Fractional Teams: How Startup Founders Can Leverage Big Tech Layoffs to Their Advantage

Tech workers are facing an uncomfortable new reality: When it’s time to make cuts, neither talent nor seniority will keep you safe.

Over the past three months, 150,000 tech employees have been laid off—many in callous and unceremonious fashion. In the wake of this Great Betrayal, the attitudes and perspectives of these highly-skilled workers are shifting rapidly. 

Research shows most knowledge workers are disillusioned with full-time work and eyeing fractional employment. And underneath the surface is a big opportunity for startup founders to bring top talent into the fold—in a way you might not expect.  

Lean speed: The exponential benefits of fractional hiring 

Tech founders and execs are increasingly adopting a new model of fractional hiring amidst a tight fundraising environment. In a recent survey we conducted of 581 tech founders and execs, 71% said that fractional talent gives their business greater agility during times of economic uncertainty. It’s also an attractive alternative to the traditional hiring process, which 67% of founders said is too time consuming and expensive.

As for the laid off talent, 83% have lost trust in the stability and security of full-time employment amid layoffs—leading many to pursue fractional opportunities instead. Over two-thirds of independent workers say that this model gives them greater job satisfaction, financial opportunities, and work-life balance than a full-time gig. 

Fractional teams are the next evolution of fractional hiring—instead of using fractional talent to solve one-off needs, founders have the opportunity to rethink how they build high-impact teams by combining fractional talent with full-time employees. 

Fractional teams are already emerging in most companies. In our survey, 73% of tech founders and execs said they currently have integrated teams of full-time and independent workers. The startups that embrace it are going to build faster and more effectively than the competition. 

How to build fractional teams 

Too often, founders retro-fit the outcomes they want to the employees they have on hand. Think of it like hosting a dinner party for an important group of clients. With the traditional hiring model, you’re buying a bunch of groceries and then deciding what to cook. You came home with a chicken and a bunch of eggs, so you’re making chicken francese—even though you realize your three most important clients hate chicken and really love fish. You hired a bunch of data scientists, so you decide to build an analytics product—even though your customers don’t care and will look at it once a year if you’re lucky. 

Fractional teams take the opposite approach. You have a small nucleus of FTEs on each team—think of them like your kitchen staples: oil, salt, sugar—but you then bring in the fractional talent that serve as the missing ingredients so you can build the products and programs that’ll serve your customers best. If you’re moving upmarket, you can quickly bring in an account-based marketing specialist. Building a new GPT-3-powered feature? Bring in the machine-learning talent you need. 

There are four key steps to building a fractional team:

1. Identify your most important growth initiatives 

What’s going to move your company forward and help you hit the growth goals you need to quickly get on the path to profitability? These are the things you wish you could report on in your next board meeting, but can't yet.

In early 2021, Apprentice, a life sciences manufacturing platform, had the chance to be a central player in the distribution of the COVID-19 vaccine. But to pull it off, they needed to launch an entirely new version of its product—which spans many different stacks as well as augmented reality headsets—in just 45 days. 

When you need to make a big push, you can scale up quickly to make it happen.

So it brought on a fractional engineering team to rebuild its platform, rapidly scaling the team as they tested and learned along the way. 

Apprentice CEO and founder Angelo Stracquatanio said the rebuild would have literally been “impossible” if not for fractional teams. “Then the whole world opened up” in terms of talent. This reveals one of the big benefits of the fractional model: When you need to make a big push to hit an important milestone or say yes to a generational opportunity, you can scale up quickly to make it happen.

2. Map the skill gaps in your team preventing success

What skills does your core team have covered? Figure out what’s missing and draw up a grocery list.

Take the founders of Blank Street—the tech-enabled coffee shop that’s raised $67M and expanded to 60+ locations. Vinay Menda and Issam Freiha are non-technical. So they brought on a fractional product team to build their app before they even reached their Series A. They started with a small fractional team of PM and developer to prototype the app, optimized based on user testing, and then added additional fractional devs and designers as the business took off and they figured out what else they needed to build. 

By using a fractional product team instead of spending 6-12 months hiring full-time employees, Menda and Freiha were able to accelerate their growth, raise capital, and become a New York sensation. The New York Times described Blank Street as “inescapable.” They’re a great case study in how founders can get a leg up by using fractional teams to build their talent organizations from day 1.

3. Tap into your network or talent platforms to recruit fractional teams

Somewhere around 80% of jobs are filled through personal connections. You can post openings for remote, fractional openings on LinkedIn—the latest data suggests these kinds of opportunities are in high demand. 

Then there are the talent platforms. That’s how we’ve built A.Team—with a core team of 55 FTEs plus a dynamic, larger build-team of 70+ specialists from our own network. We made fractional hires for everything from data scientists to growth marketers to c-level strategic advisors.

Our team isn’t static. It’s dynamic based on the outcome we’re trying to achieve, and this mode of working has allowed us to grow 20x while keeping our burn low and raising $60M. And while we have physical offices, our work and strategic decision-making happens in the cloud, which means we’re able to bring on the best talent from across the world.

4. Iterate and scale over time

One of the biggest benefits of fractional teams is that it allows you to start with the leanest team possible, test and learn, and then quickly expand your team—thanks to the proliferation of high-end fractional talent platforms where you can connect with highly-skilled workers. 

Take McGraw Hill—a 100+ year-old legacy publisher that embarked on a mission to make studying fun for a generation of college students who felt more comfortable on TikTok than reading a textbook. 

This is how the most successful companies grow their teams and accelerate product development, while saving on costs.

They started with a small, three-person fractional team to build a prototype to test with students, then eight to build the MVP, before scaling to 27 fractional builders that partnered with the internal McGraw Hill team to launch the product to thousands of students across the country. It was quickly downloaded tens of thousands of times, splashed across the front page of Forbes (Students Viewed This Type of TikTok 412 Million Times—And It's Not Porn), and led McGraw Hill's latest earnings report as it recorded a 28% growth in its digital billings. It was, as one student put it, “like TikTok and Duolingo had a baby.” 

This is how the most successful startups (and enterprises) grow their teams and accelerate product development, while saving on costs. Simply put, fractional teams lead to exponential results, and founders that embrace them will have the runway and headwind to win.