Let me tell you something nobody in the software industry wants to admit out loud.
Most custom software projects fail. Not "kind of miss the deadline" fail. I mean full on train wreck, budget blown, product unusable, team pointing fingers at each other fail.
The Standish Group has been tracking this for years. Their CHAOS reports consistently show that around 70% of software projects either fail completely or come in way over budget and behind schedule. Only about 30% actually deliver what they promised, when they promised it, for what they quoted.
That's insane when you think about it. Imagine if 70% of houses built just collapsed or cost triple the estimate. Nobody would hire a contractor. Yet businesses keep throwing money at software projects with the same blind optimism.
The 5 Real Reasons Software Projects Crash
Let me break down why this keeps happening. It's not random bad luck. There are patterns, and once you see them, you can avoid them.
1. The Requirements Were Never Clear
This is the number one killer. Not bad code. Not slow developers. Bad requirements.
A business owner walks in and says "I want an app like Uber but for dog walking." Cool. But what does that actually mean? Real time GPS tracking? Payment processing? Background checks for walkers? A rating system? Push notifications? In app messaging?
Every single one of those features is a project in itself. But on the initial call it all sounds like "one app."
What happens next is predictable. The dev team builds what they understood. The client expected something different. Nobody wrote anything down properly. And now you're three months in with a product that does half of what was needed and twice what wasn't.
The fix is boring but it works. Write everything down. Use wireframes. Get sign offs on each feature before a single line of code is written. If your developer doesn't insist on this, that's a red flag.
2. You Hired the Cheapest Option
This brings us to the elephant in the room. Upwork. Fiverr. Any platform where you're basically bidding on development talent like it's eBay.
Look, I get the appeal. You post a job, 47 developers from around the world bid on it within an hour, and one of them says they can build your entire SaaS platform for $2,000. Your brain goes "wow, that's a tenth of what the agency quoted." So you hire them.
Here's what actually happens about 80% of the time.
The first week is great. They're responsive, they send you progress screenshots, everything looks good. Then week two hits and communication slows down. Week three, they hit a technical problem they didn't anticipate. Week four, they're basically ghosting you. By month two you've paid $1,800 of the $2,000, you have a half built product with spaghetti code that no other developer wants to touch, and you're back to square one.
I've seen this pattern so many times it's almost comical. Businesses come to us after burning through two or three Upwork freelancers, having spent more total than our original quote, with nothing usable to show for it.
3. Nobody Managed the Project
Building software without project management is like building a house without a foreman. Technically the workers know how to lay bricks. But who's making sure the kitchen isn't being built before the foundation?
On Upwork especially, you're the project manager by default. And unless you have a technical background, you don't know what questions to ask, what milestones matter, or when something is going off the rails.
A real development team has someone whose entire job is making sure the project stays on track. They break the work into sprints. They have daily or weekly check ins. They catch problems before they become expensive.
When you hire a solo freelancer for $15 an hour, you're not getting that. You're getting a coder. And a coder without direction builds whatever makes sense to them, not necessarily what makes sense for your business.
4. No Testing Until the End
Here's a fun pattern. The freelancer or cheap agency builds the entire product over three months. Nobody tests anything seriously until launch day. Launch day arrives and the whole thing falls apart.
Buttons don't work on mobile. The payment system crashes when two people check out at the same time. The search function returns results from 2019 because nobody set up proper database indexing. The login breaks if someone uses a Gmail address with a plus sign.
These aren't hypothetical examples. These are real things I've seen in "finished" products that businesses paid thousands for.
Good development teams test as they build. Every feature gets tested before the next one starts. By the time you launch, the product has already been through dozens of testing cycles.
5. The Tech Stack Was Wrong from Day One
A developer on Upwork picked WordPress with 14 plugins to build your custom inventory management system. A Fiverr freelancer used a no code tool and called it "custom development." Someone chose a trendy JavaScript framework that's perfect for social media apps but terrible for your data heavy B2B platform.
The technology choices made at the beginning of a project affect everything that comes after. Speed, scalability, security, maintenance costs. Pick the wrong foundation and you're either rebuilding from scratch in a year or paying a fortune to patch problems that shouldn't exist.
This is where experience matters more than hourly rate. A developer who costs $15 per hour but picks the wrong tech stack will cost you way more in the long run than one who charges $80 but gets the architecture right.
The Upwork Problem Nobody Talks About
I want to dig deeper into the freelancer marketplace thing because it's genuinely costing businesses millions of dollars collectively.
Upwork, Fiverr, and similar platforms are built on a fundamental mismatch. They optimize for price and speed of hiring. Not quality. Not accountability. Not project success.
Think about the incentive structure. A freelancer on Upwork needs to win jobs. The easiest way to win jobs is to bid low and promise fast delivery. So the platform naturally selects for people who underquote and overpromise. The good freelancers who quote realistic prices get outbid by someone in a lower cost country who says they can do it in half the time.
The reviews are misleading too. Someone can have a 4.9 star rating because they're great at small tasks like fixing a WordPress bug or designing a logo. But that tells you nothing about whether they can architect and build a complete custom application.
And when things go wrong, what's your recourse? You can leave a bad review. That's it. There's no warranty. No obligation to fix bugs after handoff. No long term support. You have a pile of code and a "best of luck" message.
Compare that to working with an actual development agency. You have a contract. You have defined deliverables. You have a team that stakes their reputation on every project. If something breaks after launch, there's someone to call.
How to Be in the 27% That Succeeds
Alright, enough doom and gloom. Here's how you actually get a software project right.
Start smaller than you think. Whatever you're imagining, cut it in half for version one. Launch something simple that works perfectly rather than something complex that barely works. You can always add features later. You can't unfail a launch.
Invest in the planning phase. The best money you'll spend on a software project is on requirements, wireframes, and architecture planning before any code is written. At Kentel, we spend serious time on this phase because it prevents 90% of the problems that kill projects later.
Hire for communication, not just code. Your developer should be able to explain what they're building in plain language. If they can't explain it to you, they probably don't fully understand it themselves.
Set up milestones and check ins. You should see working pieces of your product every one to two weeks. Not just status updates. Not just screenshots. Actual working features you can click through and test.
Budget for maintenance. Software is never "done." Plan for ongoing bug fixes, updates, and improvements. A project that costs $20,000 to build might need $3,000 to $5,000 per year in maintenance. That's normal. What's not normal is spending $20,000 and having a product that breaks in six months because nobody's maintaining it.
Check past work, not just portfolios. Any developer can put up a pretty portfolio site. Ask for references from actual clients. Ask to see real products they've built that are live and working today. If they can't show you anything, that's your answer.
The Real Cost of Going Cheap
Here's the math that most people skip.
Let's say a proper agency quotes you $15,000 for a project. An Upwork freelancer says $3,000. You go with Upwork.
Three months later the project is 60% done and the freelancer disappears. You find another one who needs to rebuild 40% of the work because the code quality is poor. That's another $2,500. Two months later this one delivers something that technically works but has major performance issues. You hire a third person to optimize and fix bugs. Another $2,000.
Total spent: $7,500. Time elapsed: 7 months. Product quality: mediocre at best.
Or you spend $15,000 with an agency, get the product in 8 to 10 weeks with proper testing, documentation, and a team you can call when you need changes.
The "expensive" option was actually cheaper. And you got your product 4 months faster.
What We Do Different at Kentel
We've been on both sides of this. We've cleaned up projects that other developers abandoned. We've rebuilt apps that were held together with duct tape and prayers.
That experience shapes how we work now.
Every project starts with a thorough planning phase. We don't write code until we know exactly what we're building and why. We use sprints with regular demos so you see progress in real time. We test as we go, not at the end. And we stick around after launch because software doesn't stop needing attention just because it's live.
We're not the cheapest option. We never will be. But we're the option that actually delivers what was promised.
If you've been burned before, or if you're about to start a software project and want to do it right from the beginning, let's talk.
Book a free 30 minute consultation and we'll tell you honestly whether your project makes sense, what it would realistically cost, and what timeline to expect. No sales pitch. Just straight answers.
Kentel is a custom software development company that builds web apps, mobile apps, and digital platforms for businesses that need more than what off the shelf tools can offer. Learn more at kentel.dev.