Startup Software Development : Best Practices


Whether you are a SaaS startup business owner or a CTO looking for a software solution to ramp up and optimize your business, you should know a thing or two about the major challenges and the available options for startup software development.


Startup organizations need to be able to learn and act fast if they are to compete with more established businesses and brands.

The right software will be flexible enough to meet a startup’s specific needs and help them to quickly transform their unique ideas into unique products.

Just as importantly, Saas businesses have to be able to develop software that integrates with a number of various business systems and processes used by multiple and varying businesses and organizations.

The purpose of SaaS is to provide tools and technology to companies to create and maintain their products without having to spend lots of time and money building custom tech solutions themselves.

The following post will cover the main challenges in software development, currently available options for making startup software products, and some of the best practices to date to aid in software development.

Challenges in Startup Software Development

Before searching for a software solution or designing one yourself, you need to understand the problems you want your software to solve.

The four biggest challenges for startups involve scaling, security, funding, and people.


If you think getting new customers and users is hard, wait until you start trying to scale your business. 75% of venture-backed startups fail and one of the main reasons is scaling issues.

There are three major problems startups face while scaling:

  • Shifting Team Structure & Focus
  • Higher Expenses
  • Becoming too Large to Adapt

Team Structure & Focus

Growing companies require more focused and specialized teams to handle all the new problems that come with rapid growth.

This usually means spending more money and time finding, hiring, and onboarding new employees.

Higher Expenses

As the number of users and customers increases, so do expenses.

Besides hiring new talent, growing startups have to budget for increased infrastructure, new servers, marketing apps, and back-end software, to name but a few.

Becoming Too Large

Continuous growth is great until it isn’t.

One of the main drawbacks of becoming too large is having to implement inflexible and time-consuming business processes to handle a massive customer and user base.

Complicated business processes can stifle ingenuity and flexibility.

Another issue with large companies is that when they mess up, everyone hears it – one power outage or app defect and your brand gets ‘blasted’ all over social media.


Startups have enough issues to deal with without having to worry about cyber-attacks.But worry they should. 43% of cyber-attacks target small businesses.

The three major security breaches most commonly seen are in the fields of applications, infrastructure, and employee access.


Application Security: not enough password policies for users and customers, and not running enough penetration tests, can cause major security breaches in your software.

Infrastructure Security: forgetting to backup databases, encrypt sensitive data, and not allowing limited access to resources through a VPN leaves startups and small businesses open to cyber attacks.

People Security: password policy management is a must for keeping company data safe, especially when employees are trying to access it away from the office.


Startups initially seek funding for their business ideas through friends, family, and personal finances but as the business grows larger, it needs cash injections to propel it further.

Most of the successful startups have raised capital from external sources through three series of funding rounds – Series A, Series B, & Series C.

Three potential problems arise when seeking funding:

  • Determining how much money to ask for.
  • Choosing the right funding option.
  • Spending funding wisely.

Determining How Much

Many startups make the mistake of thinking more funding is always better. Too much funding can lead to premature scaling, one of the main causes of business demise.

To figure out the right amount to ask for, it helps to have a business plan with a realistic financial forecast.

The Right Funding Option

Choosing the wrong funding option or too little of them can kill a startup before it even starts.

Today, there are many funding options to choose from but the most notable include:

  • Self-Funding
  • Bank Loans
  • Angel Investors
  • Venture Capital
  • Crowdfunding

Each of the above options offers advantages and disadvantages.

Your startup is unique, so only you can decide which one is the best fit – you may need to choose several of them to get your business off the ground.

Spending Funding Wisely

Spending funding on unnecessary items like luxury furniture, extravagant business trips, and savory lunches will most likely prevent future financing from external sources.

You can use your funding wisely by purchasing the necessary technology to support and assist your product development and marketing efforts.


There are many reasons startups fail: scaling too early, not solving market needs, and lack of funding.

Far too often, startups make the mistake of overlooking one of their largest obstacles to success – people issues.

These include hiring the wrong people, promoting them prematurely, as well as problems with the founder.

Hiring Issues

Team efficiency is vital for new businesses. The third-most common reason for startup failure is not having the right team.

Hiring people with the wrong skill set, lack of HR resources and decision-maker conflicts result in ineffective teams.

Premature Promotions

Premature promotions occur in two ways::

  • Upgrading employees from a lower position to a higher position with more responsibilities before they are ready.
  • Promoting your best team members to management when they lack leadership skills.

While startups may be in a hurry to grow their business, forcing employees to take on challenges they are unprepared for leads to stagnated growth and ingenuity.

Founder Issues

Co-founder startups always outperform solo-founder startups.

Co-founder teams with both sales and technology skills see 2.9 times more user growth than solo-founder teams with unbalanced skill sets.

Simply stated, one-man startups take longer to grow because a single perspective is not enough to detect all of the company’s current and potential weak spots.

Options For Making Startup Software Products

This section will cover four software development team options.

Knowing which development option is optimal for designing and providing the technology you need at an affordable price will ensure that you hire the right people for the job.

Technical Co-Founder

A technical co-founder oversees all tech-related processes in the company, in return for a share of the overall profits.

Do you need one?

We’ve already mentioned that co-founding startups with sales and technology expertise outperform and outlast solo-startups. However, your current technical skills will be a major determining factor in whether you need one or not.

Consider the following questions before making a decision:

  • Do you lack the technical skills and abilities to lead and support software development?
  • Will your software rely on technologies that must be scaled as the business grows?

If you don’t have enough technical expertise for software development and support, or the success of your startup is dependent on software that requires constant scaling and innovative features, then you will probably need a technical co-founder.

If you do decide to hire a technical co-founder, be sure that they have leadership skills along with the technical expertise you are looking for.

Assessing their technical and leadership skills is as easy as reviewing their past work history and just getting to know them better on a more professional and personal basis.

In-House Development Team

There are many benefits attributed to establishing a software development team from your current staff.

  • Collaboration becomes easier when team members are already part of your work culture.
  • Less time and money is spent on onboarding employees in regards to your software development and business goals.
  • More direct and constant engagement leads to quicker response times, better product development, and a more efficient work environment.

Utilizing an in-house team, however, comes with its own set of drawbacks:

  • Fixed payrolls, health insurance, and vacation days are all required to keep employees loyal and motivated to the company and its projects.
  • Allocating candidates for a software development team far too often becomes an unending process that diminishes focus and attention.
  • Continuous training is required to maintain skill sets that are necessary for software development.

As can be seen, employing an in-house team has its pluses and minuses. It is your job to figure out whether the benefits outweigh the drawbacks enough to warrant the time and effort required to create one.

Hiring Freelance Developers

If you are looking for a professional developer with a specific set of skills (e.g. UI/UX design, data analytics, front-end development), then hiring a freelance developer might be a good idea.


Freelance developers are great for specific projects that require a unique skill set. There are several advantages to hiring a freelancer:

  • They usually charge much lower rates than other software development options.
  • They are great for one-time development projects that do not require full-time staff.
  • They take care of their accounting, taxes, and other legal issues.

However, there are also several disadvantages to hiring a freelancer:

  • They provide very little maintenance, if any, once the project is complete.
  • They tend to work at their own pace, so keeping track of their progress and managing them can be quite difficult.
  • Since they have multiple clients with specific deadlines, they sometimes rush their assignments, delivering low-quality work.

Hiring a freelance developer is ideal for startups meeting the following criteria:

Remote Locations: companies that are located in areas far away from skilled labor and startups whose development teams already work remotely.

Growth Stages: companies in the beginning stages of development where an in-house software development team would be too costly and time-consuming.

Unpredictable Workflows: startups who do not yet know if they need full-time developers and whose workflows fluctuate at different times of the year.

Temporary Projects: startups whose clients have strict deadlines – freelance developers will start work immediately without any onboarding delays.

Outsourcing a Startup Software Development Agency

What do Slack, WhatsApp, Google, Alibaba, and GitHub all have in common?

They are all successful companies that outsource their software development.

In the beginning stages, it is almost impossible for startups to predict whether or not they need an in-house team for their software development needs.

Outsourcing to a software development company is ideal for startups on a tight budget since you only pay for development when you need it. 

Some of the main advantages of outsourcing a software development agency are as follows:

  • Fast release and shorter lead times from idea to finished product
  • Tools like web applications and javascript are provided to help business optimization.
  • Software development companies help eliminate time pressure and lack of resources, allowing you and your team to work more efficiently and produce more innovative products.
  • Lower startup costs and training due to advanced technology and the latest development tools.
  • Specialized service and software eliminate the need for knowledge and insights that only come with experience.
  • The ability to scale up or down based on current needs.
  • The ability to start projects sooner due to resources, tools, knowledge, and expertise provided by software development agencies.

There are some risks, however, that you should be aware of when outsourcing software development, including: 

  • Data Exposure
  • Miscommunication
  • No Established EMP (Exit Management Plan)
  • Improper Evaluation

The good news is that these risks can be mitigated to a large extent by following a specific set of outsourcing software development steps that are relatively easy to employ.

Best Practices for Software Development

There is no “one size fits all” software development procedure as all software development projects have their unique requirements and challenges.

However, there are some software development best practices that make the process much easier. The following section outlines four tried and true tips for creating a successful software development strategy.

Find a Right Software Development Framework

If you are going to develop applications, you are going to need a framework in which your developers can build programs.

General Frameworks

There are two general frameworks you can choose from: .Net core and .Net.

.Net Core

This framework uses open-source language to allow cross-platform software development.

.Net Core is the best choice when cross-platform applications are required and when different technologies need to be mixed for mobile software development.


.Net is a single-platform framework (Microsoft Windows) that has robust language support and integrates easily with other Microsoft products.

This framework is the best choice for when you need applications that require a Window-based foundation.

The above two software development frameworks include both backend (server-side) and frontend (client-side) frameworks.


The top three most popular backend and frontend frameworks are as follows.

Backend Frameworks

Express: minimal, fast, and flexible.

Django: a model-view template framework that uses the Python programming language.

Rails: a model-view-controller framework that uses an open-source programming language called Ruby.

Frontend Frameworks

Angular: a frontend framework that specializes in single-page applications.

React: considered more of a frontend library than a framework, it is nevertheless quite popular among web developers because it can be used client-side and server-side.

Vue: a trendy JavaScript framework that is capable of building complete frontend applications.

Choose the Best Programing Language for Your Product

Creating software products is more than just selecting an eye-catching layout and designing a user-friendly interface.

Software development requires a specific coding language to bring its intended functions and features to life.

While startup founders do not need to know how to code themselves, some basic knowledge of programming language is needed to communicate effectively with in-house teams, freelancers, and outsourced development agencies.

Here is a list of five of the most popular software development languages used today.

C Programming Language

C is the oldest and one of the most popular programming languages due to its portability – it can be run on many different platforms.

While its influence can be seen on almost every electronic device we use today (e.g., car electronics, cell phones, and alarm clocks), it does not support object-oriented programming (i.e., programming that contains both data and functions).


Java owes its popularity to its versatility – it can be used to create mobile applications and video games.

Even though it is extremely user- and design-friendly, it does tend to run a bit slow.


This commonly used programming language can add interactive elements into a website through a browser rather than a server.

It can also be used to create applications as well as video games.


Google’s programming language of choice, Python is an easy-to-learn open-source language that can be used for almost any web development project.



Ruby is considered by many startups, past and present, to be the best programming language for web applications.

Airbnb, GitHub, and Twitter were built using Ruby.

Even though Ruby is a very flexible programming language and can get a product up and running in a short time, it is extremely difficult to maintain at scale.

Know Your Wireframes

Wireframes are a software product’s design blueprints. They produce a visual representation of the structure, navigation patterns, and display rules of a software interface.

They are a vital part of software development as they allow developers and development teams to create a draft of the product before producing a more polished version or prototype.

Here are some important areas to look at before starting any wireframing work:

  • Intended Users
  • Business Goals
  • Content Organization
  • Logo/Message Location
  • Call-To-Actions
  • Page Layout

The following is a list of important design elements to consider before wireframing:

  • Simple Design (minimizes distractions)
  • Rectangle/Square “X” (shows were an image will be)
  • Play Button (for videos)
  • Different Font Sizes (help depict content hierarchy)
  • Clear Call-To-Actions (easy navigation)

Some tools that can help you with wireframing include:

Balsamiq: the best wireframing tool for beginning developers.

InVision Freehand: a web-based wireframing tool that has collaboration features built-in, such as a whiteboard canvas.

Sketch: built for third-party application integration.

Marvel: pre-designed wireframe templates that offer collaboration features, as well as prototyping and code handoff.

Moqups: uses an HTML-based platform along with drag and drop features to create wireframe design flows.

Select the Right Development Methodology

There are various ways to organize the two main phases of software development (i.e., design and development).

Your job is to figure out which phase to focus on.

Will your development team spend the majority of their time developing a fixed plan or adapting to challenges during the development process?

Selecting the wrong software development methodology (SDM) can run a project over budget and create delays.

The selection process is rather straightforward as there are only two methodologies to choose from: traditional and agile.

Within each of these two categories, various development methods can be used and tailored to suit a business’s specific software development needs.

Traditional methodologies are more plan-focused and require lots of analysis because the project is planned out meticulously before it begins. With agile methodologies, there is no initial planning necessary. Teams can adjust their approach if the product requirements change.

This makes traditional development methods better suited for more seasoned, stable, and predictable businesses who know exactly what they want and how to get there. An agile approach, on the other hand, is perfect for startups. 

Utilizing an agile methodology gives startups the following benefits:

  • Enhanced Collaboration Among Distant Teams
  • Higher Software Quality
  • Higher Customer Satisfaction
  • Shorter Time to Market
  • Lower Development Costs

Agile methodologies allow startups to improve and optimize their development process when they need to without having to worry about sticking to any rigid plan or process.

Develop and Profit

Startups rely on new and innovative software solutions to get their products and services to market faster to start competing with bigger companies in their industry and make a name for themselves in the process.

However, there are many challenges when creating software for startups that can destroy ideas before they ever have a chance to materialize.

Understanding the challenges, options, and best practices for software development is essential for building a practical, efficient, and timely development strategy that creates products that solve market needs and builds a large and loyal customer base.


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