm. In fact, you are probably going to get more. Here is a back-room story.

   I have a friend who did have a million-dollar budget. He solicited a bid from a pretty well known firm (not Red Sky). When he read through the final proposal, he noticed that, occasionally, instead of his company's name there was a reference to another company's name. He quickly realized that this particular firm had, in fact, cut and pasted his company's name into a proposal they had written for another company. Now you might expect that sort of treatment if you had a five-figure budget but not if you had a seven-figure one.

   Just because you have a well-known name doesn't always mean you know what you are doing.

2. Location

   They say that because the Internet is everywhere, physical location is irrelevant. That isn't always true.

   First off, you'll see a big difference in price for the exact same work from a firm in Manhattan versus a firm, say, in Philadelphia. In fact, a friend of mine who runs an agency in Philadelphia has lots of Manhattan clients because he can do the same, or better, quality work as a fancy New York City agency for a lot less. And he is only a two-hour train ride away when he needs to meet with them, which leads into my second point: There is a certain comfort level with being able to walk into the offices of your web development firm without getting on a plane. Things just seem to get done faster when the client can walk in the door at any minute.

   So if it comes down to a tie on all sides, go with the firm that is local.

3. Client List

   Ever wonder how five different firms can claim Nike as a client? There are two explanations for this:

   1. Nike was a client at some point in time, but it is no longer a client.
   2. The firm does work for Nike, but it is a small piece of the pie. The firm is not the agency that handles the major stuff (known as the agency of record, or AOR, if you like acronyms).

   So when evaluating a firm's client list, keep these things in mind:

   • Are these current clients, or were they clients at some point in time? (Firms with a good list of current clients should score higher points.)
   • What did they do for these clients? Is it similar in scope to what you want the firm to do for you?
   • Are any of these clients related to your industry? If so, the firm probably has a good perspective of what your unique needs are.
   • Don't write off a firm just because a client or two dropped them. Sometimes it isn't the firm's fault. Clients are fickle folks, especially big clients. Changes in management, philosophy, business direction, or even just plain old corporate politics can force a change in web development firms.
   
   
4. Depth of Skills

   Succeeding on the Internet requires three major sets of skills - design skills, marketing skills, and technical skills. In my five years of doing this stuff, I've come to the conclusion that technical skills are most critical. Here's why:

   You can buy any one of a dozen programs that will let the novice generate a decent-looking site. You can buy any one of a hundred books that will teach enough Internet-marketing theory to launch a program that gets some results. But unless you have superhuman intelligence and a lot of time, there is no number of books or programs that can teach you to build custom web applications like a skilled programmer.

   And, frankly, people will forgive the way a site looks if it functions the way they want it to.

   So go with the folks that know how to actually build it.

5. Organizational Compatibility

   And finally, ask yourself: "How much do you like these guys?" Anyone you are entrusting with the future of your online business needs to be someone who thinks like you do. If not, you're going to have nothing but clashes. Remember, you are entering into a relationship.

Negotiating the Contract

So now you've made your decision, and it is time to sit down and negotiate the deal. Here are the terms you should include:

• Pay half of the estimated costs up-front, and pay the balance on delivery.

  This is good for both sides. They get some cash right away; you get some leverage that the project gets done.

• Either own all the content that makes up your site or at least be entitled to a royalty-free license.

  Many web development firms recycle software code. It is wasteful to start from scratch writing new code to solve a problem that was already solved for another client. And with all the free code floating around on the Internet, sometimes web development firms modify a free piece of code to do what they need. Given such practices, ownership is a thorny issue.

  The way it is typically handled is if the code can be reused for other clients, the web development firm grants every client whose site uses that code a royalty-free license - meaning you can use it anywhere, anytime, as long as you don't sell the code by itself. An example of this would be a program that turns form data into an email message.

  If the code was developed exclusively for your use, and no one else can really use it, then you should negotiate to own it. An example of this would be a program written exclusively to generate a custom report for you.

• The site should be portable, regardless of where it is running.

  Be sure that the site is designed in such a way that you can easily pick it up and move it to another server if you want. Who knows, maybe your web development firm gets bought by a bigger firm you don't like, and you decide to move the site somewhere else. The last thing you want to hear from the firm is: "Oh, your site won't work on another server because we used some wacky proprietary technology." Get it in writing that the site will be designed in such a way that it can be moved somewhere else with only minor modification.

If the cost of any work exceeds 20 percent of the estimate, the web development firm needs to get approval before finishing.

Costs for web development can be kind of hairy because sometimes no one knows the scope of the problem until they are in it deep. To protect yourself from a surprise bill, request that the web development firm notify you if it looks like the work will be more than 20 percent of what they quoted you. It protects the web development firm, too, because it forces them to audit the project.

This article was written by Richard Hoy. After five years of telling others about how to spend their marketing budget online, Richard Hoy recently left the employ of this influential publication to see if what he's been blabbing with his big fat mouth all these years really works. He is President and Co-founder of Booklocker.com Inc., an alternative to traditional publishing that helps authors realize profits of up to 70 percent of sales by combining electronic publishing with Internet marketing.

Richard Hoy (richard@booklocker.com)