Although software startups are seen as engines of rapid growth and sources of disruptive innovation, these entities are known to have a high failure rate. In addition to this, owing to the rapidly evolving technology sector and the ever-changing needs of the modern business and consumer markets, it might be worth reviewing the development methodologies presently in use for relevance. Considering newer technological constructs such as cloud computing and corresponding impact that could have on the development process such as the ability to quickly scale will need to be studied as part of such a review. This research works reviews current literature for product, business model, and integrated frameworks involving the two spaces to present the various aspects covered as part of the different paradigms of startup development within the software space. The resultant review presents the areas covered by the different paradigms and presents a view of the various areas from the viewpoint of software startup success factors.
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Software startups have been acknowledged for their potential for disruptive innovation, rapid growth and massive revenue generation. Indeed, Software products dominate work and personal spaces for most peoples. It must be noted that most early stage startups fail in less than two years on their inception (Tripathi et al., 2019). One of the reasons for this include not taking into account the problem solution fit of the product (Paternoster et al., 2014).
Software startups are startup entities for whom the development of software forms a core portion of their product or service offering (Gutbrod et al., 2017; Melegati et al., 2019). As pointed out by Paternoster et al. (2014) and later by Tripati et al. (2019), the term software startup surfaced in early literature in a research article by Carmel (1994). Paternoster et al. (2014) define software startups as “newly created companies with no operating history and fast in producing cutting-edge technologies”. Another commonly accepted meaning of the term software startups is startup entities which conceive and produce software intensive products (Tripathi et al., 2019). In this work, the scope is limited to software products and not software services. It must be noted that software offered as a service (SaaS) are included in the scope of software products. Xu and Brinkkemper (2005) define a software product as “… a packaged configuration of software components or a software-based service, with auxiliary materials, which is released for and traded in a specific market”.
As stated by Sutton (2000) and later pointed out by Paternoster et al. (2014), some key challenges faced by software startups include
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Resource constraints – software startups have limited resources in terms of time, finance and human capital, their primary focus is on getting the products in the hands of consumers, promotion of the product and developing strategic alliances.
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Turbulent and ever-changing market conditions – with disruptive technologies and adoption of globalization, the constantly changing market needs and software startups need to ensure their products keep up with these changes.
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Continually evolving technologies – software startups need to work with evolving and disruptive technologies.
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A wide and diverse range of influences – Software startups are influenced by wide ranging, interconnected sets of factors including customers, industry partners, investors, the competitive forces, the industry, and the overall market.
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Little to no accumulated experience – Since software startups have little to no operating history, they do not have an established development process or other management processes for their organization.
In the initial stages of most startups, the focus is on product development, as without a product offering there is not much else to create a business around (Trimi & Berbegal-Mirabent, 2012), and this holds true in the area of software. Software products are typically defined as standardized systems which are produced for mass market consumption aimed at either consumer or enterprise user bases (Aramand, 2008). Software startups however find it difficult to adopt development process for software products owing to various factors and influences. These varied range of factors and influences can make every development context different and unique in its own regard.