Tech Startups and Agile – A Perfect Fit
by Jim Stewart, PMP
To begin, let’s differentiate large traditional organizations from tech startups by identifying some of their typical attributes.
Large established organizations tend to be more risk-averse and have detailed processes in place. Usually, they apply the classic “waterfall” methodology to manage projects. While this method is well-understood, it involves very specific steps, long timelines, and lots of paperwork.
Conversely, tech startups tend to be risk takers -they have to be- They’re usually creating a “disruptive”product or service in a highly competitive market—something innovative that’s never been produced before.
How startups emerge
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According to a US Chamber of Commerce study1, in 2011, millennials launched almost 160,000 startups per month. Twenty-nine percent of all entrepreneurs were 20 to 34 years old.
The US Chamber of Commerce defines millennials as those born between 1980 and 1999, which means they are currently between the ages of 18 and 27. At more than 80M people, millennials have overtaken the baby boomer generation, which was previously the largest generation.
All of this entrepreneurialism helps to drive the economy. According to statistics from the Small Business Administration:2
- Between 1993 and 2011, small firms accounted for 64% of the net new jobs created (or 11.8 million of the 18.5 million net new jobs).
- Since the last recession (mid-2009 to 2011), small firms, led by the larger ones in the category (20-499 employees), accounted for 67% of the net new jobs.
Millennials have already started to impact society and will continue to for many years. As a group, they are more diverse and more socially conscious than their predecessors. As the first generation to grow up with home computers literally at their fingertips, they are both familiar with and comfortable using all types of technology. They are truly “wired.”
The generation Y, how they are also called, believe email and voicemail are for older generations. I’ve frequently seen my millennial kids carry on entire text conversations without ever calling the people they’re “talking” to. They often text and expect a quick response. Unlike their predecessor, Gen Y, prefer quick communication and are intolerant of bureaucracy.
Clearly, not all millennials work for startups or have the desire to found or fund one. However, even those who work in large traditional organizations exhibit much more of an entrepreneurial spirit than previous generations. This entrepreneurial – not to mention independent – spirit is seen not only in their desire to create startups, but is evident in the evolution and expansion of what has become called the “gig economy.”
How is Agile Different than Traditional Project Management?
Briefly, Agile—or the Scrum variant—uses time-boxes (sprints), which are typically two-to-four weeks in duration. At the end of the sprint, the self-governing project team has what is considered a potentially shippable product. This is the terminology used but typically the team runs as many scrum sessions are as necessary to complete the entire product.
This contrasts with the timeline and results of a traditional project plan. After three months of work on a traditional project, you may still be gathering the requirements for a product. After three months of work on an Agile project, you may have run as many as six sprints, iteratively creating a product, refining it, and making changes along the way.
Why is Agile the Best Fit for Tech Startups?
As mentioned, tech startups are often run by and/or staffed with millennials. (Employees in startups tend to work round-the-clock hours.) Agile’s quick return on business value appeals to millennials. They not only want to be able to “turn on a dime,” they want to see the results of their work as quickly as possible with as little overhead as possible. Additionally, since Agile cultivates a much stronger team environment, it’s clear why this group-oriented generation would take to it so readily.
However, this doesn’t mean that Agile appeals exclusively to millennials—it was started by baby boomers—or that it must be applied in a tech startup environment. Nor is traditional waterfall project management going away. Both are valuable methodologies, and both will continue to be used in organizations for the foreseeable future.
But, for tech startups in a millennial age, the smart money is on an increased adoption of Agile as the preferred methodology.
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About the Author
Jim Stewart has over twenty years’ experience in managing projects in IT, financial services and pharmaceutical. A PMP since 2001 and Certified Scrum Master since 2013, he frequently helps organizations increase their project maturity by incorporating best practices.
- The Millennial Generation Research Review, U.S Chamber of Commerce Foundation. https://www.uschamberfoundation.org/reports/millennial-generation-research-review
- Frequently Asked Questions, Small Business Administration. https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf
- Gig Economy, WhatIs.com. http://whatis.techtarget.com/definition/gig-economy