By Scio Team 

When we think about the landscape of software development, it’s easy to fall into a binary view: people either work at a tech start-up, with the allure of innovation and cutting edge technology, or they work with a corporation like Google, Microsoft, or Amazon that promises stability and long term rewards in exchange for creating products with a more incremental and risk-averse pace.

There’s plenty of content about what it is like to work in both kinds of organizations, with lots of writing devoted to discussing the virtues and drawbacks of each, but are those the only two options in software development? What happens with mid-sized software companies, and in which ways do they distinguish themselves from either start-ups or big companies? 

Outputs and outcomes

Let’s try and define the actual differences between these three types of companies, specifically in regards to how they view and measure product development objectives. After all, a software organization can be defined by the outcomes they want to achieve, and the outputs they decide to focus on to reach them. But what do these terms mean? In the words of Kirstie Magowan, from the BMC Blog

  • The outcomes are what the business wants or need to achieve.
  • The outputs are the actions or items that contribute to achieving it.

Or in other words, “outcomes are the results, and outputs are the activities that support the desired results”, and clarity of purpose for both of them defines what a given organization focuses on to develop the best possible products.

So, within product development for software companies, outcomes are things like new version releases, new features implemented for the users, faster development cycles, improved quality, etc. On the other hand, outputs are things like software requirements/user story documentation, UI/UX prototypes, code, database scripts, test cases, DevOps scripts, and so on.

However, some nuance needs to come into play at this point since we can imagine that organizations of different sizes and maturity cannot all seek the same outcomes. We’ll explore it in more detail, but in our experience, the main force that drives start-ups, mid-sized companies, and big corporations is that their target user bases have different expectations of their respective products.

The weight of expectations in development

What is prioritized in product development when it comes to the size of the company?

The top desired outcome for a start-up development team, working on the early stages of a new product, is to build an MVP as fast as possible so the company can launch it and attract enough early adopters to keep iterating an idea”, says Luis Aburto, CEO, and Co-Founder of Scio, about his experience working with companies of all sizes. “At this point, you have a ‘forgiving’ attitude among the user base if the product shows enough potential. Early adopters will frequently overlook some issues if the value they get in return is enough and the product has a clear roadmap of features and functionalities that will improve the final version in the future.

So the challenge for a start-up is to iterate a product fast enough to establish itself before interest dries up. After all, if we define a start-up as “a temporary organization designed to look for a business model that is repeatable and scalable”, the push for innovation is always running against time, looking to please early adopters enough so the product gets accepted in the mainstream. That way, you get organizations more willing to bend the rules, avoid the bureaucracy that comes with very defined processes, and overlook some production requirements (like documentation) if the team is small and their output is focused on delivering a product.

In contrast, for a big company”, Luis continues, “every time you implement a new feature, you have an opportunity to either delight your users or cause a catastrophe. Suppose you are an organization that has maintained a product for 10 or 15 years. In that case, there are a lot of dependencies and expectations that come along with that, and if you are not careful, test everything closely, and research your market fully, you can end up in a position where you can damage your clients and users. What if they depended on certain features or functionality for their jobs, or had important data stored inside the product? The outcomes here would look very different, as the “forgivingness” of your user base gets lower the more mainstream it is.

These expectations, then, dictate the best outcome for a given organization, and in turn, these outcomes will dictate the outputs needed to achieve the goal. However, the unique challenge here is that, while outputs can be defined and measured easily, the outcomes seek to “change a behavior in the user”, which is a much more subjective and nebulous goal. To this end, Natalie Diggings, of OpenView Partners, proposes a set of questions to evaluate the performance of any given team with an outcome-focused mindset that can help engineering teams and management alike to keep their goals aligned:

  • Are you delivering value for the customer?
  • Are you delivering results each quarter that will help grow the business?
  • Are you mitigating risk?
  • Do you know the ROI of the features you’re building?
  • Did you ship when you said you would ship?

What we try to do at Scio, by implementing the Agile methodologies in every project we work on, is to establish a minimum of processes and continuous communication to ensure the output our team contributes to the desired outcome for the product, avoiding misaligned expectations and other issues”, continues Luis about Scio’s experiences working with start-ups. “And for a big company, we try and secure a seamless on-boarding of our developers, as these organizations have clear and defined processes that we like to follow to a T to fulfill these same expectations.

Mid-sized companies: Hitting the sweet spot.

However, Scio’s area of expertise is a segment of the software development industry that doesn’t seem to have that much attention directed at the mid-sized range of companies that hit the balance between a start-up and a big corporation, which has some unique benefits worth exploring. 

For example, if we go back to expectations, outputs, and outcomes, an organization of around 50 to 100 people is still guided and directed by the vision of its founders, which seems to bring some advantages that balance out the issues of the other two types of companies. 

Working with a big, Microsoft-like corporation seems like a no-brainer, but at that size, and the bureaucracy that comes along with it, there’s a very limited impact you can have in a given project. But with a medium-sized organization, where you still have the opportunity to work directly with the founders and share and understand their vision, alongside an organization still looking towards the same clear goals, collaboration becomes a more personal matter. Is a business with a human element still felt”, Luis concluded. 

These kinds of connections are important when you look for a partner to help you reach a specific outcome, as a “clarity of purpose” can still be shared among the development teams, executives, and product owners, with the benefit of the structure, processes, and methods of a mature organization. After all, before hitting the “millions of users” metric, a mid-sized company still has the chance to push innovation forward with minimal risk.

This is also another big difference between these three kinds of organizations; for a start-up, risk in pursuit of innovation is the name of the game, and for a big corporation, incremental improvement with stable growth is the norm. Having an approach that can still make use of both perspectives is what makes working with these companies so interesting.

On the business side, a mid-sized organization still looks to grow, but the relationship with their users and clients still has a personal touch, with support and communication at a human level, which allows them to get new clients more easily while still maintaining their current ones. And in the development size, the cohesion between collaborators, both in-house and outsourced, still has a clarity of purpose in their outputs. This is the way Scio functions, and also why we like to offer their support to mid-sized companies; our communication, collaboration, and goals always come hand in hand during a project. With this, the best outcomes are more measurable, reachable, and all in all, understandable”, concludes Luis.

The Key Takeaways:

  1. An outcome is defined by the expectations of the clients of a given company, which should be taken into account in every development cycle.
  1. Clarity of purpose is critical; if your dev team doesn’t know where their work is pointed towards, then it’s difficult for the output to match the outcome, which can vary heavily depending on the age and size of the organization.
  1. Companies of different sizes have different strengths and weaknesses, but a mid-size company can have the best of both worlds: the processes necessary for a project to succeed, while still maintaining cohesion among its collaborators.
  1. The personal relationships that can grow during collaboration are important for the outcome of a project, as they make it easier for a team of collaborators to share a vision and purpose in their outputs.