Planning your Startup

April 3, 2012

How important is the Programming Language I choose?

I get inquiries about helping out as a Tech Lead, or Part-Time CTO for early stage companies, and a frequent question I keep getting is "Which language/framework should I choose?", and while I love Ruby and Rails, it usually isn't my first answer.

Here's a recent conversation I thought I'd share:

Dear Mr. John McCaffrey,
 Question: If one would want to start building a web based SaaS product (real estate portfolio management tool), that would eventually connect to mobile devices too (for agents), what programming language would be most appropriate with which database backend (SQL vs. noSQL?) to keep data (payments, utilities, invoices, scanned documents?) 

Where would one start? 

Here's where I would start: 

1. Market analysis.
  Are there many apps in this space already? If so, you should use a few, and read through the user forums/complaints to verify that what you want to do would be a valued addition to the space. (I'm often surprised when someone approaches me with a business idea they want to pursue, but they haven't used the products of their competitors exhaustively yet). What is the fastest/best way you can prove your idea has any legs?

2. Programming language
Unless you're already familiar with providing a service to this user base, most of your discovery will be in understanding what customers need, and how your approach is different/better than what's out there, so its important to have a flexible architecture, and be able to find the resources you need to keep moving it forward. Ruby/Rails is great, and you can build apps very quickly with it. There are a lot of great tools/libraries for getting things done quickly, and great options for hosting your app. The main problem with Rails is that the developers are very much in demand, so experienced ones will be expensive, and while a junior dev will cost you less per hour, they might take much longer to do tasks, or build the app in a way that decreases its flexibility. PHP is also great, and much easier to find senior developers at a reasonable rate. As far as Mobile development goes, I usually recommend that people create their website first, enhance it to work well on a mobile device, and then look to building a native mobile app once they have proven there is enough demand.

3. Establish your budget and goals upfront
How do you quantitatively measure success, and how much are you willing to spend to reach each milestone? I've seen too many business owners use up their entire budget on the first release, and not leave enough for enhancements, new features or general maintenance. I've also seen too many projects where the features were not directly tied to a business goal, and new features keep getting thrown in which eat up the budget without increasing revenue or improving the app. List out the features that you think are critical for the application to have, and how much they are worth to you.

4. Plan your feature releases. 
As a guideline, I like to organize the development plan into a rough schedule of 2 weeks of development followed by 1 week of testing/fixing/deploying and planning/designing for the next release. Once you list out your features and plan in 2wk blocks, it makes it much easier to track your overall timeline and make sure that the budget is reasonable. It can also help highlight dependencies between features, and features that need to be scaled back.

Assuming 2 developers at $50hr each working roughly 30hrs a week = $50 x 30hr x 4wks x 2(devs) = $12,000 for every 4 weeks of work, and you'd most likely have 2-3 months of work, so a rough budget of $36,000 would cover the first 2-3 months of building the app followed by some smaller amount to host and maintain it. ($50hr is actually on the low end, so adjust for rate and hrs/wk as needed)

Given a common IT ROI timeline of 3 years, and these sample numbers, you might want to target building an app that can generate $12k of revenue per year, or $1k per month. If you charge a monthly fee of $5, you'd need 200 users to hit $1k in gross revenue, and after 3+ years, you'd have your investment back, and could be very close to profitability!

This is just a rough guideline to give you a starting point for your planning. You could take different approaches to get to market faster, charge less but target a bigger market, or focus on a smaller but higher end market.

A few questions to ponder:
1. How do I verify that there is enough of a market here?
2. How could I build this app for less?
3. How could I get more than 200 users at $5?
4. What features would get them to pay more than $5?
5. How can I get additional funding to accelerate the timeline?
6. What can I do to stay ahead of the competition?

So while your technology choices are an important factor in all of this, they are clearly not the most important factor. They will have an impact on your initial development timeline, your hosting costs, how easy it will be to modify and add new features, and to manage your staffing needs.

I hope this gives you a good sense of how you might go about planning for you application. Feel free to reach out to me if you have more questions.

-John McCaffrey

** The $50hr dev rate, and ROI calculations are provided as simple numbers and baseline for discussion/comparison. Feel free to plug in your own numbers, or give feedback for what ROI schedule you use in your IT projects.

I've had this conversation with a few people now, and wanted to share my thoughts and get feedback from others.  I would welcome any additional feedback as to what advice you have for navigating the early stages of building a Web application/startup, with regards to making your technical decisions, building your tech team, and managing your budget.

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Image courtesy of Dave Dugdale at LearningDslrVideo from his flickr photostream