Project Management in Start-ups

Project management in start-ups

An early-stage start-up company is all about project management. Think about it as a project to develop a new product or service. A start-up company has limited resources to create a product or service that fits the market gap. Often founders are the only source of productivity in a start-up, so their time is precious. Good project management skills are crucial to efficiently allocate resources and productivity during the stages of idea validation, and development & improvement of the Minimal Viable Product (MVP). 

An overview of a start-up company

People often refer start-up companies as “market disruptors”, as start-ups usually have a much bigger vision compared to local businesses. They aim to create significant impact at an industrial level and compete in a large scale of market (source).

From the generation of an idea until its maturation, a start-up company would go through 5 phases (source).

Phase 1: problem-solution fit	All start-ups begin when the founders identify a “pain point” of a certain group of customers, then they find an innovative and efficient solution to the problems.
Phase 2: building MVP	An MVP is built based on the solution. Start-ups use MVP to study target customer behaviours and to prove there is a demand. The risk has been controlled at its minimum as the cost of building an MVP is low.
Phase 3: product-market fit	If a product fit into its market, there would be enough customers to buy, use and talk to others about this product. The number of the customers should be large enough to provide a sustainable growth and profitability to the start-up.
Phase 4: scale	At this stage a start-up has proven its business model. The core members of the team are confirmed and committed. And it is the time to raise the major fund!
Phase 5: maturity	Growth decelerates but maybe the time to start expanding to other markets.

Project, project management and the skills required for project managers

A project is defined as a temporary endeavour with a unique goal, a fixed budget and time frame. It is distinct from a day-to-day operation which involves performing repetitive tasks that provide similar results every time. The five stages within a product management lifecycle are (source):

Stage 1: Initiating	Define the project and its scope, identify relevant stakeholders and resources needed
Stage 2: Planning	Breakdown work into work packages to help tracking work and estimating the cost and duration of the project, build a project schedule, develop a project budget then get approval from the client
Stage 3: Executing	Bring all the resources onboard, brief them the rules about how to run the project, then officially start the project
Stage 4: Monitoring and controlling	Check if the project goes according to plan, if not, put it back on track again
Stage 5: Closing	Get client to accept that the project is completed, document project performance and lessons learned then close the contract

 

Managing a project requires application of knowledge, skills, tools, and techniques to meet project requirements. A project manager needs to have specific technical skills (e.g., planning the project, creating schedules, interpreting Gantt charts etc.), business expertise (e.g., understand how a project fit into the overall business), problem solving skills especially when things don’t go as planned, interpersonal and leadership skills to ensure all members are working as a team, motivate them to perform better and hold them accountable.

What project management methodology should a start-up company adopt?

The traditional waterfall methodology is not suitable for a start-up company. Table below illustrates some differences in project management between corporates and star-ups (source 4):

	Corporate	Start-up
Resources	Abundant	Limited
Product-market fit	Established	Unknown or under discovery
Planning and implementation	Thorough planning beforehand and try to stick to the plan during implementation	Learn as you go and adjust the plan according to customer responses or feedbacks
Attitude towards failure	Less tolerance but lower chance in failing due to established product- market fit	Encourage to make fast and cheap mistakes as a cost of the learning process
Efficiency	Low	High

 

Compared to a corporate setting, a start-up has limited resources and often still yet to discover the product-market fit. One of the mindsets for start-ups is to fail quickly (but in a cheaper way), as mistakes are inevitable during the discovery pathway of target customer behaviours and market demand.

As we’ve heard a lot about lean, agile, Kanban and scrum as project management methodologies, the first two are the bigger concepts and Kanban and scrum are more like the practices and tools to assist implementation of lean and agile principles during project management (source).

Lean was originated from manufacturing industry (from JIT production model) which aims to minimise waste, reduce cost, improve quality, and increase efficiency. Agile was originated from software development, in which the work of product development is breakdown into many iterations/sprints. The key aspects include early collaboration with customers while building the products, value to be delivered continuously at the end of each iteration, adjust future work according to the lesson learned from previous iterations, etc. Even though the two principles are originated from different industries, they do share some common grounds. For example, both lean and agile go against the perfect upfront planning as well as value customer feedbacks and continuous improvement of product. However, they did it in different approaches. Whilst lean addresses the “need” (use customer demand to “pull” work output to minimise wastage, cost and improve quality), agile encourage customers to collaborate at early-stage of product development. (source) 

In summary, the selection of a project management methodology should be based on, whether it provides the best fit to the start-up’s underlying business. Start-ups can also form their unique methodology by blending or tailoring lean and agile according to their needs. One example would be the popular “lean start-up concept” invented by Steve Blank and Eric Ries. The concept combined both the principles of lean and agile, which allows a start-up to learn and grow quickly at minimum risk (source).