Debt isn’t always bad. In its early days, a startup might deliberately hardcode a feature to capture new customers because that’s its priority at the time, knowing it will later require refactoring. The danger is ignoring the balance. Just as credit card debt can spiral, unmanaged tech debt compounds — slowing releases, inflating the backlog and undermining software quality.
Different types of technical debt
In software engineering, it’s a broad term that covers multiple categories of deferred work:
- Code debt: Fragile or redundant sections of the codebase, often created by skipping tests or duplicating logic.
- Design debt: Architectural decisions that limit scalability and flexibility. An early shortcut in system design can later block major functionality.
- Process debt: Weak methodologies or poorly structured sprints that cause wasted effort and slow development cycles.
- Documentation debt: Missing or outdated documentation, forcing team members to rediscover decisions.
It’s important to distinguish debt from bad code. Bad code is negligence; debt is often an intentional, calculated decision to prioritize speed. For example, implementing a workaround to validate demand is debt, while ignoring code reviews and introducing avoidable vulnerabilities is poor engineering practice.
Causes of technical debt
Technical debt emerges from choices and pressures inside the development process:
- Shortcuts during rapid development: For example, the development team has one week to deliver a prototype for a client. Instead of building reusable modules, engineers hardcode logic. The functionality works, the client signs off, but future development cycles now carry hidden debt.
- Time to market pressure: Product managers and stakeholders often push for new features to secure customers or meet internal milestones. In these cases, teams accept debt knowingly, choosing speed (and near-term goals) over sustainability. The future costs — slower progress and mounting bug fixes — are deferred.
- Legacy code and outdated frameworks: There are also situations in which teams inherit legacy code built on frameworks that no longer scale. The original software may have been solid, but aging tech becomes technical debt that software development must address.
- Lack of automation: Without automated testing or reliable CI/CD, every release risks regression. Even small changes create new rework and inflate the amount of technical debt.
- Shifting business needs: Startups pivot. An app originally built for consumers may suddenly need enterprise-grade functionality. That shift renders old designs obsolete, creating design debt overnight.
- Documentation gaps: Documentation debt accumulates quietly. As teams grow, it’s important documentation is part of that process. When processes, guides and decision-making context remain in the heads of teammates as institutional knowledge, this makes the ramp for new hires slower. The system works, but knowledge transfer breaks down.
In all cases, the key question is whether debt is intentional and tracked or reckless and invisible.
Characteristics of technical debt
Martin Fowler’s technical debt quadrant helps teams assess the character of their technical debt. Not all technical debt is created equal:
- Reckless and deliberate: Shipping bad code with no concern for consequences, like disabling authentication to demo a feature.
- Prudent and deliberate: Making a conscious short-term trade-off, like releasing a minimal functionality to test demand.
- Reckless and inadvertent: Creating problems due to lack of skill or oversight, like junior engineers introducing unscalable patterns without review.
- Prudent and inadvertent: Doing the best with limited knowledge, like adopting a framework that later becomes unsupported.
This quadrant adds context to the debt. Prudent debt can accelerate learning and improve time to market. Reckless debt damages trust, creates security vulnerabilities and forces costly rewrites. Engineering leaders should push teams to be explicit: what type of debt are we taking on, and why?
The impact of technical debt
Technical debt behaves like financial debt because the “interest” shows up in every planning meeting. Estimates creep upward, sprints slip because engineers are untangling old code and projects stall as teams fight regressions:
- Code quality and functionality: Quick fixes create fragility, slowing new features.
- Maintainability and scalability: Makes it harder to adapt to change; cycles are wasted untangling dependencies.
- User experience: Customers feel the cost in performance issues and broken flows.
- Security and vulnerabilities: Outdated libraries and missing patches create risk.
Ultimately, unmanaged debt creates drag across software projects: What should have been a two-week feature becomes a six-week grind because you’re paying for every shortcut that came before.
Managing technical debt
When teams encounter technical debt, they have a choice: either let technical debt accumulate invisibly until it cripples velocity, or treat it as a visible, budgeted part of the development process. Here’s how to manage technical debt as a line item and avoid a blind buildup:
Treat refactoring as routine, not rescueInstead of waiting for a crisis that forces a full rewrite, strong engineering orgs build refactoring into their normal sprint cadence. A common rule of thumb is to dedicate 10–20% of each cycle to addressing debt. That might mean simplifying a complex function, paying down design debt or deleting an obsolete service.
Use automation as a safety netTechnical debt compounds fastest when quality controls are missing. Automated testing and CI/CD pipelines don’t eliminate debt, but they stop it from growing unnoticed. Each time an engineer pushes code, the system flags regressions immediately.
Keep debt in a backlog, not background noiseHigh-performing teams log debt alongside new features in their backlog. They don’t rely on tribal knowledge to remember fragile modules. Debt tickets get estimated, prioritized and scheduled.
Align the roadmap with stakeholdersOne of the hardest parts of managing technical debt isn’t technical at all — it’s social. Non-technical stakeholders want to know why “engineering keeps slowing down.” Translating the costs into clear trade-offs is crucial: “If we spend two weeks on this cleanup now, we’ll ship faster for the next six months.”
Measure the amount of debtDebt is notoriously hard to quantify, but the best development teams pick proxies they can track. Useful metrics include:
- Percentage of time spent on bug fixes versus feature work.
- Average time-to-release for new features.
- Growth of the backlog related to fragile modules.
- Velocity lost to rework or firefighting.
No metric is perfect, but together they paint a picture of how much “interest” the team is paying.
Reducing and preventing future debt
It’s just about impossible to fully eliminate debt, but effective teams prevent it from spiraling:
- Incremental repayment: Pay off debt steadily. Replacing 100 lines each week is more sustainable than a risky full rewrite.
- Iterative delivery: Deliver features quickly, but pair speed with maintainability goals. This balances short-term wins with long-term stability.
- Automation and monitoring: Use tools for static analysis, performance tracking and automated testing to flag debt early.
- Education: Teach programmers, product managers and team members to recognize debt. Debt-awareness shifts culture from firefighting to prevention.
- Optimize workflows: Adopt proven frameworks and agile methodologies. Minimize process debt by clarifying ownership, improving documentation and reducing reliance on workarounds.
Ultimately, debt management is about embedding sustainability into the development process.
Why technical debt matters
Technical debt isn’t a synonym for failure; it’s a lens for making trade-offs explicit. Just as businesses use financial leverage to grow faster than they could with cash alone, engineering teams can “leverage” technical debt to move quickly when speed is critical.
The key is balance. A team that never takes on debt risks moving too slowly to compete. A team that ignores it drowns in bad code, endless rework and mounting future costs. The job of a product manager or CTO is to make debt visible, align it with business needs and track repayment through the roadmap.
Technical debt is inevitable. The difference between thriving and collapsing teams is whether they treat it as hidden baggage or manage it as part of the software engineering lifecycle.