In my last entry, I discussed the basics of software project estimation and some simplifications that may exist in a startup. But the underlying point of the entry was to illustrate why estimating the development time on a startup’s alpha product release can be flawed. The bottom line is, estimates require detailed requirements, managed scope changes, and accurate effort estimations – things that are difficult to achieve in a startup. There are exceptions.Caveats and exceptions aside, I propose that a startup needs to consider its alpha release as a fixed cost development exercise. There are a few practical reasons for this

• From a simple cost perspective, a startup has limited finances to go to market. If the alpha release has delays then it postpones testing and marketing the product and can also bankrupt the startup.

• Typically, startups are working with incomplete or under-funded product research. Picking the feature set and deciding what functional points are most important is part science, part art, and part luck. As I told my partner when we started TripConnect, many of the requirements that we prioritize for our alpha version will be wrong. Some will be under-engineered, but others just won’t be important. So for that reason alone, it’s often better to go to market with an absolutely minimal feature set.

• In some cases, the development team may come with experience in the applicable technologies and experience working together. In those cases the overall technology/and project risks may be small, but not zero. Even in these cases, the developers may choose to work with newer versions of dependant systems that will introduce some risk. Or maybe the team has worked together, but in circumstances where there was less pressure, better development tools, or additional resources. In other cases, new teams and technologies bring on risks that are not well estimated in a startup.

Apply the K.I.S.S. principal. In my next post, I’ll provide a simple approach to fixed cost software project management optimized for startups.