Fixed Cost Software Project Management for Startups

In my last post, I suggested that startups plan their alpha release as a fixed cost software project. The budget is somewhat easy to work out off the business plan. You basically need to answer to fundamental questions: When does the product need to launch and how much can you afford to spend on your initial product?

With those two variables as fixed, you now have to consider several scenarios to back out some fixed costs in your development cycle. Some specifics:

1. How much time do you need to build up your development team? If you're building an internal team, you'll need to consider the time to identify and hire resources and build out the development environment. If you're looking to outsource, then you'll need a block of time to find teams, review proposals and ultimately sign contracts.
2. What is the state of your product requirements? How much time can you dedicate to completing them? How much time do you want to dedicate to prototyping?
   
3. What are the up front technology costs? Development hardware, software development tools, third party libraries, third party databases, etc.
   
4. Make a simple estimation on how much time you want to dedicate to testing the application and making revisions.
   
5. How much time do you need for deployment? For a web application, you'll need to identify a ISP, set up a production environment and conduct some tests.

This is a complete simplification, but hopefully you can see that this exercise is aimed at estimated some of the fixed upfront and closing costs to the alpha development cycle. Also, instead of trying to estimate how much time or money a task requires, answer the question of how much you want or can afford to invest in the task.

Subtract these out (as well as many others) from your allocated time and budget for your alpha product and your essentially left with how much time and cost you can allocate to software development.

Next up: Projecting what features make it into the alpha release.