Top 6 common challenges in software development and tips to overcome them

Top most common challenges in software development for startups and scaleups

Entrepreneurs often find it hard to turn their ideas into reality because they have limited resources and time. They also face tough competition and need to find ways to stand out and attract the right audience. In this article, we cover the top 6 challenges in custom software development that companies may encounter. We also share helpful tips and solutions, so you can handle these challenges successfully and keep your projects on track.

Tight budget

The question of finances is always crucial for entrepreneurs, especially for startup owners. If the budget is insufficient, the project may be significantly delayed or even canceled. Therefore, for the success of the project, it’s necessary to calculate the budget correctly and meet its limits. There are many factors in software development that can make it difficult to estimate the cost of a project. These things may be unclear to entrepreneurs and they may underestimate possible costs.

There are two main reasons why it happens — poor communication and poor planning. If some of the requirements aren’t specified in the beginning, the scope of work can change throughout the project, as well as the costs. Projects can also go beyond the budget if the team fails to carefully plan the development. The team can face difficult technical problems that take a long time to solve, and if they didn’t plan the risks, they might miss the deadlines and exceed the budget.


To make sure that you stay within the budget, the project should be carefully planned from start to finish. At Ronas IT, we use analytics to estimate projects accurately. First of all, our manager discusses the project with the client and collects information about it: idea, requirements, monetization strategy, and project documentation if any. Then our analyst turns the requirements into achievable goals in the form of user stories — short descriptions of the product’s features. One user story can be implemented within a development sprint, which makes it easy to estimate the time needed to complete all the features. As a result, we get a table that looks like this:

Flow User storiesEstimation in hours
Project initializationUI KIT16
Visual concept12
Flow chart6
Concept presentation4
Register/log inI can register/log in with phone number8
I can register/log in with socials
Create an accountI can shoose account type (individual, business)16
I can pass KYC for business account (if chosen)
I can pass KYC for individual account (if chosen)
I can fill in account info
Search for an itemI can search by name 56
I can sort
I can filter
I can save searches
I can add item to favorites
I can add review
I can be redirected to business
Book an itemI can choose type (hourly, daily, monthly)32
I can choose pickup/dropoff time
I must accept terms and conditions
After bookingI can leave review20
I can rate item
I can rate item owner
ChatI can text to users I have relation to24
I can send images to users I have relation to
I can report users
List an itemI can add name48
I can add photos
I can add availability
I can add location
I can add price
Profile detailsI can change profile info8
I can change payment method
Here’s an example of our estimate for a UI/UX design project

With such a list of features, we can accurately plan and estimate the design stage and make an approximate assessment of the development stage. As soon as the design is ready, we make an accurate development estimate — without design, it’s more difficult for developers to estimate the time needed for the project because they can’t see all the complexities of the future interface.

Also, we include some extra time in the plan to solve possible complex problems. This way, even if we face any difficulties, we’ll be able to fix them within the agreed timeline and budget limits.

Let us help you estimate your
project carefully

High competition

High competition in the market is a major challenge in software development. The new product may end up hidden in the shadow of larger players or well-established brands. Let’s say you are a startupper and wish to develop a taxi app — competing with popular products like Uber, Gett, and Lyft can seem impossible.


To stand out, companies must offer users something unique and valuable. The first step is to research the market, find what customers need, and focus on solving their problems. Also, creating strong marketing plans, improving products based on feedback, and working with partners can help overcome tough competition. The key is to be flexible, listen to your users, and make sure the product meets their needs.

Remember that all popular products were startups once. A good example of a startup beating market leaders is Netflix. Initially entering the market as a DVD rental service, the company managed to change the whole industry by adopting streaming technology and a customer-centric approach.

Competitive challenges in software development and how to overcome them using Netflix’s example
This is how Netflix used to look back in the days

Netflix offered users a unique solution and filled a niche that competitors weren’t addressing. The company focused on convenience and personalization to enhance customer experience — they offered a user-friendly interface and recommended content based on individual preferences. They also forged partnerships with film studios, television networks, and various devices for seamless streaming options to expand their content library and improve accessibility. This allowed them to overcome challenges in software development and become one of the most used digital services.

Rapid technology change

Keeping up with fast-changing technology is a big issue for many businesses. Software development world is extremely dynamic — new trends appear every now and then. When new technology comes along, there is always a risk that old products become outdated quickly, and not keeping up-to-date may cause problems with money and a company’s reputation.


To fix the problem, businesses need to be ready to change and learn new things. They should also keep an eye on what is happening in the market and use the information to make good decisions. Using new technology helps to create new business and operational models, make your product more popular and improve customer engagement. Here are some of the most popular technology trends that you can implement into your business:

  1. Cloud сomputing: Using cloud services can help companies access robust computing resources, maintain secure data storage, and facilitate seamless collaboration among team members, even when they are working remotely.
  2. Artificial Intelligence (AI) and machine learning: These technologies can empower businesses to analyze large amounts of data, identify patterns, and make informed decisions. AI can also be used for automating repetitive tasks, improving customer service through chatbots, or providing personalized experiences to customers.
  3. Internet of Things (IoT): IoT devices enable businesses to collect real-time, valuable data and insights from connected devices, helping them monitor performance, optimize processes, and enhance product offerings.
  4. Virtual and Augmented Reality (VR and AR): Implementing VR and AR technologies can enhance customer experiences, offer immersive marketing, and streamline product development processes.

Implementing new technologies is not scary if you use the concept of reversibility — the ability to reverse the entire product’s system or its components so that it doesn’t depend on a single technology. To do this, you need to develop a flexible architecture so that it can withstand changes without having to rebuild the entire solution.

Data privacy and cybersecurity

One of the most pressing challenges faced in software development today is ensuring data privacy. Cybersecurity threats and data breaches pose a significant risk not only to the reputation of companies but also to the trust of their users. The potential financial losses due to such breaches show that investing in robust data protection measures is a must. In 2021, the FBI’s IC3 documented 847,376 instances of cybercrime, resulting in prospective damages surpassing the $6.9 billion mark.


As a solution, businesses must adopt strict security protocols, including end-to-end encryption and multi-factor authentication, while adhering to regulations and standards such as GDPR, HIPAA, and ISO 27001. By fostering a culture of proactive data protection and integrating security measures into the very foundation of their products, companies can ensure the privacy of user data and diminish the risk of undesirable consequences, paving the way for innovation and business growth.

Security and privacy regulations to overcome cybersecurity challenges in software development

Laws keep changing, so software companies you’re partnering with must be aware of new rules and update their work. They need to use tools, like firewalls, antivirus programs, and security systems, to keep their software and data safe. They also need to make sure that the products have the latest security upgrades.

Ever-changing user needs

The constantly shifting landscape of user needs and preferences is also a common challenge in software development. As customer expectations evolve, developers must adapt their products to maintain relevance and value in the market.


To effectively address this challenge, product developers need a deep understanding of their target audience, and they must stay attuned to changes in consumer behavior by leveraging data-driven insights. Continual engagement through user feedback loops, market research, and collaborative innovation can ensure that product developers stay ahead of the curve and make data-driven decisions. Adopting agile methodologies and fostering a culture of adaptable development also allows companies to respond more efficiently to dynamic user needs.

Choosing features

Choosing features is an essential yet challenging aspect in software development. Picking the right mix of creative and vital features can be tough in a changing market. The main problem is figuring out which features will add the most value to customers, while also helping the product succeed. There might be many great ideas, but limited resources mean that entrepreneurs need to make smart choices. If the wrong features are chosen, the product could miss out on customers, leading to disappointment.

Many startups try to do too much too fast, causing slow growth and missed deadlines. To succeed, it’s important to solve one problem for a specific group of people before expanding. Adding features can be tempting, but startups should remember that they have limited time and money. They should spend their resources wisely on valuable activities.


Starting with a minimum viable product can help you reach your goals with fewer resources, get initial feedback, and improve with further iterations. The MVP is a basic version of the product with just the key features needed to solve the main issues for a certain group of customers.

During one of our projects, UK Retreats, we developed only the necessary features needed for finding interesting places for rent, which took us just 3 months. As a result, the app had 850+ registrations in the first month — the key features were enough to attract target customers.

How UK Retreats dealt with challenges in software development
This is how the finished product looks. You can check the whole case here.

To choose the core features, you need to use a clear prioritization system. By looking at each feature’s worth, cost, effort, and effect, entrepreneurs can make better choices and focus on the most valuable features.

  1. MoSCoW Method: This approach categorizes features into four groups — Must-have, Should-have, Could-have, and Won’t-have. Must-haves are features that are critical for the product’s core functionality. Should-haves are still important but not as urgent. Could-haves are nice-to-have features that can improve the user experience, and Won’t-haves are low-priority features to revisit in the future. By sorting features into these categories, startups can create realistic plans that focus on the essentials first.
MoSCoW prioritization method to overcome challenges in software development
  1. RICE Model: The RICE method evaluates features based on four factors — Reach, Impact, Confidence, and Effort. Reach considers the number of users affected, Impact measures the effect on users, Confidence assesses how certain the predictions are, and Effort estimates the required resources for implementation. By scoring each feature using these criteria and calculating an overall RICE score, startups can rank features and prioritize their development.
RICE prioritization method to overcome challenges in software development
  1. Kano Model: This technique is based on customer satisfaction and classifies features into five categories — Attractive, One-dimensional, Must-be, Indifferent, and Reverse. The model takes into account how customers will react to different features, helping startups focus on those driving the highest satisfaction levels.
Using Kano model to overcome challenges in software development

To use these methods, startups should first compile a list of proposed features and then assess each feature using the chosen method’s criteria. This might require market research, customer feedback, or internal assessments. By prioritizing and selecting features based on the evaluation results, startups can ensure that they are allocating their limited resources effectively and delivering value to their customers.


Creating custom software has various challenges that business owners need to overcome. These challenges include managing budgets, dealing with competition, keeping up with technology, protecting data, understanding user needs, and picking the right features. However, careful planning and understanding the market can help tackle these problems.

By using the tips in this article, like properly planning budgets, finding unique ways to stand out, staying current with technology, following data protection rules, connecting with users, and focusing on vital features, businesses can successfully overcome challenges in software development. This way, they can create products that satisfy users and succeed in a competitive market, leading to growth and success.

If you wish to create a product for your business and have any problems with development, you can contact us. At Ronas IT, we help our clients reach their business goals with our expertise in design and development. Click the button below to connect with us and we’ll answer all your questions.

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