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Funding + Contractors = Unrealistic Expectations = Cutting Corners?

Working with several startups over the last couple years, I’ve noticed a recurring theme with well-funded companies using third-party contractors – that is, many sacrifice quality in favor of urgency to deliver a more feature-rich product oftentimes by cutting corners.

That is, startups aim for seemingly arbitrary dates to deliver a product, forgoing things like customer discovery or shifting responsibilities to contractors. In some cases, contractors have not worked in the startup environment or are bought into the business to make the best decisions.
  • I believe the “business” should define what the user flow (experience) should look like with input by a UI/ UX designer. Except in one project, the business shifted user flows to the UI/ UX designer. Being an outside resource without the experience of the business, the designer was left to insert his own vision. So when designs were up for approval, the business owners threw up all over them. Why? Because the designs didn’t match their vision.
  • An early-stage entrepreneur launched a new travel platform without testing the product with customers and gathering feedback for customer acquisition. His previous life in investment banking funded his startup’s six-figure development costs. However, when he launched, he had no answers to how to acquire customers in a highly competitive market. He ended up shutting down almost immediately.
Funding/ money is a funny thing – you want it, but without control, can set unrealistic expectations and take the scrappiness out of startups. You may expect quality to go up, but instead, efforts to ameliorate investors by hitting deadlines motivate the startup to cut corners and sacrifice quality; whereas in bootstrapped, lean startups, quality is tuned to critical elements, and growth occurs more organically.

These aren’t rules… but rather anecdotes of what I’ve seen.

What are your thoughts on how funding has affected startups and expectations? How would you implement some of the lean startup and scrappy methods in a well-funded startup? How else could startups use contractors more effectively?

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