Funding Risk
Part Of
Reduced By Practices
- Contracts: Outlines cost structures and helps manage budget expectations.
- Estimating: Accurate estimation helps in securing and managing funding.
- Fundraising: Provides necessary financial resources to support the startup’s operations and growth.
- Outsourcing: Can be cost-effective by leveraging economies of scale.
- Prioritising: Allocates resources efficiently to high-impact areas.
- Release: Delivering features might mean you get paid for the software you write.
- Sales: Generates revenue by converting potential leads into customers.
Attendant To Practices
- Demand Management: Inaccurate demand forecasts can lead to resource misallocation.
- Fundraising: Creates a dependency on investors and their continued support and introduces pressure to meet investor expectations and deliver returns.
- Marketing: Marketing campaigns can be expensive.
- Measurement: Implementing measurement systems can be expensive.
- Monitoring: High-quality monitoring tools and systems can be costly.
- Performance Testing: Performance testing tools and environments can be expensive.
- Prototyping: Creating prototypes can incur additional costs.
- Runtime Adoption: Can incur costs associated with adopting standards or libraries.
- Sales: Sales activities can incur significant costs.
- Tool Adoption: Can incur costs associated with acquiring and maintaining tools.
On a lot of software projects you are "handed down" deadlines from above and told to deliver by a certain date or face the consequences. But sometimes you're given a budget instead, which really just adds another layer of abstraction to the Schedule Risk. That is, do I have enough funds to cover the team for as long as I need them?
This grants you some leeway as now you have two variables to play with: the size of the team, and how long you can run it for. The larger the team, the shorter the time you can afford to pay for it.
In startup circles, this "amount of time you can afford it" is called the "Runway": you have to get the product to "take-off" (become profitable) before the runway ends.
Startups often spend a lot of time courting investors in order to get funding and mitigate this type of Schedule Risk. But, as shown in the diagram above, this activity usually comes at the expense of Feature Risk, as usually the same people are diverted into raise funds instead of building the project itself.