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As a startup-minded software development company, we at NEKLO have worked with dozens of early-stage companies. In our post, we share useful insights on how non-technical entrepreneurs can shape their ideas into a software product.
Startups live in a dynamic world guided by feedback from early users. Unlike larger companies, they are free from bureaucracy and a long-term approval process. Decisions are taken in a matter of a day by a few people who own the idea and define the course of the projects. Therefore, software development for startups has several unique characteristics that set it apart from development in more established companies.
In startups, the software development process implies frequent iterations and rapid prototyping both in terms of designed, built, and deployment. Sometimes, the cycles can range from days to weeks. Frequent deployment cycles help to catch issues early and deliver a reliable product to your users.
While getting the MVP out quickly is often the initial focus for startups, the long-term goal is always future growth. This means developing software that can scale as the user base expands. From the development team, it requires careful planning of architecture, cloud infrastructure, and the proper choice of the core technology.
To thrive in this environment, you must keep your development agile, with the team ready to adapt to new information. So, what are the most effective development methodologies that allow startups to turn their initial ideas into successful, scalable products? Let's explore them.
The best software development methodologies for startups are Lean, Scrum, Kanban, and Feature-driven development (FDD). All of them follow the core Agile principles:
Let's take a look at what differentiates these methodologies.
Lean Startup methodology relies heavily on user feedback. Eric Ries developed the term, describing the software development process as a "Build-Measure-Learn Cycle." The development team focuses on the most critical tasks, receives rapid feedback, and quickly implements adjustments.
What's peculiar:
Scrum is an Agile methodology that emphasizes teamwork in a startup. Everyone on the team, whether in-house or outsourced, has a well-defined goal to follow. The development process is structured into short, time-boxed periods, aka "sprints." Each sprint takes two to four weeks on average; however, this all depends on the complexity of your project.
What's peculiar:
Kanban methodology, another agile hybrid, uses visual boards to track tasks and optimize workflow. Unlike Scrum, Kanban does not prescribe specific time frames but instead emphasizes limiting work in progress to avoid release delays and get your team more productive.
What's peculiar:
Feature-Driven Development (FDD) is an Agile methodology that prioritizes functionality development. This methodology might not be the best option to start an MVP but fits well if you have a clearly defined list of small features to add to a working product.
What's peculiar:
Choose your software development methodology based on your startup needs, priorities, and goals. In practice, the best methodology for a startup is one that blends different practices for close collaboration, adaptability to changes, continuous testing, and quick feature implementation.
When aiming for the top startup accelerator programs, you are expected to present, at a minimum — a working prototype or MVP with key features, and at maximum — a full-scale product with a solid user base. Depending on the type of software your startup aims to create, there are certain things you need to keep in mind.
Minimum viable products (MVPs) today are somewhat different from what they were a decade ago. It's not just about building a bare-bones prototype anymore. Rather, it's about creating a viable product that provides real and immediate value to users.
MVP startup software development implies the following:
Neglecting any of these components is like taking out one of the load-bearing bricks — it may ruin everything.
If you miss out on the problem-solving functionalities, your project will fail. Indulge users with the eye-bleeding look and feel, and they will leave. Compromise your reputation with insufficient security measures, and users will never trust you with their data. Spoil their first user experience with bugs or performance errors, and there may be no second chance to make a first impression.
Full-scale software products involve more complex and long-term development. They have a more complex architecture that initially keeps the scalability among top priorities. While MVP generally includes several key features, a full-scale product may join different sets. The user experience is more complex too.
Full-scale software development implies the following:
While MVPs aim to validate a product idea and help the startup gain first traction in a narrow market, full-scale software development targets broader enterprise segments. It’s supposed to have all the needed features and integrations and be scalable for a larger audience.
Naturally, such development requires higher investments and long-run time frames from a startup to prepare a market-ready product.
Depending on the budget, timeline, and the specific expertise required in your startup project, you may consider outsourcing your software development or setting up an in-house team.
Hiring in-house developers gives you more control and closer collaboration, but it can be costly and time-consuming. The in-house method is most common when the product involves proprietary technology or complex algorithms that require constant innovation and refinement.
For many startups, especially in their formative stages, software development outsourcing is a popular choice. These early stages often involve constraints such as limited budget, expertise, time, or resources.
By outsourcing their software product development, startups can fill these holes not just at an early stage but beyond, in the growth and late stages, too.
Here are the common scenarios when startups choose to outsource software product development.
Fundraising is tough competition nowadays. Having a solid idea and business plan on paper is not enough anymore. Most investors trust numbers, not potential but actual, of how well you can do. Therefore, a working product, even at an early stage, becomes necessary.
Outsourcing indeed cuts the software development budget by half (or even more). Consider the mere rate estimates. Eastern Europe, a common top choice for custom startup software development, has lower salaries than NA or EMEA countries.
The average hourly rate for a software developer in the United States ranges from $100 to $150, while Eastern Europe charges $25 to $50 per hour. And that's for development only, excluding the HR and operational expenses, which lie on your shoulders, if you hire an internal team. Spending this budget on marketing and user acquisition seems a wiser investment choice.
Developing an MVP requires not just initial investment but technical expertise. In the modern world, which resembles more of the tech race, finding talents with emerging or rare expertise is challenging. AR, AI, and ML are just top-of-mind examples, all favored by accelerator programs. In fact, some accelerators, like The AI Fund, AI2 Incubator, or Techstars AI, focus only on "next-gen" technological startups, and this trend is likely to continue.
Finding the right in-house technical expertise may be challenging (and costly); therefore, outsourcing software development to third-party companies is a common practice for many startups. Such companies have a proven talent pool and can quickly provide you with the needed development capacity to implement advanced projects.
Outsourcing parts of your software development is a feasible practice, too. Startups doing their core product development in-house may delegate QA testing and maintenance or mobile app development aspects.
Setting up an all-rounded in-house development team with diverse expertise may take months. Outsourcing companies help you speed up the process of assembling the right members. They perform the pre-interview process and own the pool of talents who can quickly onboard the project. It reduces the development cycle drastically.
Startups may need support at different stages of their journey. A professional custom software development company can assist with technical matters — from idea validation to a fully launched product. Let’s take a quick sneak peek into software development services a startup can use.
So, what should you look for in a development provider? There’s a range of advice and tips that a startup owner should put into practice when partnering with a software development company.
If your startup software product aims at a specific domain, like healthcare or retail, choose a development provider with experience in your industry. They understand the particular challenges and regulatory compliance requirements like HIPAA and can save you much trouble down the road.
Ensure the development team has the right technical skills and experience in the technologies that your project requires. This includes proficiency in relevant programming languages, frameworks, and tools.
Miz-size software development companies (50-200 people) provide the best balance. Unlike small teams, they have enough development and testing capacity to assist you with the development launch and scaling. Unlike large corporations, where your startup project may not be given enough attention, they share your enthusiasm.
Establish clear and open lines of communication with the development team. Regular updates, meetings, and feedback loops help keep the project on track and ensure everyone is aligned with the goals.
The code should reside in your repository and your account at GitHub and GitLab. This ensures you have complete control over your product, with the flexibility to make changes or hand it over to another team if needed.
Ensure that all intellectual property rights for the end product are clearly defined in the contract and that a Non-Disclosure Agreement (NDA) is in place to protect your ideas and proprietary information.
Last but not least, explain not just what needs to be done in terms of software but why it needs to be done. Outsourced development teams are, first and foremost, made up of people who will be just as excited as you are when they understand that they are making an impact. Engaged teams perform better.
While the development team is an extension of your startup, you should maintain full control over the project’s vision, direction, and goals. Regular check-ins, milestone reviews, and clear directives will help align the project with your objectives.
Security breaches can significantly damage your startup’s reputation. A 2023 survey by Pew Research Center revealed that 81% of Americans believe that the risks associated with companies collecting their personal data outweigh the potential benefits. Therefore, when you develop software for a startup, it’s important to set a secure development infrastructure from day one.
Prioritize a security mindset and culture from the outset. Sign NDA and embed best practices into every aspect of your development and testing process.
Use best practices like CD/CI, secure coding, peer code reviews, and automated testing to deliver seamless, interoperable solutions.
Enforce unique usernames and random passwords for every service and tool and never share them among outside team members.
Implement rigorous protocols to deactivate user accounts immediately upon their departure to maintain a secure and up-to-date access control environment.
Enable 2FA/MFA for critical infrastructure and administrative accounts to protect against unauthorized access.
Perform regular security testing practices to safeguard your infrastructure and software from any potential threats:
We’re committed to finding solutions to problems rather than mere task completion. We care about the impact of tech on your business, proposing ways to optimize total cost of ownership while delivering feature-rich, compliant products.
We approach each project with business analysis to ensure our software meets your needs and delights users.
We work with Jira, Trello, Slack, Confluence, or the tool you use to document and track every sprint, feature, and bug fix. You always have a clear vision of the development history.
You can see the start and end times for each task and track progress through detailed timesheet reporting on each team member's work.
We create software for industries with strict rules about data privacy and security, such as healthcare and financial services. We’ll make sure your product meets all the necessary regulations, like HIPAA for healthcare or PCI DSS for payment data security.
As you start developing software for your startup, keep in mind that having a smart strategy can turn your great ideas into a successful product. By setting up the right foundation, picking the right development team, and focusing on what your users need, you’ll be in a strong position to not just meet, but surpass your goals.
So, get ready, stay focused, and let your software drive your vision forward. NEKLO can help you navigate the path to success and seize all the opportunities ahead. Contact us for a free consultation, we’d love to hear from you!
US-based and operating globally, NEKLO spearheads digital transformation initiatives for businesses worldwide. We deliver software solutions complying with your market and legislation.
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