# What Are Software Factories? Author: Cory McAboy Published: 2026-10-27 Source: https://rapptr.com/blog/what-are-software-factories/ Categories: Artificial Intelligence, Software engineering [Embedded media]() Software factories are the future of product development. A software factory is a development pipeline where AI agents do the work at each stage and humans stay in the loop to guide the process and protect quality. Understanding how they work is becoming crucial for any team that wants to stay competitive. ## Think of it like an assembly line A factory assembly line has many stages, and each stage has a machine that does one part of the assembly. Humans are still in the loop. They maintain the process, make tweaks over time, and make sure the product that comes off the line is right. A software factory works the same way. The machines are AI agents, and each one handles a stage of the development process. The humans are the product and engineering people who review the work, approve it, and decide what happens next. AI does the heavy lifting, and a human checks the work. ## The eight stages of a software factory A software factory moves work through eight stages, and a human signs off before anything moves forward. 1. **Requirements.** A product manager gathers what the stakeholders need and makes sure everyone is aligned. AI helps turn those conversations into clear requirements. 2. **Architecture.** An agent proposes how the system should be built to meet those requirements, and an engineer reviews the plan. 3. **Acceptance criteria.** The definition of done is written before any code exists. This gives every later stage a clear target to check against. 4. **Coding.** Agents write the code against the acceptance criteria. 5. **Testing.** AI generates and runs the tests, so coverage grows with the code instead of trailing behind it. 6. **Code review.** The work is checked against high-level standards for quality, security, and consistency before it moves on. 7. **Release.** Shipping is largely AI-driven as well, with a human approving what goes out. 8. **Monitoring.** After launch, monitoring tools catch errors and odd behavior. We typically use tools like Sentry and LogRocket to help us with this, and what they find feeds back into the requirements for the next round. The flow is a loop rather than a straight line. Monitoring surfaces what needs to change, and that becomes the next set of requirements. ## The real impact is team structure The biggest change is not the tooling. It is the shape of the team. Before, product teams were large, and different people executed different parts of this pipeline. Today, a product manager and one to two developers can run an entire product. The product manager owns the requirements and the decisions. The developers own the architecture, the reviews, and the judgment calls that agents should not make on their own. The agents handle the volume in between. ## Startups got here first We have already seen many software factories at smaller startups, usually ones with small products. They were pushed into it because they are smaller and more agile, which makes this kind of setup easier to put in place. I do not think this has fully reached larger organizations yet, but I do think it will happen eventually. This is the future of software development. If you are trying to get on board, I would do so sooner rather than later. ## How Rapptr helps At Rapptr, we build products this way. AI does the heavy lifting at each stage of the pipeline, and a human on our team checks the work before it moves forward. That gives our clients the speed of a software factory without handing their product over to unreviewed AI output. If you want help setting up a software factory for your product, [book a call with us](). You can also [watch the short video version of this post on YouTube](). ## Frequently Asked Questions **What is a software factory?** A software factory is a development pipeline where AI agents handle each stage of building a product, from requirements to monitoring. Humans stay in the loop to review the work and make decisions. **What are the stages of a software factory?** The eight stages are requirements, architecture, acceptance criteria, coding, testing, code review, release, and monitoring. Monitoring feeds back into requirements, so the process runs as a loop. **Do software factories replace developers?** No. They change what developers spend their time on. Developers own the architecture, the reviews, and the judgment calls, while agents handle the repetitive work between those checkpoints. **How big does a team need to be to run a software factory?** A product manager and one to two developers can run an entire product with a well-built software factory. **Why are startups adopting software factories first?** Startups are smaller and more agile, so it is easier for them to change how they work and set up a new pipeline. Larger organizations have more process to unwind before they can make the switch.