Iterative Software Development 101: An Entrepreneur’s Guide

Let’s face it, the topic of software development methodologies and approaches isn’t something an entrepreneur would be interested in unless they’re considering starting an IT business or need help building some sort of of digital solution. Therefore, this article will focus on explaining the concept of iterative software development from a business perspective. We will address the issues of software development costs, the advantages and possible disadvantages of this practice, as well as the best use cases for different types of businesses. The purpose of this text is to answer the most common questions about iterative software development in a short, clear and concise way.

What is the practice of iterative development?

When thinking about software development, many people outside of the IT industry assume that creating a digital product must follow a fixed sequence. It is first the collection and analysis of requirements, then design and prototyping, then the development stage, then testing, and finally deployment and integration. And this approach is definitely sought after. This is called “waterfall” and many companies prefer it to iterative software development for different types of projects.

But is Waterfall the only way to create software? Definitely not. Iterative development is one of the alternatives. Unlike the strict waterfall model, this implies that the entire software creation process is divided into smaller development stages called iterations or sprints. Usually each of these stages includes the development and testing of a particular part of the product’s functionality. Iterations are repeated as many times as necessary to develop fully functional and trouble-free software.

The main characteristics of iterative software development include the following:

  • Initial planning (before actual development begins) can be simple and sketchy as new details, features and vision can be added later
  • Limited time for a developer to complete their work in an iteration and deliver clean working code
  • Decisions to keep or eliminate the result produced in previous iterations are made at each step
  • All previous iterations can be saved, reviewed and modified at any time

Advantages and Disadvantages of Iterative Software Development from a Business Perspective

Every entrepreneur is eager to choose a software development approach based on the results it can bring, the expense involved, and the benefits a certain model offers. Let’s break down the highs and lows of the iterative development process.


  • Shorter discovery phase, less time needed to create the appropriate documentation
  • High adaptability “on the go” according to the customer’s vision and expectations
  • The development process is faster compared to the waterfall approach
  • Possible problems and defects are discovered, diagnosed and corrected earlier, which prevents mass rebuilds of forced software
  • At the end of any iteration, the customer receives a working product that can be presented to the public, evaluated and modified if necessary
  • Evaluating progress is easier for both the technical team and the customer
  • More options for risk assessment and prioritization
  • Feedback from the public is more reasonable, therefore valid

The inconvenients:

  • The overall iterative software development process is flexible, but the mechanisms within iterations are strict
  • Lack of thorough planning often leads to the need to involve more resources in development (both human and financial)
  • Development cost is less predictable as there are no set requirements
  • High customer and user engagement at every stage is crucial for project success
  • Architecture related issues are very common due to sudden changes
  • Setting a certain end date for the project is nearly impossible

When to opt for iterative development and succeed?

To provide you with a better understanding of the specific cases where iterative software development is the best choice for a business owner, let’s compare it to the waterfall model.

The iterative approach works great for enterprise-level projects with robust functionality for several reasons. First, it helps focus on the key functionality first and create a market-ready product for the public to use. Additional features can be added later without the risk of having a bad influence on the already existing software.

An iterative development strategy is also a smart choice for startups and companies that want to try out a new idea. Receiving honest feedback from the target audience during the early stages of development makes it possible to pivot and even disregard unsuccessful ideas without having to spend a fortune on IT services. Not to mention that startuppers often do not have a clear vision of the future product and are not yet able to define clear requirements. Iterative software development helps to avoid delays and misunderstandings if this is the case.

Despite the fact that the iterative model can be more resource intensive, it also works great for projects with a limited budget. Even if you have the money to implement just a few sprints, you’ll still receive a working product, not just lines of code that your audience can’t interact with.

But what about cases where the waterfall is actually a better option than the iterative process? There are! First and foremost, waterfall works best for small projects that need to be completed within a certain amount of time.

If you need software for an industry that requires extensive documentation, clearly defined tasks, and deadlines, the iterative approach won’t be a solution. Choose the waterfall instead.

Also, if you don’t plan to get involved in the development process on a regular basis, the waterfall is also better than the iterative model. The waterfall approach is known for greater autonomy of the technical team. As a customer, you will simply be presented with the functional software developed in accordance with the discussed requirements.


Keep in mind that there is no right or wrong when it comes to software development. Choose the methodology that helps you achieve particular goals in the most efficient way possible. It can be Agile, Waterfall or even a hybrid model that takes into account all your wishes and expectations. The main goal of each of them is to provide you with a market-ready solution that you will be satisfied with!

Comments are closed.