10 Software Development Tips to Get Early Funding for your Startup

If you’re thinking about, or are already working, on a startup, it’s likely that at some point you will attempt to raise an initial round of funding for your venture. This article covers some of the very early development techniques and strategies to help your startup be well positioned to receive the initial round of investment capital.

1) Understanding What Investors Want

Professional early-stage investors typically look for a number of things in early Web startups. While investors often tend to look at things like the market the startup is in, and the product potential, these often have little to do with actual software development of the project. When it comes to the software development of the actual product, investors look for a high quality balance of technical skills on the founding team. High quality here implies that the people are not intern-level, but rather competent professionals at their craft.

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Investors will look for the product to have good design as well as compelling and innovative features. That already implies at least 3 skill sets: design, engineering and product vision.

Potential investors will also most likely only consider the company as an investment if the company has a product in the market, and there are measurable signs that the product is gaining some traction with users. This tells the investors that the team can work together to produce things, and the things that are produced are of high quality and savvy.

2) Battling Limited Resources

Prior to securing funding, startup teams tend to be comprised of under five people and sometimes just one person. Commonly, there are one or a few engineers, and one or two business people. That means that the innovative feature set your new company is creating may not be completed in its entirety any time soon. You must decide which features will be crucial to the core business and which are just very nice to have.

Remember, since we are discussing the pre-funding stage of your company, if you spend too long before you get your product to market, that will be coming out of your own pocket. Your goal at this stage is to create the type of business-requirement to software engineering cycle that will help you rapidly release the very initial product and ensuing features, so that the first customers can begin taking a look at it.

3) Perfect Development Capacity

During the intense push to bring the product into the market, your team must be firing on all cylinders. Just about everyone should be contributing about 6-7 days/week and definitely over 8 hours on most days. The way your team functions at this most crucial point is the way things will be from here on out. The initial company culture is set, and as one of the core founders you must be vigilant and search for weak links in the product development team.

The early-stage development team must also pay attention to detail and focus on product quality. I realize this is a bit of a contrary point to the suggestion of working fast, but the emphasis here is to strive for very high quality with the features you do decide on building. Whatever you do put out into the market will reflect on your sense of professionalism.

If the product is of low quality, after it goes live, your marketing efforts will face continuous uphill battles as potential customers and sometimes investors will be underwhelmed and leave the site right away.

4) Inevitability of Cutting Corners

Considering that your resources are limited, a practical approach might be to very carefully choose which features you can forego, and which parts of the product must absolutely be there. This decision will be crucial to spending the right amount of existing resources (time and the very limited money you have) on the very necessary features.

Since the first impression your product makes on people will come from the product’s appearance, design and logo are something that you absolutely cannot skip. Even if you do not have a professional designer on your team, allocate the most visual person to stitch together the most workable design that possible, so that it does not drive investors away.

Some people may argue that smart investors would not look at design. For that argument, I should clarify that the investors will not be looking at your design for the sake of beauty. The design of your site will be their first chance to gauge your level of attention to detail, understanding necessity and right focus on product quality, and your level of aspiration to professionalism.

5) Where to Cut Corners

Since the UI and design must be the absolute best they can be in order to make your team appear as a type of a team that aspires to build great products, you must look for other places in your architecture to cut corners. There isn’t much place to cut corners on the database architecture

side of things. Just don’t over-optimize it for scalability by building various levels of cache. In the beginning you likely won’t need scalability. This is something that is more of an appropriate focus for a later stage if the product takes off.

The last place where you can cut corners is on the server and business login side of the application. I hate to suggest it, but since we must choose a place to cut corners in order to gain development speed, you may consider having an extensive test suite, or refraining from using an interesting new technology that may require a bit of time for a learning curve. You can always get to those things later, but when you are rushing to push a product to market, and let the product have a chance to gain traction, you may want to consider skipping whatever can be done later.

Consider as an analogy how things operate in even an established restaurant. The customers walk in and the presentation layer is spotless. The tables are lined up perfectly, the table cloths are clean, with wine glasses and silverware sparkle, and the place looks impeccably clean. You have a great impression. The same restaurant may have an incredible mess of a kitchen where the people working there are rushing and scrambling to feed the people waiting for their food. If the customers ever saw the mess and chaos that goes on in the kitchens of even the good restaurants, many of them would never come back. But the customers never see the kitchen. They just see the presentation layer and taste the eventual food which was hacked together by the chaotic kitchen.

6) Will Cutting Corners Come Back To Haunt Me?

Cutting corners will, of course, come back to you. Ironically enough though, not cutting corners and being slow will also come back to haunt you. So you just have to pick your poison here.

If you are creative enough (which is a must in a startup), you can find the silver lining and even use your product’s inevitable shortcomings to help you. For example, since you have no testing department and have cut corners to release the product, you will definitely have many bugs in your software that your users will discover. This is at the same time very bad, but at the same time can be an amazing way for you to get into a dialog and conversation with your error-encountering users.

When I was launching Hiking San Francisco, which is a local California site run by one person (myself), I added a snippet in the catch block of each try/catch to send me an email with the error and the information of user who had this error. That way by immediately seeing the errors and who had the errors, I was able to proactively do tech support with those users by emailing them directly, often within two minutes of the error, and telling the user that I am aware of the error and fixing it.

Many of the users replied and appreciated that I was so proactive. In a number of such cases, this proactive approach to supporting my site’s users, created a working relationship with those users of the site, and they continuously gave me feedback of what was wrong with the site and what could be better. Today, some of the best features of that site can be traced back to the suggestions by the people who initially had errors, and to the relationships I forged from making the best out of a situation where I knew I’d have many bugs in my software.

7) Cheap and Free Tools

It isn’t a startup if you aren’t trying to get everything for free or at least very cheap. I wanted to suggest some helpful of free or very cheap tools that may help you in early stage development.

For making great-looking buttons and visual components of your site, try this site named CoolText, which may save you from having to buy expensive Adobe tools. It has helped me stitch together various UI components despite myself being a non-visual person.

Another tool that is great for collaboration and the coordination between the developers on the project is the Basecamp suite. I don’t actually use it, but many people in the startup world swear by it, so I’ll leave it for you to be the judge of whether it is something that can be useful for you.

As a disclaimer, I have absolutely no affiliation with either tool I mentioned above. I am just an avid user of the CoolText site.

8) If At First You Do Not Raise Funds

The reality for most startups is often a self-induced unpleasant one since they hope for the best and the absolute best is rarely the first thing to happen. After launching a product and getting some initial users (who vary in satisfaction), many entrepreneurs go right to the angel investors and try to raise capital. Unfortunately, not all startups get investment on their initial round of pitching various investors. In fact, many startups never get funding.

What the founders must do in order to increase their chances to secure an investment is to listen to the investors for reasons why they were rejected. Likely, many of the reasons why the investors may reject a startup are often similar to why actual users may decide not to use the startup’s product.

Luckily, very often the reasons for initial rejection are easily fixed or improved. The task of the engineers of the startup is to create an environment where the loop of customer-feedback

to product-creation is minimized. If that is the case, the initial rejection feedback can be taken, considered, new features or improvements conceptualized, and the product adjusted; all in a very short time.

9) Startups Who Struggle Finding a Technical Co-Founder

When people whose skills are in marketing or business development come across a great idea for a Web startup, they often find themselves struggling to find a great technical co-founder. Many people opt to hire an outsourced team from a 3rd party agency to build their prototype which can

be taken to investors and customers as the initial product. Despite understanding the dangers of having a 3rd party agency handle their code, but often still opt to just because there is no technical co-founder.

If you are considering to outsource the development of your crucial software to a 3rd party agency, remember this rule of thumb: You must always own your code and have people on your team comfortable understanding, navigating, and modifying any part of the code that makes up your product. This almost screams that you must find a technical co-founder instead of outsourcing.

If it takes you over six months to find a technical co-founder, then there is a problem with either your idea and no one wants to work on it, or there is something you are not doing right, and you must bring in someone with experience putting together a founding team.

10) Don’t Skimp On Hosting

As much as I love to suggest that startup companies save money on just about anything they can, a bad hosting company can be so problematic and damaging to your product that you should go through extra effort to make sure your product is hosted with the best hosting providers.

What you can do to save money is use a cheaper hosting environment for your development server (and staging server if you have one), but make sure your production environment is the best it can be. There are few things more disheartening than finally getting some great PR or a large volume of users just to see that your production server cannot support that volume of visitors you had been dreaming of.

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