If you have any experience as an entrepreneur, then you know the words “startup” and “uncertainty” are pretty much synonyms. If we’re honest, that is probably even an understatement.
There’s plenty of excitement and no doubt tons of opportunity out there for the right startups. If you’re the founder, you’ve seen something in the markets you like, you believe in yourself and your support to get it done, and you’re ready to see what fortunes await you.
The opportunity is there, and that uncertainty gives plenty of room and energy for new ideas, but it can also lead to the complete failure of the startup. The more unknown variables and unplanned systems, the worse a situation the company is going to be in, no matter how good the ideas.
While everyone loves the story of the entrepreneur who creates a startup and that startup becomes Uber or Facebook or some other household name, the truth is that these companies face some really unique challenges and there are far more failures than success stories.
However better project management could help many better manage that risk and prosper. Project management isn’t sexy, but it’s your best friend in the business.
This maps out specific processes that allow a project to start, advance, and finish and keeps everyone on the same page. This can seem restrictive, but that framework is what separates success from failure, in addition to teaching you the tools you need to reach your potential truly.
There are many types of project management out there. Don’t assume it’s too rigid: many styles can be adapted to create one that lets you and your team do their best work.
Startups often make certain project management mistakes.
Here is a list of some of the most common mistakes made by startups and a few ways to avoid such situations.
Startups take a bottom-up approach when it comes to managing projects. They strive to find people who have the necessary skill set for the job but often overlook the importance of project management to make it a success.
A project manager is not there just to coordinate the project plan, but it’s imperative that she is assigned accountability and responsibility to complete the project. A typical startup does not necessarily have a person with experience in different project management methodologies or with PMI certification.
In most cases, startups consist of a small team with flat structure. Often, the managers are colleagues, and formal hierarchy almost does not exist which makes it difficult to say no.
This becomes more difficult in cases where companies encourage open dialogue as it is considered necessary for innovation. In such a consensus-based culture, requests made by a team member is often difficult to turn down for the manager.
However, saying yes to each request may form a dangerous precedent. Saying yes to everything helps in avoiding short-term conflicts but often results in the creation of a dynamic where management has relatively low power as compared to the team.
The real challenge for a project manager is to find a way to not say yes to every request without giving an impression of loss of collaboration or camaraderie to the team.
Maximum transparency explaining the rationale behind decisions is the key to achieve consensus the right way. For instance, there might be a request from the team to add a particular functionality that will help in making the product better, but the manager needs to explain that “speed to market” is the priority right now, and that request can wait.
When employees understand the priorities and have a clear vision of the plans of the company, they are likely to be more flexible. In the case of startups, a command and control structure is less likely to be successful.
For instance, one of the risks a startup faces is the release of a similar solution by a competitor which might have an immense negative effect on the long-term growth of the startup.
After the identification of risks, it is imperative for the organization to come up with a strategy to address this particular risk in case it happens. If there is a new competitor in the market, a market segment must be identified by the company whose needs it can meet profitably.
Thorough understanding of customer segments and focusing on a particular group of customers can help in shielding a company from the competition. Merely hoping that it doesn’t happen is ignorance of real risk which is not only irresponsible but also shortsighted.
There are cases where there is a failure to understand the scope of a project as it is believed that scope is fluid and may change later.
Even if it happens, it is imperative to have a baseline to define the scope of a particular project to have set expectations for the management as well as the project team.
When project management is not taken seriously by startups, change tracking is one of its biggest casualties. If the teams and processes are democratized, the risk of everyone making changes to their particular part of the project regardless of the overall plan becomes a bigger risk.
Regardless of the project planning methodology used for project management, all the changes in a project plan must be approved and tracked properly.
In case someone makes random changes to a part of the plan, it may lead to confusion for other team members who might not be aware of the changes. In case appropriate approval is not obtained for each change, it may lead to changes that are wholly inconsistent with the overall plan and strategy.
There is no denying the fact that startup owners are usually under immense pressure from investors to rush their product to market before they burn through the cash investments and sometimes, it leads to cutting corners.
It may be tempting to release half-baked products to be first to the market, but you should never forget that it can be extremely dangerous. For start-ups, their reputation is extremely important, and if you mess up with your first launch, it’s unlikely that your company will survive.
This doesn’t apply to cases where small beta releases are tested by friends and family who are likely to forgive some bugs. However, things are not going to be as forgiving for startups in a competitive marketplace. Customers expect the same level of quality control by a startup as they expect from a larger organization.
Don’t forget that a bigger company often has a bigger portfolio of products and more customers to fall back on. On the other hand, a startup usually only has one shot to make its name, and it can’t take chances.
Scheduling a project is never easy as not all the variables are known. One has to make a huge number of estimates when a product is being released for the first time. Some of these estimates are likely to fall short whereas others are likely to be accurate.
It is tempting not to create a detailed delivery schedule. Often, it can be justified in a variety of ways such as we will figure this out later or there are too many variables to be figured out now, or it’s a simply meaningless process for a start-up to be bogged down in.
These arguments may seem justified but may have disastrous consequences. On the contrary, the process of making set schedules helps in getting everyone focused on the plan and may also lead to the identification of risks.
A work breakdown structure should be used to completely break down the overall project into the smallest tasks or activities regardless of the methodology used by your team.
If you are like other common startups, you are likely to hire enthusiastic, dynamic and young people who will commit to your vision. In turn, you trust them, and a lot of responsibilities are given as you expect them to deliver by multitasking (which we, as a lean startup, don’t recommend).
These young, enthusiastic people often overcommit but start to burn out without realizing it. Bigger companies have a lot more resources and can afford to spread the burden, but startups do not have this luxury.
Often, it is assumed that giving responsibilities to smart people even though they are not qualified for the same is the way to go. It is assumed that smart people can learn on the job and will be able to do the job, but smart people may also fail if they are not given enough bandwidth and time.
It is the responsibility of the start-up project manager (it doesn’t matter whether this is their official title) to understand the team’s limitations. If people overcommit, it will only lead to burnout and mistakes.
Therefore, the best way to move forward is to be upfront about the lack of resources and change the management. In some cases, it may lead to the addition of more resources to a project and in other cases, it might lead to re-prioritization of the employee’s time.
You will agree that the tendency to over-communicate is a reality in today’s hyper-connected world. Employers of your team may use Google hangout, WhatsApp, Skype or SMS.
It’s true that the employees are available for most of the day, but start-up projects need to keep in mind that proper communication needs rhythm. A scheduled time is necessary for the whole team to review their progress, identify their problem areas and work out solutions collaboratively.
It may be cool to bypass such formal status meetings, but it also increases the risk of macro issues turning into big problems that might affect the whole project. Regular meetings need to be scheduled with a planned schedule of topics – daily standups, weekly, and monthly.
There is a tendency in some startups not to use project management software as they are deemed too complex. It is difficult to understand this attitude of some startups when there is a huge number of online project management software for startups available today.
This tendency to not use or avoid the use of project management software has grown so strong that some vendors providing such software have claimed that their solution is a team collaboration software and is not a project management software.
It’s acceptable if the project team wants to use a physical Kanban Board. However, we recommend a digital Kanban board.
The real important thing is to find a way to clearly outline different roles and responsibilities and clearly map out the project plan. Even an excel spreadsheet is a better solution than completely avoiding the use of any software for project management.
Chaos. No methodology at all. That’s the most common project management methodology for startups. Often the startups think they are going to operate in a place that requires them to be innovative and the first to grab the market.
It is possible for you to be unable to find anyone with formal training, and also have only a few resources available for a formal project management methodology.
The logic behind this method is the fact that most startups will be operating in competitive niches. With that being the case, following the rules and the set process will be difficult to do and at times rules may prevent you from reaching the level of success you want.
However, operating through chaos doesn’t work in the long run. Think about it as a battle, even the grunts in the field will need to have some form of structure and discipline to work under. Even the most powerful armies in the world could be beaten by having a good plan in place.
Often the business people will think about San Tzu’s famous quote “in the midst of chaos, there is also an opportunity.” However, he gives us a more specific roadmap for achieving this victory to follow. The victorious army plans first and then go to war.
Startup owners often fail to define processes, while the likelihood of failure increases. Methods such as “Lean” are specifically designed for startups. Even if the startup doesn’t loudly embrace a methodology, the elements of Agile and Traditional processes can be used by in planning, development, and execution.
Almost any type of discussion that happens about startups and the project management will have an analysis in this form — this is a concept that is fairly new and was started in 2008 by Eric Reis and has a strong fan base.
This principle actually operates under the same principle that was used by Toyota in the 1980s. The method helps to reduce the amount of waste and increases productivity.
This approach to product development has helped a significant number of companies to launch their product faster than ever. You may have heard the term MVP – Minimum Viable Product, which is based on the lean concept.
As many startups don’t have the initial funds needed for building a product, this concept allows any startup to build and ship the product quickly to the market and validate if the solution they offer actually resolves an existing problem.
The lean approach to product development accelerates learning, enables quick feedback loops on the product and allows for the next iteration to occur sooner.
This is a process that is going to focus on the development aspect, but also in getting the applications delivered quickly without looking at the processes that are in place.
These often are used to sprint to the finish line. A great benefit here is the project is flexible enough that it makes it easier for you to allow for input and make adjustments as needed.
This method is one that works great for a startup that does not have a long period of time before they can bring the product to the market. This often helps to work great when not a lot of planning has been in place. You can even adapt this to the changes that happen in the market.
Often the duration of each sprint will take anywhere from two to up to six weeks. The way this project works is it allows for quick adjustments on the go, and that definitely helps out a lot of people in getting out a good product on short notice.
Agile is an iterative and incremental process accelerating the development and delivery of the product with less attention paid to strict methodologies and processes.
The agile method uses achievable goals and objectives. Keeping your startup and product development lean gives you the opportunity to stay flexible and adjust the product/service development based on factors such as market niche and customers.
With Agile you have the flexibility to pivot, change direction depending on new market input. For example, if there is a misalignment of the service or the features your product offers and market/customers need, you can adjust and prioritize the development of the right features which fit the current users’ needs.
When it comes to project management software, there are around 200 free and commercial solutions on the market. This can be overwhelming when you want to choose the right project management software for your startup.
Choosing the right software is important as it needs to be fit for your business. To determine which software you should consider, you may consider using the SMART evaluation framework.
The SMART Framework For Project Management Software
SMART is an acronym for Scalable, Mobile, Adaptable, Remote and Transparent. These are all important features that the project management software needs to have to provide the service that your startup needs.
Startups grow at a rapid pace when compared to other types of businesses. However, many startups choose low-grade software which has been made with small user numbers in mind.
These may seem like the ideal solution because they are generally lightweight, but they carry the risk of your business outgrowing them. This will result in you having to find a new tool after you have become used to your current one.
The solution is to find project management software that can grow with your business. You need to be able to scale your software as your business and team grow.
Your team is probably on the go most of the time and not always at their desk. Software that is mobile enabled ensures that your team gets updates to project plans in real time.
They will also be able to access documents and collaborate with others at any time regardless of where they are.
A mistake that a lot of startups make when looking for software in their early stages is to dismiss the discipline or project management.
The software they generally get is more of a collaboration software than project management software for startups. While this allows you to stay in contact with everyone, it may not be the best option for your business.
The project management software that you get needs to be adaptable to any project management methodology including Kanban, Agile, and Lean. For one stage of your business growth, you could be using Lean, but Kanban might be required for some of your larger and more complicated projects.
If you can access all methodology from one piece of software, you will make your life easier and ensure better results across your organization.
A lot of startups have virtual teams spread across a number of different locations globally. However, if there is some documentation that everyone is working on, it will need to be in a central location.
Remote teams need to be able to collaborate in real time about issues with the project which is why your software needs to allow for this. Some of the specific functionality that you should look for includes brainstorming, crowdsourcing information and getting feedback.
All team members are expected to have a great level of transparency. This is made easier when they can update the status of each task they are working on so that the project manager does not have to chase them up.
Real-time visibility on the status of all tasks is important if you want your projects to go smoothly.
If you are part of a startup, you already know that the old model of managing projects, where the project manager controls the whole project, doesn’t work in a startup environment.
Startups tend to be democratized and decentralized. Project managers usually play less of a role on the day to day work management.The booming industry of project management software available freely these days, play a significant role when it comes to team collaboration and information sharing.
This ensures that the project deadlines are on track. From experience, we would recommend two features a good project management software for startups should offer (could be one of the two below).
The Kanban Board is one of the simplest and elegant ways to visualize the project plan. The Kanban board keeps the team focused on a small number task with the highest priority.
As a task moves from the “To-do” status to “Working on,” “Waiting for Approval” to “Complete,” everyone in the startup can see at any moment the progress and the status of each task.
The truth is that the Gantt chart is one of the best ways to visualize an entire project in one view and keep the team focused on deadline and deliverables.
These days, there is online project management software which includes simplified versions of the Gantt Chart. Also, the digitalization of the Gantt charts allows it to be interactive so that real-time changes could be made directly into the Gantt Chart itself.
We’ve outlined 7 basic mistakes that startups could make when purchasing project management software:
Being in the market for project management software means that your startup has grown enough to require the software for collaboration, budgeting, decision making, etc.
The maturity of your startup is probably the main reason you have decided to make the acquisition.
A thorough needs assessment is important, otherwise, you may end up purchasing software in a rush by following recommendations from the internet. This way you may end up purchasing software that fails to address your needs or pay for functionality that you will never use.
During the startup phase the focus is on the present, three months feels like a year. Purchasing project management software that does not factor in future needs is one of the worst mistakes you can make.
Keep in mind that the software should be able to scale as the needs and growth of the company accelerates. Buy with an eye on the future.
To encourage companies to buy more some software vendors give ambiguous pricing information. The project management software you buy should align with your needs and projected time frame.
You do not need to purchase software with a multi-year agreement if you are only planning to use it for a few months. Be specific, buy only what you need and avoid paying for advanced functionalities like third-party application integration that your startup will not be using.
Nowadays, project management software can be accessed by everyone on a particular team and is no longer meant for the project manager alone. Team members can access this software and use it to update their status and to collaborate with other team members.
As such, it is good to look for a project management software that will suit the needs of your team. You can achieve this by understanding how your team works before looking for this software.
Most of the online project management software out there usually offer a free 30-day trial to allow people to try out their software. It is, therefore, a good idea to try out at least 2 different vendor solutions before buying project management software.
However, don’t make the mistake of focusing too much on the feel and look of a project management software. Instead, make your decision based on how the software works for your needs.
Some of the project management software packages are very powerful and require training or are difficult to use. Do you have the resources or time to train your time? If not, ensure that the software you choose is intuitive to use.
Keep in mind that when it comes to project management software user utilization is very important, and if the software you buy is under-used, you won’t get value for your money.