The founder had a logistics app idea. She found a dev team on Upwork, agreed to $10K over eight weeks, and wired the first payment. Twelve weeks later, she had a partially functional prototype that crashed on login, no access to the codebase, and a developer who stopped responding to messages.
This is not one story. This is the same story I hear two or three times a month from founders who come to Buldtech after their first outsourced project failed. The details change. The failure modes do not.
After reviewing dozens of these failed projects, I have identified five structural problems that account for nearly every one. None of them are about the quality of the code. They are about the structure of the engagement.
Failure mode 1: No written spec
The founder described the app on a call. The developer said “got it” and started building. Two months later, the founder saw the first demo and realized the developer built something completely different from what she imagined.
This happens because a verbal description of an app is not a specification. The founder says “users can track their deliveries.” The developer hears “a map view with real-time GPS.” The founder meant “a list with status updates.” Nobody discovers the gap until money and time are already spent.
What to do instead: Before any code gets written, produce a written scope document that lists every screen, every user action, and every expected outcome. It does not need to be a 50-page PRD. A two-page brief answering the seven questions in our MVP scoping guide is enough. The point is that both sides sign off on the same written document before development starts.
Failure mode 2: Hourly billing with no cap
The developer quoted $50/hour. The founder estimated 200 hours. The project actually took 400 hours because scope expanded, rework piled up, and there was no incentive for the developer to work efficiently. Final bill: $20K instead of $10K.
Hourly billing puts all the financial risk on the founder. Every scope discussion, every rework cycle, every miscommunication costs the founder money. The developer has zero incentive to be efficient because inefficiency is profitable.
What to do instead: Use fixed-price contracts with defined deliverables. A contract that says “$8K for a working web application that does X, Y, and Z, delivered in 21 days” puts the budget risk on the team doing the work. If they underestimate, they absorb the cost. If they overestimate, they earn margin. Either way, the founder knows exactly what they are paying. This is why we structure all Buldtech engagements as fixed-price, fixed-scope builds.
Failure mode 3: No demo milestones
The developer sent weekly Slack updates: “Making good progress on the backend.” “Almost done with the auth system.” “Working on the API integration.” The founder had no way to verify any of this because she never saw working software until week 10 of a 12-week project.
Text updates are not progress. Only working software is progress. If the first time you see your app running is the final delivery date, you have no leverage to course-correct and no way to catch problems early.
What to do instead: Require a working demo by day 10 of a 21-day project, or by the midpoint of any engagement. Not a slide deck. Not a Figma prototype. A clickable, deployed version of the core workflow running in a browser. At Buldtech, we run a mandatory Day-10 demo where the founder sees and clicks through the actual product. If something is wrong, there are still 11 days to fix it. If the demo was only on day 20, there would be one day.
Failure mode 4: No code ownership clause
The project ended. The founder asked for the code. The developer said, “That’s not included in the agreement.” Or worse: the code lived on the developer’s personal server, and when the relationship soured, the founder lost access to everything.
This is more common than most founders realize. Without an explicit intellectual property clause in the contract, the developer may retain ownership of the code they wrote. In some jurisdictions, the default legal position is that the creator owns the work unless a written agreement says otherwise.
What to do instead: Your contract must include an explicit clause stating that all code, designs, and intellectual property produced during the engagement are the founder’s property upon payment. Additionally, require that code is pushed to a repository you own (a GitHub or GitLab account in your name) from day one. Not at the end of the project. From the start. If a developer refuses to work in your repository, that is a red flag significant enough to walk away.
Failure mode 5: No post-launch plan
The app launched. Then the developer’s contract ended and nobody was responsible for monitoring uptime, fixing bugs, or making the small adjustments that real users inevitably need.
An MVP without a post-launch support window is a product with a one-day lifespan. Real users find real bugs. Servers need monitoring. Small UX issues that are invisible in testing become obvious with actual traffic.
What to do instead: Negotiate a 30-day post-launch bug-fix window as part of the original contract. This should cover bugs in the delivered scope, not new features. Define “bug” explicitly: something that was specified in the scope document and does not work as described. New features are a separate conversation and a separate budget. But the baseline product should work as agreed for at least 30 days after launch.
The pattern underneath all five failures
Every one of these failure modes is a governance problem, not a talent problem. The developer might have been perfectly competent. But without written scope, fixed pricing, demo milestones, ownership clauses, and post-launch terms, even a good developer will produce a bad outcome for the founder.
The fix is structural. Before you sign your next contract, check it against these five requirements. If any are missing, negotiate them in or find a different team.
Your next step
If you are about to hire a dev team, or recovering from a failed project and preparing for a second attempt, download the MVP Scope Clarity Checklist. It gives you a pre-contract audit based on the five failure modes above, so you can verify every structural requirement is in place before you wire the first payment. And if you want a fixed-price build with a Day-10 demo, code ownership from day one, and a 30-day bug guarantee built into the contract, book a free scope call with Buldtech.