Why Is Agile So Important For Startups?

June 23, 2022  |  Mark Hillary
What are the main reasons that startup businesses fail? It’s fatal for a startup to run out of cash or to launch a product that nobody is interested in, but what about the more practical reasons? Let’s assume you are launching a startup business. You have financial backers and you know that there is a market out there for your products. What could still cause it to fail?

According to CB Insights, the next most common reason for failure is being outcompeted – someone else is either doing something similar or another business copies what you are doing, but launches it to market faster than you can achieve. They can build the same service faster than you.

The Harvard Business Review recently published a list of avoidable reasons why startups fail. This is an interesting list because it ignores scenarios like a financial backer pulling out and focuses only on what the management can control.

One of the first reasons listed was choice of a strategic partner. Think about that. You have a great idea, financial backing, a great team, but then one of your strategic partners lets you down to the extent that the entire business fails.

Getting a startup off the ground is never easy. The US Bureau of Labor Statistics has published data showing that only 80% of startups can survive for more than a year. So a fifth of all startups are dead within months.

Advice from Investopedia on the main startup problems to avoid includes a verification of the HBR research – bad partnerships can drag down a startup. Investopedia says that this is often because individual leaders or partner companies with different expertise can find it hard to set joint goals. You work hard only to find your partner disagrees with the approach and you find that eventually you are not going in the same direction.

So once again, let’s assume that you have secure funding and a good idea. What do you need next?

Almost certainly you now need technology expertise. Many new services are launched online or as apps. You need a partner that can turn your ideas and vision into a working product. But it has to be a partner that finds it easy to move in the same direction.

This is why the Agile methodology is so important for startups. You can read about Agile in more detail here, but to summarize, it allows you to specify your ideas to the software development team and create a series of regular delivery points – maybe one week, maybe two weeks. They need to be short sprints of effort that allow regular checkpoints and deliveries of new software.

Each time the proposed system will get a little better, with new features and fixes. At each stage you have the choice to adopt the new system or to back out and remain with the existing version. This is why frequent updates are so important. Even if the software team goes off on a tangent and completely misunderstands a request, you have only lost out on one sprint… the focus of the next sprint can be to correct the system.

This is exactly the approach that startups need. Rapid development. Testing quickly and delivering upgraded code with the ability to back out if problems occur. It allows the startup to move fast and test new ideas. It also ensures that the software partner is 100% synchronized with the needs of the startup.

There are many other ways that your startup can fail, but it shouldn’t be because your software development partner doesn’t understand what you need. Think Agile and develop a regular pattern of sprints that allow you to keep updating your service with a very low risk of software errors.

If you are running a startup and you need to scale up your systems rapidly, then consider the use of Agile. Read how Agile teams offer a rapid approach to software for startups.

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