Oleg Sadikov, co-founder and CEO of the software testing company DeviQA.
The trading app Robinhood made headlines in early 2020 when it experienced an outage that affected users on an enormous trading day. From this, and from many other startup-related headlines, leaders need to learn one big lesson: Software quality assurance in startups isn’t glamorous, but it can make or break a company’s story.
Software testing best practices are a top indicator of a startup’s scalability and long-term profitability. When skillful QA engineers back up coders, startups can reduce risk and show operational maturity to investors.
The Hidden Risks
I am surprised by how few startup founders comprehend the importance of QA for investors. When quality assurance isn’t a priority, there is a big chance of tripping over one or more common failures:
1. Bugs will worsen the user experience. Say a shopping app starts charging users for unknown purchases. These bugs will make users flee. On the other end of the spectrum, Apple shipped iOS 16 with a camera-shake defect, but resolved the issue in only 10 days. This kind of proactivity can help endear users.
2. Security vulnerabilities can lead to future problems. Breaking HIPAA regulations can result in million-dollar penalties. COPPA also carries severe penalties, as seen in cases involving TikTok and Microsoft.
3. Rising costs due to post-release fixes. There is a common saying that claims post-release bugs can cost up to 100 times more to resolve than when they’re caught in the design phase. On top of this, it’s important to remember that the average breach cost $4.88 million in 2024. That’s real money flowing out because defects escaped into production.
4. Failed launches lead to investor doubt. Investors may see rising customer-acquisition costs and compliance overhang and red-flag a startup. Only one bad experience costs you a customer in 17% of cases.
Why Strong QA Practices Signal True Startup Scalability
QA maturity is a strategic leg-up for VCs sizing up startup investment risks. That’s why quality assurance correlates with scalability.
Consider the following benefits that come with strong QA:
1. Product Reliability: Mature QA has reproducible environments and SLO-driven release criteria. This can reduce failure rate and time-to-restore.
2. CSAT, NPS And Higher Retention: Fewer production defects lead to fewer broken journeys. PwC’s research, cited above, stresses that even beloved brands can lose customers after just a couple of bad experiences.
3. Technical Debt Management Makes It Easier To Scale: It’s challenging to achieve a zero tech debt. But proper management makes it way easier to scale processes and a reliable product.
4. Faster Iteration Leads To Sustained Growth: Teams advocating for QA-driven business growth usually move faster, in my experience.
The Importance Of QA For Investors
Strong quality assurance goes beyond the technical side of the business. From what I’ve seen in the industry, it has several financial incentives, too.
1. Long-Term Cost Savings: An upfront $50,000 QA investment may seem like too much for an early-stage startup. But this could prevent $500,000 in remediation costs. It’s not obvious, and it often goes unnoticed, but a single breach would prove it was worth the move.
2. Higher Valuation In Funding Rounds: Many AI-driven software testing startups I’ve seen in the space secure millions in seed funding. Investors understand a correlation between startup scalability and QA.
3. Higher LTV: QA affects the possibility of customer frustration and churn. Well-handled quality assurance can improve retention and directly influence LTV predictability.
4. Market Competitiveness: If your product is stable for a long period of time, it can build trust among users, partners and subsequent investors.
Key Indicators Of QA Maturity
I’m not a VC, but I’ve spoken with many investors of different sizes. Based on those conversations, here’s what I learned about investor decision making in tech startups:
1. QA Structure And Testing Automation: The company should have a dedicated QA function, where critical workflows and regression are usually automated.
2. Shift-Left Testing: They test early, and automated tests are included in CI/CD pipelines.
3. Feedback And Responsiveness: They have a structured process for user feedback, support tickets and real-time metrics, and the team acts on specific quality signals.
4. Integrated Security And Compliance: Compliance checks and audit logs are part of the QA pipeline, especially if they operate in a highly regulated market.
Five Actionable Steps For QA-Savvy Investors
On the other side of the deal, here’s how tech-savvy investors can examine software QA in startups and strengthen their due diligence.
1. Ask more questions. Check the startup’s QA roadmap. How do they validate features? What is their testing approach? Ensure QA is integrated from inception (this particularly shows operational maturity).
2. Assess QA in development. Seek shift-left practices. Unit and integration tests should be a part of the CI/CD pipeline. Verify whether they execute smoke, regression and vulnerability scans before deployment.
3. Assess automation. Look for automation in regression, integration and functional suites. QA metrics should align with the type of testing they use.
4. Equate QA investment with business resilience. QA is not a cost center; it is a hedge against tech fragility. In my opinion, the earlier a startup invests in software testing best practices, the longer they will operate.
5. Encourage portfolio companies to do the same. Last but not least, there’s a culture move you can make: Advise founders to treat QA strategically, automate key tests, monitor production and define rollback strategies.
Conclusion
QA is essential, whether you’re operating a startup or investing in one. It’s time to make QA more than just a line-item checkbox. Make it an essential part of your business operations, and your bottom line will thank you.
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