What Is Technical Debt? A Pragmatic Guide for Startup Teams
When you hear the term “technical debt” or “tech debt” what comes to mind? Is it a necessary evil? Or a sign of poor planning? Maybe you think of it as a shortcut that will come back to haunt you later. The right answer, as with a lot of things in software engineering, is: it depends.
Many teams treat tech debt like a dirty word. But the truth is: it’s a trade-off — and sometimes, it’s the right one. This post explains what tech debt really is, why it exists, and how to distinguish between strategic debt and irresponsible shortcuts.
TL;DR
- Tech debt is a trade-off — not always a bad one.
- There are three main types: intentional, unintentional, and abandoned.
- It’s okay to incur debt strategically (e.g. MVPs, deadlines), but risky if unmanaged.
- Make debt visible, review it regularly, and build a culture of ownership.
- Use a simple 4-question framework to guide decisions.
What is technical debt?
Ward Cunningham is one of the authors of the Agile Manifesto. He coined the term “technical debt” and described it like this
Shipping first-time code is like going into debt. A little debt speeds development so long as it is paid back promptly with refactoring. The danger occurs when the debt is not repaid.
The key here is that tech debt is a trade-off. It’s not inherently bad or good. It’s a decision to prioritize short-term speed over long-term maintainability. But if left unpaid, that debt compounds — and costs more to fix later. I’d argue that if you don’t have ANY tech debt, you are probably not moving fast enough. The key is to manage that debt, not eliminate it entirely. As a startup you need to be able to move fast, whether that’s to be able to prove market viability or be first to market.
Types of technical debt
There are different kinds of technical debt that exist, and understanding these distinctions can help you make better decisions about when to incur it and how to manage it.
Intentional debt
Intentional debt is a strategic decision. One made consciously typically in order to make progress. Remember the saying that perfection is the enemy of progress? This is where that applies. It’s about making a trade-off to ship something quickly, with the plan to revisit and improve it later. For example, perhaps you are working on some new functionality and make some decisions that you know may not be performant at scale. However you also know that solving that now is not a trivial task. There’s no sense in putting a lot of effort into trying to make something highly performant if you aren’t even sure it will be used. You might also be guessing how it might be used. Beware of falling into the trap of over engineering something early on. Make note of the trade-offs and move on.
Unintentional debt
Sometimes we introduce technical debt unintentionally. This can happen when we don’t fully understand the requirements, or when the requirements change mid-development. It can also occur due to poor design decisions or lack of knowledge about best practices. Unintentional debt is often harder to manage because it’s not a conscious choice, and it can lead to unexpected complexity in the codebase.
One trap I often see early-stage teams fall into is chasing endless configurability. At first, it seems like a smart move — of course customers will want to tweak every knob and dial, right? But what could have been a simple feature quickly becomes a complex one. A task that should take a day or two suddenly drags on for weeks. And it doesn’t stop there. Now you have to maintain those configuration options indefinitely — even if most of them go unused. The result? A bloated, harder-to-understand codebase, and more friction every time you build something new. Suddenly, every feature comes with the question: “Should this be configurable too?”
Abandoned debt
Abandoned technical debt appears when parts of the codebase are forgotten, outdated, or lack documentation. This can happen when a feature is no longer used, or when the original developer leaves the team. Abandoned debt is particularly dangerous because it’s invisible — you may not even realize it exists until it causes a problem down the line.
The most common example of this I see is with feature flags. Feature flags are a great way to ship code quickly and test new features or provide a mechanism to iterate on work without long running feature branches. When they can become painful though is leaving them around your codebase after a feature has either been fully shipped or abandoned. Now your codebase is littered with branches controlled by feature flags. New engineers join the team and don’t understand what feature flags are needed or not. Which branches need to actually be supported? Do I put my new feature in branch A or branch B?
When It’s Okay to Incur Debt
So if technical debt is a trade-off, when is it okay to incur it? Here are some valid scenarios:
MVP / Speed to Market
When you need to get a minimum viable product (MVP) out quickly to test market fit or gather user feedback. Your initial concern is to focus on delivering value, not perfection. A common example here is worrying a bit too much about refactoring code that is not yet being used by customers. If you are building a new feature that is not yet in production, it’s okay to incur some debt to get it out the door quickly. You can always refactor later once you have more information about how it will be used. This is usually a case of premature optimization as it is.
Fixed deadlines or regulatory windows
When you have a hard deadline to meet, such as a product launch or regulatory compliance window. In these cases, you may need to prioritize speed over long-term maintainability. For example, if a customer needs reporting to go live, you might start by running the report manually to meet the deadline — with a plan to automate it later. This allows the business to move forward, getting the new client onboard with a known task to revisit the process for reporting as a fast-follow.
Exploring unknowns
When you’re in a phase of rapid iteration and experimentation, such as during early-stage product development. Here, the focus is on learning and adapting quickly, rather than building a perfect solution. One of my favorite quotes is: “You don’t refactor a prototype” — and that’s okay. The key is to flag it as debt early and document why the trade-off was made.
For instance, if you’re integrating with a new external API. You may not know all the edge cases or how it will be used, so you might take some shortcuts to get it working quickly. This is okay as long as you have a plan to revisit it later, making notes along the way of the trade-offs you made and why. This way, when you do revisit it, you have context on the decisions that were made.
When Tech Debt Becomes Dangerous
Even when tech debt is incurred intentionally, it can become dangerous if not managed properly. Here are some signs that your tech debt is becoming a problem:
No plan to revisit
So you’ve balanced some trade-offs and incurred some debt, but 6 months later you still haven’t revisited it. This is a red flag. If you don’t have a plan to pay back the debt, it will only grow over time and become harder to manage. This can come in many forms. Team members may leave. New members may not have context on why decisions were made. The codebase may change in ways that make the debt harder to pay back.
No tests
I personally don’t believe skipping tests is ever a good idea nor an acceptable form of tech debt. If you find yourself skipping tests to ship faster, that’s a sign of irresponsible debt. Tests are the safety net that allows you to make changes confidently. Without them, you risk introducing bugs and making the debt even harder to manage. With AI-powered coding tools like Cursor and Claude, there’s less of an excuse than ever for skipping tests. It’s never been easier to get solid coverage quickly. I’m not saying you need to strive for 100% code coverage of all branches of your software, but you should avoid skipping tests.
Scaling on top of unstable foundations
If you made some conscious trade-offs to ship quickly, but now you’re trying to scale on top of an unstable foundation, that’s a sign of irresponsible debt. You need to have a solid foundation to build on, otherwise you risk creating more problems down the line. I’ve seen it time and time again where teams know they’ve incurred some technical debt and all agree that “we’ll tackle it in the future” only to move on to the next big product feature. The problem is that the debt never gets paid back, and the team ends up scaling on top of a shaky foundation. This can lead to performance issues, bugs, and ultimately a loss of trust from users.
Making Tech Debt Transparent and Manageable
One of the best ways to manage technical debt is to make it visible and transparent. There are various ways of doing this such as:
Tooling
One of my favorite ways to make sure that technical debt is visible is to use tooling. This can include things like tagging issues in your issue tracker, creating tickets specifically for tech debt, or using dashboards to track debt over time. The key is to make sure that everyone on the team can see the debt and understand its impact.
Debt Reviews
Logging technical debt in your issue tracker is only part of the solution. You also need to make sure that it’s reviewed regularly. This can be done during sprint planning, iteration planning or retrospectives, where you can discuss the debt and prioritize it alongside new features. This helps ensure that debt doesn’t get forgotten and is actively managed.
Tackling technical debt as part of the development cycle
One of my favorite ways to manage technical debt is to identify how you might be able to tackle it as part of product development. This can include things like refactoring code as part of a new feature, or addressing technical debt as part of a bug fix. The key is to make sure that technical debt is not treated as an afterthought, but rather as an integral part of the development process.
Tech Debt Rotation
Another technique I’ve seen work well is to rotate team members through a “tech debt” role. This means that each team member takes turns focusing on addressing technical debt for a period of time, such as a week or two. This helps ensure that everyone on the team is aware of the debt and has a chance to contribute to addressing it. This can also tie in well if you have an on-call rotation. The person who is on-call can split their time between handling any issues that arise as well as tackling known technical debt.
Define thresholds
Decide as a team when technical debt should block new features. This could be a percentage of the codebase, a number of open debt tickets, or even qualitative signals like “this module is slowing us down. The key is to have a clear threshold that everyone agrees on, so that you can avoid accumulating too much debt and ensure that it’s actively managed. Ideally, tech debt isn’t a blocker — it’s something you chip away at as part of your normal product cycle.
Encourage a culture of ownership
Finally, encouraging a culture of ownership can help ensure that technical debt is actively managed. This means that everyone on the team takes responsibility for managing debt, rather than leaving it to a specific person or team. It also means that team members are encouraged to speak up when they see debt that needs to be addressed, and to take action to address it.
A Simple Decision Framework for Tech Debt
Ask your team:
- Is this debt intentional or accidental?
- Is there a plan to address it?
- What’s the cost of repaying later vs. the benefit of shipping now?
- How will we track and communicate it?
Tech Debt as a Strategic Lever
Technical debt is not a dirty word. It’s a strategic lever that can help you move faster and deliver value to your users. The key is to manage it effectively, rather than ignoring it or treating it as an afterthought.
If your team is struggling to balance speed with stability, let’s talk. I help startups ship quickly and build sustainably.