1. Low capital – would like to save as much as possible and therefore be very careful on spending, not that others wouldn't like to do that. But, Start-ups have to show student behaviour to judiciously utilize the scarce available funds.
2. High Risk – working on new ideas and not sure of execution, chances of success is less than 30%
3. Time is crucial and therefore results are expected quickly. Have to bring solutions to market before competition.
What could be the approach to enhance the chances of success - look for an outsource partner who can align processes and workforce to meet the start up challenges:
1. Provide young , enthusiastic, creative team trained on Agile processes – Scrum meetings, Xplanner, Iterative development methodology, extreme programming
2. Consider alternate commercial models other than pure T&M:
a. Invest part of payment into Start Up equity
b. Link 30% of payment to successful delivery/results
c. BOT model – Transfer of key resources after two years
d. Offer fixed price services like – performance tuning, testing
Provide additional services such as:
· Take on the burden of recruitment and resource management – supply resources at short notice and as well transition out at short notice of 2 to 3 weeks.
· Support in project execution through multiple reviews, identify bottlenecks/solutions to enhance the probability of Start Up success
· Take ownership of the solution, provide value added suggestions to ensure Start Up success
· Track productivity of each resource and ensure that desired value is added to the Start Up by each resource
· Enable the Start Up for success through process maturity – CMM certification, Information security certification
· Show patience in situations of delayed payment – work out innovative ways of receiving value for the work done.
· Deploy resources who have multiple Start Up experience
Effective Outsourced Service Agent can not only reduce the cost by 30% but also enhance the chances of Start-up success many times.
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