Hopefully this one is not too complicated.
If you’re a founder who is commissioning their first MVP, some part of the money that you spend will be wasted. Keep the numbers round, if you spend £100,000 on your MVP, a percentage of that money will go into activity where software is being written, but it won’t make it into a live version of the product – i.e. it’s wasted.
This happens on EVERY software project, whether you’re a first-time non-technology founder, or a 30-year veteran software architect and CTO, a percentage is wasted. It just depends how much.
What I want you to imagine is that you have a needle at the 50% mark, and a wind can blow that needle one way towards more money being wasted, or a wind can blow that needle the other way towards less money being wasted.
But you are always going to waste SOME money.
If you are a technology startup and you don’t have a technology person within the business, that wind is going to blow the needle in the direction where more money is being wasted. This is just classic expertise stuff – you will simply miss things that a specialist will see and some of the effort you pay for will end up not being used.
If you do have a technology person within the business, that wind is going to blow the needle in the direction where less money is being wasted, because that’s the whole reason why you bring a specialist technology skills into a business. You are looking to optimise spend – i.e. you want that wasted percentage to be as small as possible.
Any expert is paid for their judgement – whether it’s marketing, or finance, or technology, or whatever – it’s a case of given the parameters, what’s the best action to take to get the outcome you want. Without having that judgement available within the business as a core function, you’re always going to waste more money compared to having that judgement available within the business whatever the discipline is.
It just so happens in technology businesses it’s particularly risky because the initial money you have to spend up front on your MVP is so high.