Already years ago now, in the technological team industry, arose a framework to tackle the speed with which software products must be released (especially to the market) with quality, and meeting the dynamic changes of the business. This framework tried to imitate the way in which rugby players carry out a field formation with the objective of putting the ball back into play again and again after just one minor foul. This formation is known as Scrum. From there comes the term that is also applied to the development of software products. Constituting one of the most popular agile methodologies in the whole world.
Rugby? Software? Scrum? How does all this work in our industry then? The idea consists of defining roles and seeing to the end a series of practices through a software project. In a continuous and periodical way that enables the client to confirm advances at any moment. Not having to wait for the entire product to be built to see it working. In the same way, that in Rugby. They put the ball back into playtime and time again. In our industry, we obtain new versions of software constantly.
The job of Scrum implies the definition of a series of specific roles meant to execute the project in an efficient way:
The Product Owner is who represents the client and is in charge of conveying what the idea is and how exactly the product is desired in business terms.
Scrum Master, is the person in charge of facilitating the development of the Scrum process; supporting the team, and making sure that everything is executed in the correct way. This is the role responsible for connecting the needs of the business with the execution of the project in terms of methodology, functions, and techniques.
The team is the group of people that form the development team of individuals. In accordance with the needs of the project, which will include Developers and Quality Control amongst others.
How does it work?
Now then, it’s important that you know a little about the day-to-day process of a team that works in Scrum. As we have stated, under this modality one works in short periods of time; these periods of time are known as Sprints and can last between two and three weeks. Each Sprint starts with a planning meeting when one specifies exactly what the task to be carried out is; in the given period. This is how the execution of the Sprint starts. Daily meetings are carried out to learn the state of advancement; these meetings are known as Daily Scrums.
Afterward, a Sprint revision meeting is had which is the moment when the client can see the advancements of the product through a Sprint DEMO or Sprint Review. Finally, the Sprint concludes itself and it opens the door for the next step. With a feedback meeting to highlight the positive aspects achieved and revise plans for continuous improvement. This scenario is known as Sprint Retrospective.
What about Cafeto?
You’ve probably read in some of our posts that at Cafeto Software we always seek to work with Scrum as a development methodology. And we do it effectively as we are convinced of the important benefits that contribute to everyone involved in the project. For example, you as a client will be able to see the development of the product first hand. Make adjustments to it, and even use some of its features. Moreover, you will be granted better control over the timing of the project: as you will participate in an active way. So, to conclude one could say that in general Scrum allows for a drastic decrease in the factors that put the project at risk.
Software development for startups is facing uncertainty due to the economic crisis in the United States. Inflation, the impact on production lines, a falling stock market, and a slowdown in fundraising are examples of these situations. We are going to look at alternative actions for your company.
How to deal with the economic crisis in your startup
Year-on-year inflation in the United States has far exceeded Bloomberg estimates, reaching 9.1% in June. In fact, it is the highest figure reported by the Department of Labor’s CPI (Consumer Price Index) since 1981 (Santillán, 2022).
How can your startup cope with this inflationary crisis and minimize its adverse effects? Cafeto addresses this issue because of its importance and presents you with three factors to consider in helping you manage this crisis:
Focus on wages
Saving on supplies.
Outsourcing to achieve your business objectives and mitigate risk.
Factor 1: How to address wages in the face of rising inflation?
Inflation shocks and market volatility force companies to consider special measures.
There is an escalation in the costs of operations, services, and supplies and an increase in interest rates. This is a critical time for Covid’s post-pandemic recovery. Consequently, your company must be careful in its investment planning, especially in an inflationary period.
Is decreasing wages a solution? Even if you consider it an option to try to make ends meet, inflation quickly outpaces wage settlements (Benedito, 2022). The following two questions help us to analyze this point:
What is the top of the wage spiral in the face of an inflationary crisis?
It creates a vicious circle that, in the case of those involved in software development for startups, for example, a custom application development company, leads to a constant request for increases.
But these measures cannot be endless in an adverse economic environment. To maintain a competitive position, the focus in startups should be on keeping salaries and including non-monetary benefits for your employees, not increasing wages.
Is it advisable to decrease salaries as a cost-saving strategy in a crisis environment? Decreasing salaries may be a decision you see in other companies or sectors, but it is a risk. Technology startups are in an industry with a high demand for professional staff, and companies compete for human talent. Lowering your team’s salary conditions may invite them to migrate to other companies, including your competitors.
Does passing wage cost increase the price of your services?
Application development services companies cannot always pass on costs in their final prices. Doing so means losing competitiveness in a highly competitive industry.
The moment costs rise due to progressive and constant increases, your company will have to reduce its profit margins and investment.
This is not a favorable scenario, so raising wages or passing on costs to the customer is not advisable, as it may jeopardize your company’s survival.
Factor 2: saving on supplies associated with software development for startups
One way to make savings in your startup is to focus your investments on the essentials to deliver better products at a lower cost. Some office services can be outsourced at desirable prices, which means internal savings on supplies and equipment.
Another cost-saving strategy is to develop a Minimum Viable Product (MVP). You have two options to create it without resorting to full development costs (Movistar, n.d.):
Lo-Fi MVP
It is a Minimum Viable Product developed with the initial functionalities of the business. To create a Lo-Fi MVP, formats that are simpler and require less investment are used:
Demonstrative, explanatory, or short videos.
An advertising campaign with a digital mock-up of the product.
A landing page where you validate the user’s interest in a specific service or the effectiveness of your communication strategies.
Hi-Fi MVP
This Minimum Viable Product includes a set of core functionalities and conveys a value proposition to your customer. As products, they are more complex, but they also allow you to evaluate the viability or not of software solutions in your startup.
Advantages of a software MVP
It helps you to test the perception of customers, users, or the public.
It allows you to collect product acceptance data and detect improvement areas.
It helps you evaluate your product interaction and how it satisfies the audience.
Opportunity to evaluate your value proposition and get feedback from real customers.
Incorporating the use of MVP software development is a way to save your startup money, avoiding high costs and risks. Major technologies such as Dropbox and Amazon were developed based on the MVP (da Silva, 2021).
Factor 3: software development for startups, outsourcing as a strategy
Software outsourcing is also an option to keep your company growing in times of crisis.
Reasons to choose to outsource software development for startups
Expand your teams with skilled, motivated, and productive professionals.
Deliver a project in a reduced timeframe or take advantage of a window of opportunity.
Have support from project ideation to final stages and maintenance.
Accelerate your development capabilities and specialized support.
Outsourcing the software development team, but have specialists close to your business culture (Nearshore IT Outsourcing).
Benefits of outsourcing IT services and software development
— Quick access to quality resources through a specialized provider.
— Savings in processes and time for in-house contracting.
— Flexibility in contracting schemes.
— Scalability of professional teams according to the requirements of each specific project.
— Having experts for precisely the time your startup needs them.
— Greater productivity at a reduced cost, as you have outsourced high-level professionals focused on developing efficient solutions.
— Hiring IT services with cybersecurity solutions that are more up-to-date, complete, and effective than those available to your startup.
— Possibility of incorporating disruptive technologies: artificial intelligence, IoT, robotics, virtualization, blockchain, immediately and at a lower cost.
— Development of innovative, competitive solutions that will differentiate you in the market (Entrepreneurs, 2020).
Types of outsourcing and which areas to outsource
IT staffing to strengthen your teams and accelerate development projects.
Nearshoring, to offer you outsourcing services with culturally close teams.
Project outsourcing or teams dedicated to specific projects.
Multisourcing, with teams of different profiles, experience levels, and multidisciplinary (Guerrero, 2022).
Areas you can outsource in your startup
Business development services so that your startup is supported by professionals capable of presenting your business ideas effectively to potential investors.
— Web development and management of your social networks.
— Data protection, digital assets.
— Fintech or financial technology.
— Management of IT security services or legal services.
— Support, maintenance, and resolution of incidents and problems that may affect your employees, customers, or users (FIBK, 2020).
The crisis is also a time of opportunity for your startup
In the first quarter of 2021 alone, more unicorn companies were created than in the whole of 2020. These are mainly disruptive technology and digital solutions startups, with valuations exceeding $1,000,000.
On the other hand, zebra companies seek to be more sustainable over time, maintain their turnover, face the day-to-day with realistic prospects and grow (Blanco, 2020). To face the crisis, companies rely on collaboration. They transfer processes, services, or the development of activities to specialized external companies. They are expanding their project teams by increasing their staff with professionals and technicians located inside or outside their workspaces.
Software development for startups: a bet for success
The economic situation indeed generates uncertainty, but there are also business opportunities that your startup should not miss.
Whether you opt for a profit and exponential growth strategy like a unicorn startup or sustainable growth like a zebra startup, outsourcing application development services is an alternative.
You can address the inflation crisis with software development for startups considering cost savings, MVP creation, outsourcing processes, people, or solution creation.
Nearshore Outsourcing, Outsourcing, Software Development
May 12, 2022
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Cristian Leonardo
If you have a business idea related to software development or the new Unicorn App but only have sketches on a napkin, join us every Friday at 11 am CST where we’ll talk about how going through a discovery process will unveil the high-level aspects of your product, and provide you with a functioning prototype for you to go to investors and raise capital! More importantly, we’ll triage your product and provide you with a quote FOR FREE!
