How to Conquer Technical Debt and Keep Your Scale-Up Moving Forward
When you’re in the early days of building a startup, everything moves at a breakneck pace. You’re sprinting towards product-market fit, constantly experimenting, and pushing your product out the door as quickly as possible. Once you’ve found that fit, the real growth begins. Revenues start climbing, customers multiply, and the headcount balloons. But this phase isn’t without its challenges. If you’re not careful, you’ll find yourself stuck in a bottleneck that can halt your progress. One of the most common—and dangerous—of these bottlenecks is technical debt.
At Monkhouse & Company, we’ve seen countless scale-ups wrestle with this problem. The tools and practices that were perfect for the rapid experimentation of the startup phase suddenly become liabilities. The key is knowing when to shift gears and adapt your strategies to keep up with your company’s growth. So, how do you break through the technical debt bottleneck and keep scaling? Here are ten actionable steps you can take, drawing from the lessons we’ve learned from working with high-growth companies.
What is Technical Debt?
To understand technical debt, it helps to think of it in terms similar to financial debt, where there are two key components:
- The Principal: This represents all the work required to bring your technology stack up to date. It includes everything from postponed maintenance and upgrades of underlying systems to changes needed for compliance with data standards and customizations of off-the-shelf software that make it difficult for the original vendor to provide ongoing support. Essentially, it’s the accumulation of all the “shortcuts” and “patches” that need to be addressed to modernise and stabilise your systems.
- The Interest: This is your organisation’s ongoing cost due to these shortcuts. It includes the “complexity tax” paid every time a new project must work around outdated, fragile integrations, standardise inconsistent data, or create temporary fixes to mitigate risks and meet business needs. These ongoing issues reduce efficiency, slow down project velocity, and negatively impact budgets and return on investment.
Together, the principal and interest of technical debt act as a significant drag on a company’s overall value, reducing its ability to innovate, respond to market changes, and achieve long-term growth.
1. Understand How You Got Here: The Role of Technical Debt
Technical debt is like a credit card. In the beginning, it lets you do things faster. You trade quality and long-term stability for speed, which is exactly what you need when you’re finding your feet. But just like a credit card, if you don’t manage it well, the debt starts to pile up. Before you know it, you’re facing high interest rates, and your growth is stunted because you’re spending all your time and resources paying off that debt. A 2020 survey by McKinsey found that 60% of CIOs believe that technical debt severely limits their ability to innovate and introduce new technologies. The survey also highlighted that, on average, companies spend 10% to 20% of their technology budget on managing technical debt.
Action Step: Regularly review the state of your technical debt. Conduct technical audits every quarter to identify the most critical issues. Include both the engineering and product teams in these reviews to get a holistic view of the debt and its impact on your business.
2. Identify the Types of Technical Debt in Your Organisation
Not all technical debt is created equal. Some debt is necessary and strategic, like building a minimum viable product (MVP) to validate your idea. Other debt is the result of neglect—like outdated libraries, poor documentation, or overly complex architectures that slow down development.
Action Step: Categorise your technical debt into types—such as code quality, testing gaps, outdated libraries, and manual processes. Prioritise paying down the debt that has the highest impact on your team’s productivity and the customer experience.
3. Spot the Warning Signs Early
Technical debt doesn’t just appear overnight; it creeps up on you. Look for warning signs like slower feature development, increased bug reports, higher customer churn, and employee frustration. According to a report by Stripe and Harris Poll, developers spend up to 42% of their time on “bad code”—a key indicator of technical debt. This inefficiency costs businesses an estimated $85 billion annually in lost productivity in the United States alone. If your engineers are spending more time fixing issues than building new features, it’s time to take action.
Action Step: Set up metrics to monitor the impact of technical debt. Track engineering velocity, the number of bugs reported, customer satisfaction scores, and onboarding time for new developers. Use these metrics to determine when it’s time to invest in paying down debt.
4. Align on a Technical Debt Strategy with Your Team
It’s not enough to recognise you have technical debt—you need a strategy for managing it. This strategy should be clear, intentional, and evolve as your company grows. Your team needs to understand why they’re taking on debt and how it fits into the bigger picture.
Action Step: Develop a technical debt management plan that includes guidelines for when it’s acceptable to take on debt and when it needs to be paid down. Communicate this plan clearly to your team and revisit it regularly, especially after major changes like a new round of funding or a pivot in product strategy.
5. Empower Teams to Own and Address Technical Debt
Ownership is critical when it comes to managing technical debt. Teams need to feel empowered to tackle debt head-on, without waiting for permission or getting bogged down in bureaucracy. When teams own their code, they are more motivated to keep it clean and maintainable.
Action Step: Encourage a culture of ownership by giving teams end-to-end responsibility for their codebases. Make it clear that managing technical debt is part of their job, not something to be done in their spare time. Provide the tools and resources they need to address debt proactively.
6. Create a Culture of Continuous Improvement
You’re never really “done” managing technical debt. It’s an ongoing process that requires constant attention and iteration. A culture of continuous improvement ensures that your team is always looking for ways to optimise and streamline.
Action Step: Implement regular retrospectives focused on technical debt. Use these sessions to identify areas for improvement, celebrate quick wins, and share best practices across teams. Encourage experimentation and learning from both successes and failures.
7. Invest in Training and Development
As your company scales, your team needs to scale with it. This means investing in training and development to ensure your engineers have the skills and knowledge they need to manage technical debt effectively.
Action Step: Offer training programs focused on best practices for code quality, testing, and automation. Encourage your team to stay up-to-date with the latest technologies and frameworks, and provide opportunities for them to learn and grow within the company.
8. Leverage External Perspectives
Sometimes, you’re too close to the problem to see it clearly. Bringing in external experts can provide fresh insights and help you identify issues you might have overlooked. This can be particularly useful when it comes to technical debt, as external experts can bring a wealth of experience from different industries and contexts.
Action Step: Engage with consultants or external advisors to conduct a technical audit of your systems. Use their feedback to identify blind spots and develop a plan to address them. Be open to new ideas and approaches, and don’t be afraid to make bold changes if necessary.
9. Set a High-Quality Bar and Stick to It
It’s tempting to cut corners when you’re moving fast, but this often leads to more technical debt in the long run. Setting a high-quality bar and sticking to it ensures that you’re building a solid foundation that can support future growth.
Action Step: Define clear quality standards for your codebase and enforce them consistently. Use automated tools to enforce coding standards and run regular code reviews to catch issues early. Make quality a non-negotiable part of your engineering culture.
10. Balance Short-Term Gains with Long-Term Success
Scaling a startup is a marathon, not a sprint. While it’s important to move quickly, you also need to think about the long-term health of your company. This means balancing short-term gains with long-term success and being willing to make tough decisions when necessary.
Action Step: Develop a roadmap that balances short-term feature development with long-term technical investment. Use data to guide your decision-making and be willing to pivot when needed. Remember, the goal is not just to grow quickly but to build a sustainable business that can thrive over the long term.
Conclusion: Keep Your Eyes on the Prize
Technical debt is a natural part of the startup journey, but it doesn’t have to be a roadblock to your growth. Research by Gartner indicates that 75% of IT organisations will face disruptions due to technical debt, delaying planned business initiatives by at least two years. This highlights the significant impact of technical debt on development velocity and project timelines. By understanding the nature of your debt, setting clear strategies for managing it, and empowering your team to take ownership, you can turn technical debt into a strategic advantage. Remember, it’s all about balance—knowing when to take on debt to move fast and when to pay it down to ensure your foundation is solid. Keep your eyes on the prize, stay focused on your goals, and don’t let technical debt hold you back from achieving your full potential.