Tech startups are either centered around software and technology solutions or rely on them to provide their services. If the founders lack the experience necessary to develop the tools and resources required, they’ll seek out a software development company to build a custom solution. That’s where 7T comes in.
Many entrepreneurs are excited about their startups and have big plans to develop a custom software solution or mobile application. However, the reality is that many do not have the funding necessary for the development project that they envision.
From a software development standpoint, we’ll look at two types of startups – “well-funded” startups and traditional startups. We’ll also examine the benefits of custom software development for startup companies.
Traditional Startups vs Well-Funded Startups
When startups lack the funding they need for a software development project, they have a few options. Here are three common approaches:
1. Outsource their development project to an offshore development team.
Offshore development can be a much more cost affordable option for businesses looking to develop a mobile app or custom software solution on a budget. Some common concerns or challenges surrounding offshore development include:
- Language or cultural differences that hinder communication
- Time zone differences that can put a strain on coordination and logistics
- Unmet expectations for project requirements, functionality, and quality
- Limited legal recourse for failed or neglected projects
However, there are also many offshore development teams that provide quality work and are a great alternative to domestic development for startup companies. For companies that don’t meet the project requirements or have the budget necessary for a full-fledged project, connecting with a reputable offshore development team may be the right choice.
Some domestic development companies may even have connections to offshore developers, whether it’s for outsourcing portions of development work to keep project cost low or referring low-budget clients to a reliable resource. Since software development companies are more familiar with the industry – and who produces the highest quality work at all price points – it doesn’t hurt to ask to be referred to another software development company in your price range.
2. Choose a phased development approach – MVPs and MMFs.
Other businesses that still value domestic development may opt to go with an MVP or MMF approach to software development.
MVPs, or Minimum Viable Products, focus development on certain core features to ensure user adoption before pouring the time and money necessary for a complete software project. MVPs are great for gauging user demand and ensuring that the solution will meet their needs.
MMF stands for Minimum Marketable Feature and may also be referred to as a minimum marketable product or a minimum releasable feature. While also focused on developing core functionality first, rather than validating user adoption and market demand, MMFs are utilized to get a solution into the hands of users fast so that they can start benefiting from the product. Then, startups can continue to add additional features as they become more established and gain the funding needed for further development.
Working MVPs or MMFs are often essential assets startups can leverage as they work to secure funding.
3. Delay development until funding is acquired.
Some startups aren’t aware of the cost of developing custom software and determine that they will have to delay development until they can secure funding. In the meantime, they may choose to adopt an out-of-the box solution or put a hold on their development project. There are multiple ways and avenues that startups can receive funding.
Fundable shares the three main categories of funding for startups: bootstrapping, debt and equity. They also compiled and ranked the top sources of startup funding, summarized below:
- Bootstrapping – Personally funding your startup.
- Personal connections – This can include family members, friends and other people you know that are willing to fund your vision.
- Venture Capital – Private equity or financing provided by investors, investment banks and other financial institutions to startups that display long-term growth potential.
- Angel Investors – “High-net-worth individuals (HNWIs)” or “self-made investors” are often entrepreneurs themselves, serving as another source of funding for startups.
- Banks – Banks can provide funding to startups in the form of small business loans.
- Crowdfunding – The crowdfunding model is often organized online and is based on compiling small donations from a group of people.
Once you secure the funding you need, your chosen software development partner can help turn your vision into reality.
Startup Advisors and Software Development Partners
Startups often look to independent advisors to help them navigate the startup process in exchange for a stake in their company. In some cases, startups can turn to a software development firm for similar guidance. The benefit of working with an experienced software development company is that they can offer expertise and industry knowledge fueled by a team versus an individual. Software consulting services are invaluable for startups throughout the development process.
A development partner will help you identify your software development needs and design a custom solution that can be improved upon as your startup grows. When done effectively, developing a relationship with a software company you trust early on will provide you with a long-term development partner that can help your startup scale.
Work with 7T, a Trusted Development Partner
7T has worked with multiple funded startups, including Capital Works, Dottid and MediBookr.
As a private capital marketplace, Capital Works connects private businesses to growth strategies, untapped capital, and exit options. Dottid applied innovation to transform, digitize and optimize the real estate leasing process. MediBookr leverages natural language processing (NLP) to analyze patients’ symptoms and match them with healthcare providers.
Working with startups is inspiring, because entrepreneurs are hungry for the digital transformation and software consulting services that 7T provides. We love seeing businesses that we’ve worked with make waves in their industries by embracing innovation and transforming their piece of the market.
Whether your business is looking for a custom software solution, mobile app development, cloud services, or data management tools, the team at 7T can help. Based in Dallas, we work with clients across the U.S. and beyond. To kick off your development project, reach out to our team today.