tag:blogger.com,1999:blog-78908837626964893892011-07-08T09:31:46.841-07:00Chris Powellhttp://www.blogger.com/profile/04118238536389653517noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-7890883762696489389.post-57318293373476370392009-06-28T03:22:00.000-07:002009-06-28T03:39:44.905-07:00Search for 'Why startups fail' and you will see millions of links to: "Top Ten Reasons Startups fail", "18 Mistakes that Kill Startups".<br /><br />The reasons are fairly obvious, too: cashflow failure, poor management, launching too early, launching too late.<br /><br />Catastrophic failures will invariably cause the business to dive, that much is clear, but rarely (if ever) is any mention made of technical mistakes that slow down and dog the business. These mistakes often require fixing later on - and at significantly higher cost. How do you explain this to your investors?<br /><br />Searching the Web for 'technical help for startups' gives limited and lightweight information. And there is currently a lot of noise regarding 'lean' startups - often implying quick and cheap. The 'detail devil' is constantly lurking, however. It's unlikely, for example, that you'll set up a significant fast moving consumer goods business on a £2-99 per month host.<br /><br />What is actually meant by 'lean', is in the sense of efficient cashflow, that is: avoid burning your cash. Obvious again, and to help on the technical side, pundits will blithely suggest taking advantage of open source, agile software and iterative development.<br /><br />But a majority of startups do not have the technical expertise nor the cash to set up an in-house agile development department. Furthermore, IT is inherently difficult to manage, the economics are not obvious and emerging technologies have to be addressed. There is a constant demand of the IT department by all other departments: IT is at the bottom of the heap. It is a point that has to be carefully managed.<br /><br />Consequently, startups, and Web startups in particular, outsource their development. The management of this process is significantly different.<br /><br />A little while ago I went to see a startup who were looking for an interim CTO. There was no technical expertise present and the startup team had outsourced their design and development. They were not sure what platform, what database, or what languages were being used. They did not have any form of project management, not even a checklist.<br /><br />Consequently, they had no idea of whether their product was robust or accurate or whether it would perform to expectation. Furthermore, what could I tell them about the switch to a new hosting provider - was it going to be a smooth process?<br /><br />They are not an isolated case. We (at <a href="http://workingName.co.uk">workingName</a>) conducted a survey in June 2009 which indicated that close to two thirds of early stage startups are, or are considering, outsourcing development to an agency and of these, 50% are seriously considering offshore development.<br /><br />Interestingly, 20% of those surveyed considered they had sufficient technical nous to handle the process. On the other hand close to 60% of these startups without expertise are not considering getting in high-level technical staff before offshoring starts.<br /><br />This may indicate why a large number of outsourced projects do not go well. Some estimates put it at 40% failure rate for startups offshoring their development. Given the naivety of some startups and also given that most outsource companies are more used to dealing with established firms, this may not come as a surprise.<br /><br />The trick then, is to appear like an established business but also to have sufficient knowledge to deal with the detail of managing a development project. <br /><br />The first is relatively easy. Don't arrange meetings in a noisy coffee shop, use a virtual office to handle calls, dress the part and so on. As for the second, you should have some idea of the processes required. Some form of project management expertise (useful in any sphere) is a help and and you should buy, beg, borrow, steal all the technical expertise you can find to help deal with your development agency.<br /><br />For example:<br /><ul><li> Are you confidant the agency will produce your site accurately and quickly?</li><li> Have you produced a design and business process design with which they can work?</li><li> Are they offering 'Hot Sapphire' on a Goulash appserver with a SQueeG database? (Hint: The wool's being pulled over your eyes).</li><li> What is the best way to get the most out of your agency?</li><li> Would you be able to take the development smoothly in-house later?</li></ul><br />Just as much as the commercial section may be bemused or even horrified to find a hardcore games geek being told to handle a sales closing process, you will need more than a marketing degree, and a degree of hope, to avoid the mistakes that can be made on the technical outsourcing side.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/7890883762696489389-5731829337347637039?l=startuptechhelp.blogspot.com' alt='' /></div>Chris Powellhttp://www.blogger.com/profile/04118238536389653517noreply@blogger.com0