Why software product startups fail and what to do about it. Evolution of software product development in startup companies

Many software product companies fail to achieve a worthwhile return on the investments of their financiers, founders and employees. Failures of execution in sales, marketing and delivery are commonly recognized, but failures in product development are less obvious. This paper explores the critical product development issues that can lead to company failure. A model for the evolution of product development from startup to maturity is provided, consisting of three phases: startup; stabilization; and growth. Symptoms that can appear in each phase are discussed and the underlying issues analyzed. This enables stakeholders to benchmark their own product companies and avoid product-related company failure. The paper will be of interest to investors funding startup product companies, executives leading them and product development managers.