7 Challenges of Software Product Development for Startups and How to Avoid Them

startup product development in Leicester

Building a startup product from scratch is a long and complicated process. You need to come up with a unique and valuable idea, develop a meaningful software product, and successfully sell it to users or other businesses. Throughout this process, there are many pitfalls and common issues that your innovative startup will most likely face.

This article will explain what these software development challenges are and how to avoid them. Besides, we will provide select client case stories to illustrate these challenges and solutions.

Challenge #1: Lack of a clear plan and an achievable software development roadmap

The Problem

Many startups waste time and money, trying to complete too much too early. This slows down the dynamics of the startup’s growth and prevents them from meeting deadlines and producing something tangible on time and budget. To be successful, you first need to do one thing to solve one specific problem for your target audience or its particular segment before expanding your reach.

This loss of momentum from growing too quickly or growing too much can damage team morale. This is because there is no clear vision to pull the team together when stress builds up.

This becomes more of a problem when startups receive funding and decide to build features or invest in technology that doesn’t match their software product development roadmap. If the functionality does not help users or customers solve their problem, you need to re-evaluate your entire approach.

The Solution

A product development plan clarifies the purpose and vision of a startup’s product and is useful to have when raising funds. This roadmap details the company’s priorities and gives a clear idea of ​​how your business will benefit your users through a well-defined product concept.

Startup companies can ensure that their priorities are correct by comparing them to value proposition, target audience, and expected revenue streams. As a result, startups must set a formalised product development goal to achieve, rather than just figuring it out along the way.

Business Model Canvas is a tool that you can use in parallel to define your business model. This will help entrepreneurs understand what actions to take in the first place to grow their startup.

business model canvas template
Business Model Canvas template

At Evolve, we hold Startup Discovery Workshops to assist startup companies with their software development project specification, project management and milestones delivery planning, etc. The outcome is a detailed technical requirements specification and an achievable roadmap that each startup can use as guidance along their software development lifecycle. 

Entrepreneurs can also make a list of the key things they don’t want their startup to do after the market launch. This can help startup founders make better decisions and keep track of the startup’s goal without losing focus.

The desire to add features is natural, whether the need arises from creativity or from pressure from users, investors, and team members. Startup founders should remember that the time and money to develop a product are limited. Startups should focus in advance on channelling limited money into high-value activities.

Evolve Client Case: Why Offerd, a UK-based innovative recruitment startup, backsourced their bespoke product development from India to Ukraine due to the wrong technology chosen.

Key Takeaway

A clear product development and management plan, consisting of technical requirements specification, roadmap, and implementation plans, is essential for a successful startup. Without a development plan, distractions arise when new features or technologies are added that have no value to the customer. A startup that doesn’t have a software product management plan wastes time and resources because there is no clear direction to follow.

Check out How to Create Product Development Roadmap for Your Startup.

Challenge #2: Not investing enough in market research and customer development / creating a product that nobody wants.

The Problem

Many startups mistakenly believe that they have a solution to a problem they believe exists without obtaining objective evidence through proper market research. As a result, many entrepreneurs think there is a market and user base for their potential product. This problem is further exacerbated by the collection of low-quality, biased market research providing a false indication that people are interested in the product. You can avoid this by using the tactics described in the book “The Mom Test” ​​by Rob Fitzpatrick.

Entrepreneurs are often driven to create a product that caters to many users’ needs because they think a larger market is better, and their solution is universal. However, creating a product that everyone will enjoy makes a product so general that it does not solve anyone’s problem exceptionally well. 

Many startups also cannot abandon existing assumptions and hypotheses. They don’t listen to user feedback and, as a result, create a product that is far from the product that the user really needs. No matter how experienced or smart someone is, their opinion is just one data point. It makes sense to look for trends in many data points to make sure your assumptions are correct. It is often surprising, or even confusing, how much the customer sentiment is different from what you might have anticipated.

In general, ignoring and not listening to what market and user research tell your startup is a severe mistake many early-stage companies struggle with. Product value is the most important criterion for product success, so if this step is ignored, your startup is likely to fail even before it even starts.

The Solution

To fully understand the market and your target users, it is necessary to conduct research at the beginning of the project before any development kicks off. This research will continue to be used across all stages of development, from ideation to release. In addition, new research is needed to keep abreast of any changes in the market and among your users.

Evolve provides market research support for entrepreneurs who can then use it to identify the underlying problem, assess user needs, the potential demand for a product and its characteristics.

Often, the true value of marketing research lies in gaining new insights that you never thought about before, or in knowing that you really didn’t know what you didn’t know. It is often the driving force behind companies seeking to bring their craziest ideas to life.

Research can also be used to define the optimal prices for the final software product. It is essential to understand the problem’s value (how much it costs the client). In addition, a good understanding of competitors’ pricing and business models can help guide your pricing decisions.

Any assumptions and hypotheses generated by your startup need to be tested and validated before spending a lot of money on software development. This validation should be done quickly and easily before launch. Below are some examples of methods that you can use to test any assumptions and hypotheses:

  • Ask users to sign up for a limited-service offering to see how it resonates with your target audience;
  • Create a paper or clickable prototype for product demonstrations without initiating product development;
  • Build an MVP/MLP and use it to collect feedback from target users.

In conclusion, all startups should conduct market and user research to ensure that the product development plan is valuable to the user. When in doubt, choose a product that is simple and attractive with clear and meaningful value. All of this must be done before expanding the user base and scaling the product with unique additional features.

Key Takeaway

Market and target group research is essential to creating a useful and valuable product to the target user. When you try to create a product that will be useful to everyone without targeting a specific niche of users, it creates a general product of no value. 

Evolve Client Case: How e-bate, a leading UK-based rebates startup, used an extended software development team in Ukraine to build an MVP, which helped them attract  £1 million in VC funding and onboard the first paying customers.

Challenge # 3: Ignoring UX/UI design when planning product development

The Problem

Many startups rush to create a technology solution instead of spending time planning their product design. Product design is a blueprint for how a product will look and function before it is developed. This leads to problems, as developers now need to adapt the product design to an already working product, rather than create a functional outcome based on a design plan.

Many startups decide to design their product quickly and move on to actual development. Poorly explained design decisions and not fully thought out solutions can cost you a lot of money post-release. Plus, these bottlenecks can cause your startup to lose momentum and block further progress in the long run.

In addition, many designers fail to effectively communicate to developers the importance of the overall design of specific design elements. This leads developers to reduce seemingly irrelevant elements because they do not realise their importance.

Alternatively, a design can be created for a product that uses technologies and methods that have not been fully tested but render them unusable during development. Exploring new components that have never been used before means that developers have a lot more work to do. Innovative design can also lead to interface issues where a Photoshop layout or InVision prototype works fine, but the actual version of the code looks and works bad.

The Solution

Startups need to invest in product design as early in the development process as possible. This ensures that the startup doesn’t miss out on the chance to create a product that delights users because it creates value for them. Happy users translate into increased revenue through word of mouth and positive feedback.

Designers and developers must sit together during the design process to increase the chances of success. This ensures that both teams are on the same page and can quickly discuss each design decision to ensure the customers will get the best design and functional features they can ask for.  

Be careful when trying to come up with unique and innovative designs. As a startup founder, you should be able to tell your development team if you think the design will take too long or won’t work in the long run. Feel free to tell your team to use simple solutions so that the job can be done cheaper and faster than an overly complex solution.

At Evolve, we hold discovery workshops based on design thinking principles with our startup clients, with UX/UI design taking centre stage in startup software product development. Learn more about how we apply design thinking to software project discovery.

Key Takeaway

UX/UI design of a software product should be done prior to any development work. Designers should be able to communicate to developers why each element is required and work shoulder to shoulder with them to ensure seamless interaction between design and functionality.

Challenge #4: Choosing the wrong technology for your software product

The Problem

There is a huge temptation to rush to pick either mainstream technologies (including languages, frameworks, libraries and tools) or new technologies such as artificial intelligence, machine learning or blockchain for your startup product development. Perhaps you have previous experience with product development or have heard of some modern technologies that you want to incorporate into the development process. Your startup may even have the code written using a specific technology, and you don’t want to change it.

Many startups use the latest technologies in the development process. They don’t think too much about the future, focusing instead on shiny new (and yet untested) technologies. However, using unproven technologies will require a larger budget and lead to milestones delivery issues. Developers will take longer and ask for more money to use the technology they have never used before. It also increases risk as it is more difficult to create a high-quality product when a startup is using untested new technology.

Evolve Client Case: How Hastee, a UK-based innovative startup, used an Extended Team in Ukraine to build an award-winning fintech app.

An additional problem with choosing the right technology is that startups tend to start small and scale over time. Choosing a unique or new technology is fine on a small scale when a couple of experienced developers can be found. Scalability is an important aspect of the future.

It will also be difficult to find software development talent experienced in sophisticated technologies to join the development team as it grows. Finally, no one will know how to solve problems during development, since they are most likely using this technology for the first time. Experienced and mature developers will learn how to work with whatever framework or the language they need for your startup. However, this is a problem, since not all solutions may fit ​​your software product’s idea.

The Solution

When choosing the technology to use in the development process, startups need to consider several things:

  • A problem or pain point that your product will fix or resolve;
  • Suggested product functionality;
  • Developer experience level;
  • Your timeline and expected speed of development;
  • Does technology drive the business (i.e., the main investment is in the development of new technologies), or does technology simply contribute to / complement your business model’s development?

Before choosing the right technology, you need to answer all of the above questions. This will ensure that your startup fully thinks through your product’s requirements and selects the best technology that will allow you to communicate your value proposition to your customers.

Regardless of your experience, you may not be aware of all the best alternative technologies for your project. The bottom line is that you should consult with architects, developers and business analysts to consider your startup’s business goals when choosing the right technology for product development.

Since startup founders may not have the appropriate technical knowledge to select the appropriate technology on their own, they should consult with industry and market experts. Hiring tech consultants on an hourly basis to advise on these critical issues can save your startup a lot of money in the long term. It is sometimes appropriate to pay a high hourly fee to answer some key questions early in the development process.

After choosing a technology, find a developer who has experience with that technology. This removes any bias your hired developers might have when they choose only the technology they are most comfortable with.

Finally, be sure to select the right technology before starting any development. Base this choice on things like the market or industry standards and the type of product you are creating, not the experience of the developer you hired. Choosing the right technology is important because there is nothing worse than wasting time and resources on technology that is not right for your software product (and replacing it with the right one when your project is halfway through).

Key Takeaway

It is difficult to choose the technology on which your software product will be based. Do your research to determine what technologies are being used in the market or industry. Also, make sure that developers don’t influence your decision when they focus / insist on using a technology they are comfortable with or want to learn.

Check out How to Choose the Right Architecture for Software Development Project.

Challenge #5: Hiring wrong developers or team

The Problem

Software developers usually have a preferred set of technologies that they like to use. These technologies include frameworks, programming languages, wireframe tools, operating systems, machine learning and AI tools, etc.

They can also nudge the technology they want to add to their portfolio.

Alternatively, you can hire a developer with vast experience in a narrow set of technologies. These programmers are usually unable to switch to other technologies or quickly learn a new one from scratch. They may even opt out of adopting a new technology because they want an even deeper experience with technologies they are already familiar with. These people should be used when the technology they are familiar with will be used throughout most of the project.

Hiring an inexperienced developer is also risky. Junior developers have a limited amount of knowledge and are more likely to fail at solving complex code problems because they do not have sufficient error handling experience. If you want to hire junior developers for routine and non-mission critical work, make sure you have a strong senior developer on your team to mentor and guide them. Otherwise, you’re at risk of building a buggy product vulnerable to cyber threats and paying extra overheads at the post-release stage.

The Solution

The best way to avoid this common software development problem is to look for developers who have experience with startups. These people know what technologies are best for small projects, as opposed to people who are used to working with enterprises and abundant budgets. These developers are also less likely to charge you very high rates that are common in large businesses. It is also important that they are passionate about entrepreneurship and understand the risks involved.

Due to their know-how of working with startups, they will likely also have experience with many different technologies, or at least know someone who knows them well. This allows your startup to really pick the technology that’s best for your product, rather than dwelling on what the developer knows, even if it’s not right for the application.

Also, make sure the development team has a technical lead who can set the team’s pace and mood during development. This leader must be mature and should have experience smoothing out any conflicts in the team. They will provide a healthy and productive environment for your development team, which will positively affect your entire product development.

In general, thoroughly review all potential development team members’ technical background to ensure they are suitable. 

Key Takeaway

Choosing a developer or development team to work on your software project is a difficult task. Your best bet is to hire someone who has experience of working with startups or software similar to yours or your target industry as they will provide you with an insight into the technologies and methodologies that are most appropriate for your particular case.

Check out How to Choose a Custom Software Development Partner.

Challenge #6: Focusing on the customisation of an existing product instead of building one from scratch

The Problem

Most companies choose to customise an existing product to reduce costs and speed up time to market. This is due to a pure desire to make money quickly. In doing so, startups fail to see that they will lag behind the more technologically advanced product offered by their competitors in a rapidly changing technology world.

Configuring an existing solution and adapting it to current requirements can cost startups more than if they simply developed a product from scratch.

One of the biggest challenges with product customisation is that once deployed, the customisation layer becomes very tight and cannot provide resiliency as business requirements change. In such cases, scalability usually becomes a big problem.

Another aspect of this problem is the implementation of temporary solutions. These workarounds are currently preferred because they take less time due to their simple code and design.

This is a problem because code can exist in the product for years and become highly intertwined with other application’s elements. This makes it difficult to remove and replace code that should have been present only temporarily.

The Solution

No matter how much you believe you save by reusing and turning the MVP into a commercial product, this is only a temporary solution. All proof-of-concept products will need to be redone to make them suitable for commercial sale to potential users. Developing a new product is always much cheaper and time-saving compared to customising a legacy one.

There is no time code. Startups should keep in mind that whenever code is reviewed and added to an application, it stays there forever. This will prevent developers from simply adding temporary code snippets to the product to meet the deadline.

In conclusion, startups should always take the time to write genuine code and build products from scratch. This ensures that the software product is built logically and that all aspects of the product are properly connected and work together.

Key Takeaway

Customising an existing product instead of building it from scratch only saves time in the present. Going forward, creating a more permanent product solution will almost always cost your startup more time and money. Also, the longer it takes to integrate into the code, the more difficult it is to fix your workaround.

Challenge #7: Diving headlong into full-fledged product development without prototyping first

The Problem

Many startups believe that they can start building their product after defining its requirements. These startups engage in full-blown product development and invest heavily in the beginning.

However, this raises issues as many startups do not do enough market analysis. Entrepreneurs usually hire developers and programmers to develop without any proof of market fit.

The Solution

Make sure your startup conducts thorough market analysis to ensure that the product being offered matches the market. Make sure all the features specified add value to the product in the target market.

Remember, startups don’t have to include all the requirements in the early stages of development. This will reduce the burden on the timeline and budget that your development team will have to deal with.

Key Takeaway

Startups should always test their product on a smaller scale before fully developing it. This allows startups to collect user feedback and ensure the value of the product on offer. This saves startups both time and money.

Check out How to Build an MVP and Onboard Your First Paying Customers.

Final Thoughts

Now let’s recap key takeaways from each challenge.

  • Startups need to move in small steps.

Improve a couple of must-have features by creating an MVP before moving on to requirements that the user doesn’t need at this stage. Testing on a smaller scale allows startups to assess the marketability of their product. The first simple step is to create wireframes and prototypes of the product.

MVP development also allows startups to evaluate a development partner or development service being used prior to hiring them for full-fledged development. This is important because it is almost impossible to know in advance if the chosen development partner is reliable and suitable.

Regardless of the rave reviews and recommendations you have about a third-party developer, every project is unique, so it’s best to see if the company can deliver on its promise on a small scale. 

  • Make sure your startup carefully evaluates all proposed product requirements against market research results.

By doing this analysis and making sure your startup doesn’t scale up prematurely, your product will be much closer to success.

  • Before starting any development work, make sure there is a clear business plan and a clear vision to guide the entire development, keeping the team on track progress. 
  • Hiring an internal or external development team is challenging.

Try to hire people or teams experienced with startups as they understand the technologies that are best for startups and have a better understanding of the workflow.

  • To effectively and efficiently manage an outsourced development team, startup founders must hire a local project manager (PM) to ensure that work is carried out according to predetermined deadlines and guaranteed quality.
  • While this may seem like a quick and easy solution, configuring existing products is usually not worth it. 
  • Always create a small prototype and MVP before fully developing a software product. This ensures that you don’t spend significant amounts of resources on building functional elements that do not add any value to the user.

We’ll be sharing more startup product development tips during 2021, feel free to subscribe to our blog to stay tuned!

Is software development a challenge for your startup? Drop us a line or call at +44 116 298 7460 to discuss how Evolve can help!

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