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Which way to go for Development of an MVP application?

We are an early stage startup with a limited budget . We are trying to figure out the best way to go in regards to Development based on the below options with the thought in mind that we will be seeking outside investments in our first Angel round in the coming months.

Option 1: Hire on a seasoned Product Manager that has an overseas team with extensive experience in the space, but would only be able to build out a simplified MVP with only stock designs. Bonus/Concern - Getting a limited product to market fast even though it's not perfect in any way.

Option 2: Hire and manage our own unproven Development Team overseas that can build the full functionality of our planned MVP with custom designs. Bonus/Concern - Getting a full designed product to market fast, but unknown quality of code and headache of managing our own Development Team overseas.

Option 3: Hire on a well known and connected Development Firm that we could grow with overtime, but would only be able to build out a very solid wire frame with custom designs through co-collaboration of our planned MVP that once completed we would be able to show to investors what we are planning on building with their investments. Bonus/Concern - Have a seasoned well known Development team we can grow with overtime and truly become partners with. In addition they will be able to introduce us to a crop of Angel investors and Accelerators within our area of focus.

16 Replies

John Anderson
1
0
John Anderson Entrepreneur
Senior Mobile Developer at Propelics
It's always tough ramping up a new development team. Unless you've actually worked with them in the past, I would consider any team "unproven" and assume they must prove their credibility.

The next question is how to vet an unproven development team. First thing is make it clear they don't have a contract for the whole app along with a bag of money to build it. Break up the project into distinct modules that you can track and pay for over time, as they prove themselves. Make it clear that you are only going to commit to paying for the first module and if that goes well, they can bid on the coming modules.

If a team knows they have solid skills and can deliver in this model, they shouldn't have a problem with it. If you have a team that is just trying to rip you off, they will push back on this and that should be a red flag. Also having someone able to do a code review is good to let you know if their code is bad, or if it's conforming to best practices to some degree. An app can work and be a nightmare to maintain, but that's not great for maintainability.

You are in control of the timelines and it is their responsiblity to prove themselves by meeting that timeline. If they see a problem with deadlines, or issues arise it is of course a conversation that can be had. If they try to push the timeline out too far for a given module, break that module into 2 or more modules with an acceptable timeline.

Then you're only on the hook to pay for a single module at a time. This should be an amount that you're willing to lose if things go south. I know that sounds bad, especially to investors, but it's really the only way to mitigate the risks of dealing with a company that you don't know personally.

Hope this helps.






ajay rajani
1
1
ajay rajani Advisor
Entrepreneur & investor. Aspiring merchant of progress.
Hey Eric, good question!

I actually started a brand new kind of accelerator, called Nextt, to address this exact issue - getting from idea to MVP.

Put simply, we help people test big ideas before they leave their job or ask investors for money.

My partner and I have been early investors/executives atAccel-backed Grovo, Sacca-backed Inventure and Sequoia-backed Everwise. We have a good idea of what we're doing. And we're supported by 50+ designers, engineers, data scientists & more from companies likeSnapchat, FourSquare & VICE.

We've already helped a number of projects go from idea to high-quality MVP. It takes us just six weeks to do so & the only cash cost is a $100 application fee. We take small equity stake if/when your project evolves into a company, and we love what we do.

Learn more about it atnex.ttand see highlight reels from our pilot cohort of projectshere.

Look forward to hearing from you & seeing your application come thru :)

- Ajay

Gian Tapinassi
5
0
Gian Tapinassi Entrepreneur
Project Validation
....what about testing the value proposition before investing money in any mvp's development?
Sorry but I have a quite different idea of what an mvp is. I believe that anything you could do that is letting you learn something more about what you wish to build it is enormously more important than building "something" that is just the follow up of an idea and it can be done with very few resources.
Specially if you are looking for investors - something I would suggest to be very careful about - have data is the most important thing and it can be better done with tests/experiments than hiring anybody.

Steve Owens
0
0
Steve Owens Entrepreneur • Advisor
Finish Line - A Better Way for Small Companies to Develop Products
Very important decision.

My first reaction is that you have not provided enough information for anyone to make an informed decision. Each situation is different and there are very few "always true" answers.

Do you have a board of advisory? This would be a great question for them. If you do not have one, I would work on getting one.

Generally speaking, bad idea to hire anyone full time until after funding - "A" round, not seed. Just too much upfront cost, intellectual capital bias and distraction.

My second reaction is that I am sure there are other choices. For example, there are PDCs that specialize in helping pre-funded startups like yours. There are part time CTOs. Maybe development is not even needed at this point. Etc, etc.

Bottom line, find the smartest guys you can, get them all the information you can give them, then put them in a room and get them to collaborate on the answer. Notice, collaborate is not the same as each person just giving his/her opinion.
Damien Filiatrault
0
0
Damien Filiatrault Entrepreneur
Software Architect and Strategy Consultant
Erik, without knowing the scope of your project or your budget, it is difficult to help you come to a decision. Still, I get the feeling that option 3 is not giving you a good value if you will only get design completed for the same amount of money that would get you the entire product to market with option 2. However, there are many poor developers out there who will quote you a low price, but you risk ending up with low quality software that you may need to throw away. Having a CTO or technical adviser that you trust is crucial at this point. If you have someone with technical management experience, they can help you evaluate your options and make the right decision. Option 2 of managing your own team can work if you have someone with the right technical skill set leading the project, but can go of the rails without the right tools and practices in place to manage the development process. So, with the limited information provided, I would lean toward option 1.

I run a company called Scalable Path that may fall in the sweet spot of what you are looking for. We have experienced, US-based, project leaders and a large pool of vetted offshore talent (many of whom we have worked with on previous projects). We may be able to get you more done within your budget without taking on the risks of unproven teams. Here's a page on our site that explains how we work:


Whatever path you decide to take, I wish you good luck!

-Damien
Eyal Shimoni Assa
0
0
Director of Product Management and Sales
The way I like to handle such decisions is always starting with the end point, what do I want to have at the end of the process, and than start rolling back and confront my expected constraints - budget, knowledge, resources, time, etc.
To fully answer your question one needs to have some better understanding of your product and your constraints, but as the MVP basically stands for, and knowing who your target market is (at your case, investors probably, not the real target market of the product) than I suggest starting by defining what is the minimal viable product - the core essence of your idea, and than thinking what can be the fastest and chipest way to get there. Please bare in mind that the chances your product will change dramaticaly after that stage are very high, so every plan for what comes after might not be relevant anymore...
Good luck!
Donald Cramer
0
0
Donald Cramer Entrepreneur
CEO - Founder at Rocket36
Erik:
Great way to size up your options. I have seen startups try all three to varying degrees of success. The more successful projects had some technical capability within the startup. This has included someone with solid technical/architectural skills that will write code and/or a product manager. If you can afford both in terms of equity and pay, then get both. From there, you can look to hire out a competent development team (in many cases off shore) to help execute building the MVP.

This combo helps in several ways-
1- you have technical people close to the business with a stake in building an effective MVP. They will understand how it is built and can speak to the quality of the MVP.

2- Investors want to know who the tech people are. Beyond the MVP, the investors feel the tech team can have equal importance in the value of the company. If all of the product is outsourced, you lose that.

3- Show the investor how you were able to leverage savings with offshore development while keeping the technical knowledge in house. You can then show how the savings went into proving the success of the MVP through adoption rates, engagement etc. Plus you will then know better on what you did right and what you did not. I see many companies lose sight on this. They think about the MVP without thinking about how it gets into the hands of the customer.

Hope this helps. Our firm does quite a bit of product/technical consulting. Feel free to send a msg if you have any additional questions or wish to discuss in greater detail.

Regards,
Don
Venkat Rangamani
0
0
Venkat Rangamani Entrepreneur
Creative software technologist looking for the next leadership opportunity in a game changing company
Here is a new option that has worked for me - hire a designer from 99designs, hire a few engineers from upwork and have someone on a technical advisory role oversee the effort. You can be the product manager. I got an app built this way on the cheap - 5 screen app for $5k. Test in on the market - gather enough data to make an investment case. Raise money. Hire new developers in house. Phase out contracted development slowly or better still keep the good ones working remotely or entice them with an offer to move to your location.
Israel Roth
2
0
Israel Roth Entrepreneur • Advisor
Co-Founder & CTO at Labgoo
I will start by saying that I make a living in the past few years in developing MVPs and products for start ups, but before selling you development services, I want to challenge you withe those questions:

Can you do it with focus groups (or interviewing people in the target audience / domain) using just a presentation or mock up you build yourself?

Can you do it with a simple landing page and a $500 facebook ads campaign?

Can you create a video simulating the product instead of building it?

Its not always a benefit to have a working product when you go to raise money, since if it is good enough, many investors will tell you they will wait to see traction before they invest. If it does not look good enough they may reject you on that.
Try to proof to yourself (and your future investors) that you have a good product serving a large market, solving some real problem.

Once you raise money and need a great product built, talk to me...

D.J. Todd
0
0
D.J. Todd Entrepreneur
Owner and Co-Founder at Puptimize
Hi Erik,

I am a data point of one, but in my experience Option 3 does not work. Investors in our region value traction above all else. Despite having an experienced team, a deep database of market research/concept validation, and a polished pitch deck, angels felt we were "too early". If I had a time machine, I would go back and invest those funds in a simple, live MVP. We are now exploring ways to build that simple MVP by hiring a full-service agency that manages international talent, or by bringing on a technical co-founder.
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