Software Development For Startups: A Founder's Guide

“Software is eating the world.”

The opening statement of Marc Andreessen’s article “Why Software Is Eating the World” is not a reminder of bubbles for investors. Rather, it is in sync with how new companies with formidable software are disrupting industries. Andreessen calls this a ‘big opportunity’ for investors. Investors cannot ignore the constantly looming fact that out of 10 startups, 9 fail and they constantly look for signals that are deemed to be responsible for such failures. According to a CB Insights report, 38% of Startups failed because they ran out of cash, 14% failed because they didn’t have the right team and 18% failed due to product-related issues. In this article on software development for startups above statistics are enough to stress the importance of a clear strategy.

In this article, we will focus on the key considerations for effective software development strategy for early-stage startups. But, before we start, let us understand the cognitive dissonance startup founders face.

Dilemma of Startup Founders

Startup founders face multiple challenges that arise from the uncertainties in the market dynamics and risks linked with wrong technology decisions. Factors like limited financial resources, time, and fierce competition force them to be frugal and innovative in building the perfect software team, choosing the right technology stack, and setting proper priorities.  

A dedicated CTO can help with effective early-tech decisions, especially if the founder is from a non-technical background or lacks experience. But many early-stage startups cannot afford one during bootstrapping, pre-seed, and even seed stage. 

Some of the common dilemmas they face are: 

• Hire a CTO during the early stage or save money to extend the startup runway? 
• Risk high burn rate with a large team or risk product development speed with a lean team? 
• What is the right technology stack for the product’s success? 
• What features to prioritize during the development of MVP (Minimum Viable Product)? 
• How to ensure speed while managing technical debts? 
• Should I prioritize scaling the product or improving its quality? 
• Do I need to adopt AI or blockchain at this stage? 
• Explore in-house or try offshore product development? 

A wrong decision can lead to high burn rates, wrong product-market fit, scalability issues during the growth phase, architectural limitations, over-pressured or unused engineering bandwidth, slow product development speed, etc. Factors like these make having a clear and tested strategy for software development for startups a must for founders/co-founders.

Devil’s Quadrangle at play

Harry Sneed, a revered professor of software engineering, believes four parameters control the delivery of a product: Quality, scope, cost, and time. Together they form the devil’s quadrangle of project management.

A slight change in any one of the parameters will affect others. For example, a sudden increase in the scope of an MVP development project (adding more features to an MVP) can negatively impact both the cost (more resources to build features) and timelines (more time to complete MVP). Startups must understand how these four constraints work to deliver a top-notch product.

4 Key Decisions involved in planning software development for startups.

Choosing the right technology stack:

Startup founders/CTO should choose a tech stack and architecture to enable rapid development and iteration while staying scalable. The tech stack decides the programming languages and frameworks needed to build the product’s front-end and back-end. It also includes development platforms and support tools required. 

Factors that govern the selection of tech stack:

1. Time to develop: Some tech stacks like MEAN/MERN, Django, Ruby on rails, React Native, etc., are best suited for speedy product development.
2. Cost to develop: Look for open-source technology stacks to reduce product development costs. Such stacks usually have big communities to support each other. LAMP, MEAN/MERN, Ruby on Rails, etc., are some good tech stack options. 
3. Maintenance cost: Tech stacks supported by large developer communities are low-cost and low-maintenance options. Also, tech stacks with lower learning curves can save development time. Further, using a single language like JavaScript (in MEAN and MERN stacks) for front-end and back-end development makes it easy to maintain the codebase.
4. Scalability factor: You will incur tech debt if you only consider time and cost while building a product. The product should be able to handle the expected load increase during the growth phase. MERN/MEAN, AWS, Python Django, Ruby on Rails, etc., are all good options.
5. Team’s expertise: Retraining/hiring developers to accommodate a new tech stack is both time-consuming and costly. Higher development risks and maintenance costs are probable side effects.
6. Availability of talent pool: The scarcity of developers can trigger issues like a hike in hiring costs due to increased competition, high risk of developer turnover, slow development speed due to limited engineering bandwidth, etc.

Here are some of the most used tech stacks with their pros and cons for your consideration

1. MEAN Stack (MongoDB, Express.js, AngularJS, Node.js):

• Pros :
  • Easy to learn and use for JavaScript developers.
  • All components use JavaScript allowing seamless communication between them.
  • Flexible and scalable due to its modular architecture.
  • MongoDB is a popular NoSQL database that can handle large amounts of data.
• Cons :
  • AngularJS can be difficult for beginners to learn and is less popular than React.
  • Node.js may not be suitable for CPU-intensive tasks due to its single-threaded nature.
  • MongoDB’s document-oriented nature may only be suitable for some use cases.

2. LAMP Stack (Linux, Apache, MySQL, PHP):

• Pros :
  • Easy to set up and use.
  • Very large developer base
  • Widely supported and well-established.
  • PHP is a popular language for web development.
• Cons :
  • Not suitable for large-scale applications or complex architectures.
  • Security vulnerabilities if not properly configured.
  • Performance issues with large amounts of data.

3. MERN Stack (MongoDB, Express.js, React, Node.js):

• Pros :
  • All components use JavaScript. It allows seamless communication between them.
  • React is a popular front-end library for building dynamic user interfaces.
  • Flexible and scalable due to its modular architecture.
  • MongoDB is a popular NoSQL database that can handle large amounts of data.
• Cons :
  • React can have a steep learning curve for beginners.
  • Node.js may not be suitable for CPU-intensive tasks due to its single-threaded nature.
  • MongoDB’s document-oriented nature may not be suitable for all use cases.

4. Django :

• Pros :
  • Provides a robust framework for web development in Python.
  • Built-in administration interface and ORM (Object-Relational Mapping) for managing database operations.
  • Offers strong security features.
• Cons :
  • Not suitable for small-scale applications or simple architectures.
  • Require more resources than other frameworks.
  • Slower development cycle compared to other frameworks.

5. Ruby on Rails:

• Pros :
  • Provides a robust framework for development in Ruby.
  • Offers a “convention over configuration” approach, making it easy to use and learn.
  • Offers built-in tools for handling common web development tasks, such as authentication and authorization.
• Cons :
  • Not suitable for large-scale applications or complex architectures.
  • Slower performance compared to other frameworks.
  • Having fewer developers than other frameworks make it more difficult to find support.

Choosing the right architecture:

“If you think good architecture is expensive, try bad architecture.”

Brian Foote and Joseph Yoder said this from their years of collective software development experience. They have the knowledge of how bad architecture can ruin product maintenance and scaling. Startups must act wisely while choosing tech architectures from a wide range based on their specific requirements. Here are some of the most popular tech architectures for startups:

a. Monolithic Architecture: In a monolithic architecture, the entire application is built as a single, self-contained unit, with all the components and modules tightly integrated. 

• Pros :
  • Simple to develop and deploy
  • Easy to understand and maintain
  • Suitable for small applications
• Cons :
  • Difficult to scale and maintain as the application grows
  • Changes to one component can affect the entire system
  • Can lead to code duplication and lower code quality
• Best suited for:
  • Small applications with a simple architecture
  • Startups with limited resources and a small development team
  • Projects with a clear and stable set of requirements

b. Microservices Architecture: In a microservices architecture, the application is built as a collection of loosely coupled services with each service responsible for a specific business function.

• Pros:
  • Greater scalability and flexibility
  • Easier to maintain and update
  • Resilient to failures in individual services
• Cons:
  • More complex to develop and deploy
  • Requires a higher level of expertise
  • Can trigger communication and coordination challenges between services
• Best suited for:
  • Startups with high growth potential and a large user base
  • Applications with complex business logic and functionality
  • Projects that require a high level of scalability, flexibility, and resilience

c. Serverless Architecture: In this one, the application is built as a set of functions that run in a cloud-based environment, with the cloud provider managing the infrastructure and scaling.

• Pros:
  • Highly cost-effective, as resources are only consumed when needed
  • Greater scalability and flexibility
  • Reduced need for infrastructure management
    
• Cons:
  • Can be challenging to optimize performance and monitor function dependencies
  • Limited control over the infrastructure
  • Can increase latency and slower response times
    
• Best suited for:
  • Startups with limited resources and a focus on cost-effectiveness
  • Applications with sporadic or unpredictable usage patterns
  • Projects with a high level of scalability and flexibility requirements
    

d. Containerization Architecture: Here the application is packaged as a set of containers with each container containing all the necessary components and dependencies. 

• Pros:
  • Greater portability and consistency across environments
  • Easier to scale and deploy
  • Reduced dependencies on infrastructure
    
• Cons:
  • Can be more complex to build and manage
  • Requires substantial expertise
  • Can increase infrastructure costs
    
• Best suited for:
  • Startups with complex or diverse application environments
  • Applications with varying usage patterns and resource requirements
  • Projects that require high levels of portability and consistency

Choosing the right team:

Your team plays a pivotal role in a successful software development strategy. You need a team that is experienced, skilled, motivated, aligned, and lean to build successful tech products. Lack of these can lead to tech debts or future scalability issues, iterations and performance issues, and a high attrition rate, whereas an oversize team can derail you with a high burn rate.   

Aligned team: Having the right skill is not enough. You need a motivated team to beat the competition and survive the tough times. A team aligned with the product vision, where individual aspirations are mapped with the product needs, is the right software development team. Such teams have members with a high sense of ownership and see self-growth (learning, compensation) in sync with product growth.

Right Size: The ideal team size differs depending upon the stage of the product (MVP, MSP, Scaling-stage, and Mature-stage). During MVP (Minimum Viable Product) and MSP (Minimum Sellable Product) stages, adopt a lean team approach. You do not need a CTO at this stage. Rather use low-cost options to build a product that you can display to the investors.

1. For MVP, a product team of 3 members (1 Front-end, 1 Back-end, and 1 UI/UX) is usually sufficient.
2. For MSP, a product team of 5-10 members is sufficient (a mix of front-end and back-end developers, a quality assurance specialist, a database administrator, a UI/UX designer, and a product manager)
3. The latter stages demand more engineering bandwidth and depend upon the complexity of the products.

Product Mindset Principles: These can help you achieve a good product-market fit. Some of the pointers are mentioned below:

1. Focus on managing scope creep: The software team can end up expanding the feature list after the sprint cycle begins to achieve the idea’s true potential. This can make development more complex (more things to manage), and costly (more developers) and can lead to a waste of effort if the customer expectations/requirements change. Managing Scope Creep is also crucial for “First Time Right”, meaning moving code to production in the first go.
2. Focus on feature adoption: Feature adoption by users is more important than committing and delivering the feature as per the product roadmap. No matter how good a feature is, if the target user does not use it then it is still a waste of effort. Before committing to a major feature roll-out, study the market, do a pilot experiment, and/or take a customer survey on the need for a new feature that you are planning for in the next sprint. After the feature delivery, invest in educating users about how to use it, keep track of the adoption rate, take feedback, and make appropriate changes to improve it further.
3. Focus on innovation: Avoid re-inventing the wheel. Instead, focus on innovation. Problem-solving is an important part of product development and should lead to incremental innovation. Having a proper mechanism to identify skill and product gaps at regular intervals can help make innovation a way of life rather than a one-time activity. 
4. Ensuring Architectural longevity: Scalability is important to build successful technology products. Taking shortcuts to develop an MVP (Minimum Viable Products) is fine but, if not managed properly, it can create problems while scaling the product. Here is an article on how to build a scalable MVP. Focusing on short-term agility without good tech leaders can lead to tech debts and architectural violations. While scaling a product, such a plan can create serious challenges leading to poor performance, product failures and complexities regarding adding or changing features.

In-house vs. offshore software teams: In-house or an offshore software team? It is a perennial dilemma for any startup founder. In-house software development teams provide more control over product development. But it comes with other overheads like talent acquisition, managing attrition, and investments in upscaling team skills. 

In offshore software development teams, the same level of control is impossible. But you can control the daily sync-ups, sprint cycles, and product roadmap. They have other advantages like the flexibility to ramp up or down team size as per need, low cost, high availability of talent, and they require no HR-related or skill-related investments. 

If you have limited good tech talent, attrition issues, lack of tech expertise, or if you want to lower tech costs, then use offshore technology vendors. There is a separate article on how to select the right offshore technology partner.

Choosing the right product features: 

Feature prioritization can help in getting the product-market fit with limited funding. But that requires a well-defined product roadmap for fewer risks and proper allocation of resources (people and money). Both are needed to increase the chances of success.

What is product-market fit?

A product is called product-market fit when it satisfies the need of the target audience and is in high demand. For instance, people were having trouble with getting relevant information quickly. Google Search understood the problem and started providing information based on the search term provided by the user in text or voice format. It then began to learn the user’s intent and the relevance of web pages to rank them to ensure quick access to information for the user.

Similarly, to cater to user’s need for a smartphone that is secure, full of features, easy to use, and feels very premium, Apple built iPhones. Its iOS provides maximum security and makes it user-friendly.

How to achieve product-market fit? 
Continuous learning and iteration are crucial to get product-market fit. By understanding your target audience, creating an MVP, and iterating based on feedback, you can build a product that meets your target’s requirements and ensure long-term success. 

To simplify the entire process, you must create a priority list for features based on their importance to customers and business goals. You can do it by using product feature scoring. 

Step 1: Identify all the potential features you can include in your product based on feedback from the customers, team, and market.
Step 2: Use a scale of 0-10 or 0-100 to give scores to individual features. Some factors to consider are customer needs, business goals, competition landscape, impact on user experience, ROI, etc.
Step 3: Check how feasible it is to develop each feature using factors like efforts required, tech challenges, availability of skills, etc. You can use a scale (1-3), (1-10), etc.
Step 4: Calculate the score of each feature by multiplying the Importance score by the feasibility score.
Step 5: Prioritize features based on the score, review the prioritized list, and make changes if required.

With these 4 Key considerations, you can build a basic framework to plan software development at different stages. But building an MVP or an MSP requires different considerations.

Read also: Building on a great product idea? Be aware of these 5 notions.

Software development for Startups: Building an MVP

Startups often develop an MVP at either bootstrapped/pre-seed stage or seed stage. Mostly, in these phases, entrepreneurs build MVPs without any external funding as only a few will get pre-seed funding from government grants or angel investors. But they work with an idea they believe has a shot at success. 

The risk of a complete shutdown rapidly increases if their MVPs fail.

Late-stage startups or enterprises, although they start from a comfortable position, test innovative ideas by building MVPs (Minimum Viable Products). 

The purpose always remains the same irrespective of the stage: developing a product with basic features and gathering user feedback before committing more resources.

Ensuring product-market fit for an MVP is critical to product’s success. Here is how you can build a successful MVP.

1. Define target market: Identify target market by researching customer needs, preferences, and behaviors. Consider factors like demographics, psychographics, and buying behavior.
2. Define value proposition: Identify the core problem the product is solving and the value it provides to the target market.
3. Determine features: Identify the core features necessary to deliver the value proposition.
4. Create a user journey: Map the user journey from the initial interaction with the product to the outcome.
5. Develop a prototype: Create a basic product prototype with only the essential features.
6. Test prototype: Gather user feedback and iterate on the prototype based on their feedback.
7. Launch MVP: Release the MVP to a small group of users and gather feedback to make improvements.
8. Iterate and improve: Based on feedback, continue to iterate and improve the MVP until it delivers enough value to justify expanding its feature set.

Key Decisions in MVP Development

Building an MVP requires making several key tech decisions to set the foundation for a technology product. Here are the decisions that trouble entrepreneurs the most.

1. Technology Stack: You must select the right programming languages, frameworks, and tools based on factors like product needs, long-term scalability, available team skill sets, security level required, ease of maintenance and development, and performance.

2. Tech Architecture: This decision impacts product scalability on a long-term basis. Design the data architecture to handle the volume of data the product will generate. Then, decide the type of database SQL or NoSQL you want to use, and determine how to store, retrieve, and manipulate data. Choose these wisely to avoid expensive code rewrites by considering future growth and planning with scalable tech solutions.

3. UI/UX: Develop a UI/UX that is intuitive, user-friendly, and meets the needs of your target audience. Conduct user testing for feedback on your UI/UX and make necessary adjustments.

4. Infrastructure: Decide on the infrastructure you will use to deploy and host your product. Cloud-based solutions like Amazon Web Services (AWS), Microsoft Azure, or Google Cloud Platform offer scalability, flexibility, and cost-effectiveness can help you.

5. Security: Ensure that your MVP is secure by implementing security measures like encryption, access controls, and firewalls. Third-party security solutions can help you augment your security efforts.

6. 3^rd-party integrations: Select APIs, payment gateways, and other services necessary for your product. Determine which third-party integrations you need for the MVP, such as payment processing, marketing automation, or customer relationship management (CRM) software based on the value they will add to your product.

7. Analytics and monitoring: Implement analytics and monitoring tools to track user behavior and identify issues that may arise. Consider tools such as Google Analytics, Mixpanel, or New Relic.

Once you are done with your MVP, the next step is MSP.

Software Development for Startups: Building an MSP

MSP (Minimum Sellable Product) or MMP (Minimum Marketable Product) comes with all the essential features required by customers and good UI and UX. Customers can use or pay for it to solve some real problems.

But this stage needs a product team comprising full-stack software developers, QA engineers, UI/UX developers, DevOps, product managers and tech architects, to develop the desired functionalities to make the product sellable.

Here’s how you can set up a team to build an MSP that meets your customers’ needs and drives business growth:

1. Team setup: Determine the roles and responsibilities needed to build and launch the MSP. Then, hire full-time employees or outsource product development to a technology vendor accordingly, depending on your budget and timeline. Ensure the team has the expertise and experience to build and launch the MSP.
2. Ideal team size: The ideal team size for building an MSP will vary depending on the complexity of the product and budget. Typically, a team of 5-10 members with diverse skill sets in design, development, architecture, and project management can do the job.
3. Tech stack: A tech stack that is scalable, flexible, and reliable is necessary. Choose one with a combination of programming languages, frameworks, and tools that will allow you to build a robust and high-performing product. You can leverage MEAN (MongoDB, Express.js, AngularJS, Node.js), MERN (MongoDB, Express.js, React, Node.js), or LAMP (Linux, Apache, MySQL, PHP).
4. Architecture: Choose a scalable and modular architecture to support future growth and development. A microservices architecture or a serverless architecture can help you with scalability and reduce infrastructure costs.
5. User feedback: Identify the essential features and functionalities needed in the MSP from users who used your MVP. Prioritize the most critical features and develop a roadmap for future enhancements. Tracking trends and competition can also help you ensure Product-Market Fit.

Conclusion

“Simple rules guide innovative, intelligent responses.”- Jim Highsmith (Adaptive Leadership: Accelerating Enterprise Agility)

Priorities change when you move from MVP to MSP to a more feature-rich product. But that should not make processes complex. We have developed these 4 key considerations from our experience of working with startups for two decades. It will definitely help you set up your process.