How Do We Work With Startups?

Seven / Blog / How Do We Work With Startups?

Startup development requires an individual approach compared to software development as a whole.

Having extensive experience working with startups, we are convinced that the maturity level of a startup, raised funds, and the Product Owner’s (PO) involvement play a significant role in the cooperation process and general project success. Furthermore, our experience shows that all startups that start from scratch are divided into two types:

A Quick-Launching Startup To Proof Of Concept

We noticed that these startups and their Product Owners have something in common:

  • The main goal is to launch the product as soon as possible and then look for additional money to implement the idea further
  • In most cases, the work process is NOT about entering the market by minimizing the risks associated with negative target audience feedback on the product. Instead, the main ideas are: to launch the product according to Product Owner’s vision
  • Product Owner is always in a hurry, usually has little money, and at the same time wants to implement a large-scale product
  • Typical difficulties in the cooperation process: complicated scope and budget management

When we encounter such a startup, we try to give the Product Owner as much valuable advice as possible and share our experience. The main thing here is to spend money wisely.

Working with such startups, we immediately familiarize the Product Owner with our recommended cooperation model’s key points. We consciously shape the reduced scope of work that doesn’t include many tasks associated with specific standards and guidelines, creating the full scope of user flows and their testing, requirements documentation, and others. In fact, we perform basic product visualization and transfer interfaces to development.

Also, we warn Product Owner about the risks associated with this approach, such as:

  • Thorough and most accurate budgeting before programming IS NOT possible
  • Testing and bug-fixing processes can exceed 50% of labor and programming costs because all edge cases and exceptional situations are not processed at the product design stage, so the product architecture is usually laid down considering what is obvious at the beginning of development.
  • Cost minimization for alterations and refactoring is virtually non-existent
  • Change management is complicated

Project management models:

Important! Sometimes it is impossible to use Scrum because it’s challenging to form the scope of work for a 2-week sprint and stick to it without changing priorities.

What are the advantages of this approach:
Quick product launch. We are not really talking about perfection and high quality! Also, there is a need to plan a budget for product maintenance immediately from the moment of attracting real users.

In which cases is this approach relatively safe:
If the product contains 2-3 functional units, there is no extensive scope, and the total cost of launching its MVP does not exceed 50K. In this case, the efficiency of the using budget will be within the normal range, and the wasted money indicator will be within acceptable limits.

A Concept-Proven Startup

What these startups and their Product Owners have in common:

  • Usually has a deadline which is already related to pitching plan and product promotion activities
  • PO already knows or begins to understand that starting scope of functionality should be chosen carefully, considering available funds and risks associated with attracting funding
  • The main goal is to launch the product within the chosen investment model step by step
  • Usually, PO already knows the approximate budget limits but does not necessarily have the required amount at the same time
  • Usually, the work process is ABOUT maximum user orientation, attraction, and retention
  • Typical difficulties in the cooperation process: there is a need for control over improvements and changes to already implemented functionality to spend the budget as planned

Working with such startups, we immediately divide the software product development process into two stages (A and B). Stage A is designed to form a perfect product vision and then prioritize the scope for product development – Stage B.

A Clickable Software Prototype, which is the main deliverable of stage A, gives significant advantages over the fast process because without spending money on the development, the Startup’s idea has the opportunity to get early user feedback from the focus group and make the necessary changes and improvements. It is also an excellent resource with which it is easy to demo ideas to potential investors and get funds for further growth. At the same time, the software development process during stage B is fully predictable, and the budget is used much more efficiently compared to other approaches.

Thus, Product Owner receives:

  • Thorough and most accurate budgeting for each feature implementation before programming
  • There is maximum cost minimization for alterations, as clickable user flows prototypes give a native interaction with the product, identify inconveniences, or force to rethink functional operations before spending money on their implementation in the code
  • In the working process, there is an understanding of how each change affects the whole platform functionality, and we can fairly accurate estimate its implementation
  • The most well-thought-out and adapted software architecture for obvious reasons
  • Costs for product testing are minimized, as the full UI visualization and detailed requirements for functionality development give the maximal scope coverage, which provides implementation completeness from the firsts editions
  • There are all prerequisites for proper risk management
  • The spending budget efficiency is high

What are the advantages of this approach:
First of all, launch software products on time and with proper quality.

What could be interpreted as a disadvantage:
The development cost may seem more expensive at the beginning, but you will get more software functionality for the money that, in the first case, is spent on numerous modifications, alterations, improvements, and changes to already implemented functionality. Additionally, the overall development timeline is often equal if considering the whole software product debugging period with two approaches.

When the following approach is recommended:
For most projects worth up to $ 1 million, especially those in the budget range of $250,000-$300,000, to get the maximum functionality for the budget spent.