Startups and TDD

Yesterday Uncle Bob put up a post on using TDD in start up environments “The Startup Trap” its a good read. Check it out.

Nate soon after posted:


I wanted to write a few comments about TDD in startups. Good code is the least of the risks in a startup. Sorry but worrying about technical debt making us go slower when we have a two month runway and likely will pivot four times to quote Bob.

Captain Sulu when the Klingon power moon of Praxis exploded and a young Lieutenant asked whether they should notify Star-Fleet: “Are you kidding?” ARE YOU KIDDING?

One of the biggest mistakes in my career was building something appropriate…

It was just after Hurricane Katrina. I was living in a hotel. An acquaintance asked me if we could hack together this business idea they had for a trading system. He had the knowledge but not the know how. I said sure, hell I was living in a hotel!

In less than two weeks we had an algorithmic trading system. It was a monstrosity of a source base. It was literally a winforms app connected directly to the stock market. UI interactions happened off events directly from the feed! Everything was in code behinds (including the algos!) Due to the nature of the protocol if anything failed during the day and crashed the app (say bad parsing of a string?) the day for the trader was over as they could not restart.

But after two weeks we put it in front of a trader who started using it. We made about 70-80k$ the first month. We had blundered into the pit of success. A few months later I moved up with the company. We decided that we were going to “do things right”. While keeping the original version running and limping along as stable as we could keep it while adding just a few features.

We ended up with a redundant multi-user architecture nine months or so later, it was really quite a beautiful system. If a client/server crashed, no big deal just sign it back on, multiple clients? no problem. We moved from a third party provider to a direct exchange link (faster and more information!). We had > 95% code coverage on our core stuff, integration suites including a fake stock exchange that actually sent packets over UDP so we could force various problems with retry reconnects etc/errors. We were very stable and had a proper clean architecture.

In fact you could say that we were dealing with what Bob describes in:

As time passes your estimates will grow. You’ll find it harder and harder to add new features. You will find more and more bugs accumulating. You’ll start to parse the bugs into critical and acceptable (as if any bug is acceptable!) You’ll create modules that are so fragile you won’t trust yourself, or anyone else, to modify them; so you’ll work around them. You’ll build a festering pile of code that, with every passing week, requires more and more effort just to keep running. Forward progress will slow and falter. It may even reverse as each release becomes buggier and buggier, and less and less stable. Catastrophes will become more and more common as errors, that should never have happened, create corruptions and damage that take huge traunches of time to repair.

We had built a production prototype and were suffering all the pain described by Bob. We were paying down our debt in an “intelligent” way much the way many companies that start with production prototypes do.

However this is still a naive viewpoint. What really mattered was that after our nine months of beautiful architecture and coding work we were making approximately 10k/month more than what our stupid production prototype made for all of its shortcomings.

We would have been better off making 30 new production prototypes of different strategies and “throwing shit at the wall” to see what worked than spending any time beyond a bit of stabilization of the first. How many new business opportunities would we have found?

There are some lessons here.

1) If we had started with a nine month project it never would have been done

2) A Production Prototype is common as a Minimum Viable Product. Yes testing, engineering, or properly architecting will likely slow you down on a production prototype.

3) Even if you succeed you are often better to stabilize your Production Prototype than to “build it right”. Be very careful about taking the “build it right” point of view.

4) Context is important!

Never underestimate the value of working software.

One Comment

  1. Posted July 25, 2013 at 12:35 am | Permalink | Reply

    I first want to say what a great post and congratulations on the success. I have a question on the “building it right” point of view and the conclusions you made. If you took your minimal viable product and with each update(say two week schedules) made incremental improvements to the architecture, spent time removing “code debt”, and adding new feature) do you think you would have reach something a similar result maybe with a slight delay?

2 Trackbacks

  1. […] czerepach. Sporo szumu zrobiło się na twitterze. Greg Young napisał ciekawy wpis na swoim blogu ale tutaj to już się […]

  2. […] practice”. Greg Young wrote a (de)motivating blog post about a startup he participated at ( His point proves that going quick and dirty is a valid way. Even Uncle Bob has been caught saying […]

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