Software start up: agile managers needed

Writing business cases and business case training are what I do.

But most of this year, I have been working with a software start up in the the non-profit sector. We are creating software to measure, track, and evaluate financial, social and environmental impacts -- the triple bottom line. In effect, it is a business case with a (very) complicated benefits line.

The current approaches and tools for defining, measuring, and reporting social and environmental impact are inadequate.  Three quarters of foundations believe they have effective strategies to deliver results. Yet only 26% report having performance indicators or other tools to assess a foundation’s strategies, according to the Center for Effective Philanthropy. This means that approximately $55 billion is granted by U.S. foundations each year with little or no systematic tracking or reporting of impact results.The for-profit equivalent would be not accounting for revenue properly.

It's fascinating work. And several techniques, especially, logic models would help the for-profit sector increase its rigor around explaining the cause-and-effect between an IT investment and its projected benefits.

Having worked on start ups in the mid-1990s and early-2000s, here's how software start ups have changed in 2010 (at least, for me).

  1. Software-as-a-service (SaaS) is the only sensible model to work with. Getting away from integrating multiple systems and services-intensive implementations is beautiful. You can just concentrate on the product.
  2. No big bangs or big bucks. Build the product incrementally and gradually. Develop one small product, then, another. No big releases. And clients will pay you only when they see value.
  3. Fund with customers. Funding yourself from customer revenues proves your business model and minimizes investor interference. See the founder of RightNow Technologies, Greg Gianforte's book on Bootstrapping Your Business.
  4. Selling simply. For your base version, sell it off your web site. For more complicated or bigger customers, the founders have to sell directly.
  5. Need agile managers. The agile process of start small, build, and iterate applies to management as much as developers. Keep strategizing, visioning, and planning to an absolute minimum. Assume management is overhead until proven otherwise. See Richard Koch's (The 80/20 Principle Man) book, Managing Without Management.
  6. Keep outside investors to a minimum. You don't need a raft full of small business, marketing, and SEO consultants counselling you as you head over the waterfall. Outside advisors distort the customer conversation and suck up your time educating them on the "space." Getting the work done is the challenge, not talking (or, worse, brainstorming about it).
  7. Find a clear difference. Marketing remains a haven for the mushy-minded and wooly-worded, so, ensure you work out and communicate your own difference. Think of the simply clarity of 37 Signals, Mint.com, and Nolo.
  8. Work efficiently. Working in 2010 has changed life (for the better), so, don't repeat yourself, productize every service possible, only hire in extreme pain, and encourage remote working.

Back to business cases.

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