How to Invest in Development

Posted November 8, 2014 by Dan Moore in Startups, Development

Is your development team an expense? Thinking about hiring developers or building an application? You've probably already considered how much money you're willing to spend. You may have even looked at a few companies and gotten proposals to fit your budget. But where did your budget come from? Was it money on hand, how much of a loan you could get, or something else?

I've often been approached by companies that have a set budget and don't want to exceed that dollar amount. Unfortunately, while this appears to mitigate risk by locking in the scope before the project starts, it's directly creating risk by miss-aligning the solution from the investment.

When considering a project, I first take a step back and look at the core issues and goals behind the development. From there, I'm able to propose a lean approach to solving this problem at 3 different budget levels. I look at the target budget and determine: what do I feel I can do with 100% of the funds. Then I look at 2.6x the funds, what does the ideal solution look like at this level. Then, finally, I look at the far goal of 500% and let my imagination run wild.

While I never start on 5x the budget, I design the project in an iterative fashion that enables the eventual goals of a larger budget. Using this model, I'm able to successfully drive immediate value with prioritization on features at the static budget level and then expand outwards through combined success.

Throughout this process, it's important for your development team to view your budget as an investment and not an expense. Does it really make financial sense to add this feature now? Will this feature provide a positive return? Anchor each development step against the returns. Does your development team factor your returns into their decisions?

Here at vaporware, we build returns through custom web-based applications. We never want to be an expense to our clients, so we'll turn down jobs that we cannot provide a positive return on. If you want to read more about our company and what we do, visit our website. You can also sign up for our office hours to learn how to steer your development back on track.


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