When it comes to business startups, it’s prudent to mention from the beginning that there’s no sure way to guarantee a successful establishment. You may have come across the frequently quoted statistic that 90% of all startup businesses fail. That means only one out of 10 startups succeed. Although it’s correct to say that startups are businesses, it’s best to keep in mind that they operate differently from traditional fully-fledged businesses.
When starting a successful tech company, you must consider the myriad of challenges that arise due to the technicalities that define a tech company. To put things into context, a startup tech company first seeks to find its space within a competitive, established market, given that hundreds are started every day. Secondly, with the flutters caused by the COVID-19 pandemic, major dents in both funding and demand for tech startups are still being felt. According to Startup Genome, funding for startups has gone down by 20% globally, and by as much as 50% in some areas. Meanwhile, 40% or more startups witnessed a decline in revenue.
While this may sound pretty grim, the COVID-19 fallout may have reconfigured and even increased opportunities for innovative tech businesses to take off, considering the lifestyle change it forced on human social behavior. Workspace technology and how many people have embraced working online and from home is a case in point. Another plus is the large portion of workers who lost their jobs and are currently searching for new opportunities. Also, investors who lost business or slowed down their operations and revenue are looking to find breakthrough startups that may restore them to their original turnovers. Armed with this background knowledge, it’s possible to objectively explain the fundamentals of how to start a successful tech company. Here are several you should be aware of.
1. Build a Product
Building a product is the foundational step toward understanding how to start a successful tech company. To stand a chance in the competitive tech business world, focus on developing a unique and relevant product that can offer real-time solutions to contemporary day-to-day challenges. Avoid the temptation to jump on fads that make up the clamor of overnight success stories. Most people fail because they take a nose dive into entrepreneurship without a well-thought-out idea or plan. They start without thinking through a solution that can meet the specific demands of the market. Hence, to start a successful tech company and realize profits, you need the right set of features to solve the problems of a target user at a price the market can afford.
The secret of the best-performing tech startups is that they grow iteratively – following feedback from the users, and subsequently improving their product to work better, simply, and at the most affordable rates. In his book, The Lean Startup, Erick Ries outlines a radical guide that encourages getting a low-cost technology business off the ground with as little starting capital as possible. According to Ries, in the Lean Startup methodology, the product or tech is far more important than the structure that supports it. After all, the product is what brings in the profits. Ries guide guarantees this as the strategy for an early prototype that can be presented to potential investors and consumers.
2. Know Your Target Clients
After developing a brilliant product or idea, the next step is to undertake extensive planning and market research. Hastily launching a magnificent product is a one-way ticket to failure. To start a successful tech company, get to know the market well enough and understand the demography of the target users. The goal of planning and market research is to justify the business idea while considering strategy, target client, product, and marketing modalities, among other fundamental aspects of commerce. The catch here is that, for a tech startup to be truly market-driven, it must observe, involve, and be consistently sensitive to market dynamics. In a nutshell, knowing who to sell the product to is as important as the product itself. Getting a faithful consumer base of early users to provide feedback can’t happen with the wrong segment, and without these pioneer users, it’s hard to grow a tech company from its infancy. Establishing your target market is an important part of how to start a successful tech company.
3. Build a Technical Sales Team
Technological innovations being what they are (technical), it’s crucial to build or hire a technical sales team. Putting in place an efficient, albeit lean, team to implement the product in line with its true vision is imperative in starting a successful tech company. Being a startup tech company, priority must also be placed upon aggressive sales personnel to ensure revenue, which, in turn, supports the growth of the company. Due to tight budgets and market competitiveness, plan to work with professionals who can focus on the company’s unique product, market niche, and client solutions. The growth of the tech company is supported greatly by a professional and technical team. Thus, the team should be motivated and well-updated through capacity and team-building activities, and conducive working conditions. Building a technical sales team is also an important aspect of how to start a successful tech company.
4. Name Your Startup and Understand the Legalities
It may seem straightforward, but when it comes to how to start a successful tech company, the right name offers better chances of appealing to prospective users. The name you choose should resonate with your tech company’s idea and product. Try to keep it as simple as possible, and relatable. On legalities, you need to understand the basics of general business law concerning tech companies, right from the inception stage. Neglecting this crucial part can lead to legal mishaps that’ll see the business going south at the slightest hint of trouble. It’s therefore important to consult with a small business attorney to gain clarification as to the legal requirements. This will go a long way in helping you start a successful tech company.
5. Create a Concrete Business Plan
A well-thought-out business plan has an indispensable function in how to start a successful tech company. It’s in your best interest to formulate a rock-solid business plan and make sure it includes all the fundamental aspects of the startup, such as business strategies, goals, details about profit and loss, capital finances, marketing plan, and how you envision achieving them. You can also define the plans for commercial insurance and a commercial property for rent. You can also determine the best commercial electrical services and commercial locksmith services and other details relevant to the tech company. Putting together a strong business plan provides a detailed road map to navigate through the launch and progress of your budding company.
6. Raise Capital
Even the most clever, efficient, and cheapest startup idea requires funding to get off the ground. Think of ingenious ways of generating capital that you should formulate and secure as early as possible. There are several strategies you can employ to raise the required capital. Professionals advise that when it comes to how to start a successful tech company, one of the most burden-free ways is to pitch to investors, especially when considering commercial real estate options. These may include venture capitalists and/or angel investors, or business loan providers. It helps to first understand what the investors are looking for from your pitch and then demonstrate what they’re bound to earn in return for their capital investment. This, however, is not an entirely sustainable method as startups may take a while to sustain themselves.
Fred Wilson, a venture capitalist, recommends utilizing what he calls the ‘cash forecasting model’ that ensures that the entrepreneur can shift priorities and operate expediently wherever there’s a shift in revenue. Although business loans may be hard to secure, some flexible banks and funding operatives may lend you capital based on the soundness of your idea. Another innovative method is creating side products like online content, social media videos, or virtual events, around the core product and selling them digitally on platforms such as Tiktok or YouTube.
7. Branding, Website, and Launch
Branding a tech startup primarily involves establishing a distinct identity that guides its voice, image, and personality, which distinguishes it from the rest and is aimed at making it immediately recognizable by the target users. Create a level of self-reflection as a guiding standard. This means imagining yourself as the client, then working backward. Once you’ve visualized the big picture, crystallize every component of your great dream into passion, style, and mission. Every aspect of your startup company, from the name, logo, and domain should be a reflection of the company’s identity. Apart from helping you stand out from the rest, it keeps your ideas grounded in what you’re seeking to achieve. You may want to consider hiring the services of a marketing agency to help you with this.
The fact that we currently live in a global village means you need to create and maintain a proper website. A website is a crucial component as it’s an accessible platform that helps the tech startup stay active. It also eases interactions with the networks you’re continuing to build. Nothing catapults your startup tech business more than a well-organized, focused, and colorful launch. Organize launch campaigns that’ll leave an impact on your clientele, and attract the targeted attention to achieve a vibrant start and demonstrate business virility.
8. Stay Updated With Current Events
In our contemporary world of millennials, social media, and its netizens, you can gain powerful influence through digital presence. Staying conversant and abreast with the newest trends will ensure that you not only find ways to improve your tech product but also find creative ways to market it. It’s prudent to ensure a strong and consistent presence on all social media platforms while remaining vigilant enough not to miss new trends. You should also align your product with the strengths of your tech business and seek to cater to the needs of your base clientele. In this quest, social media will play an important role in how to start a successful tech company.
Networking is an important part of how to start a successful tech company. It’s been observed that the more you connect with diverse groups of people, the more likely you will meet prodigies who’ll prove immensely useful to your nascent tech company. Make a deliberate effort to connect with people everywhere and at any time. Attend conferences and programs that add value to your tech business. At such places, you’re likely to meet a host of gurus from other startups, entrepreneurs, seasoned tech CEOs, and renowned industry consultants. It’s important to ask yourself strategic questions like; who is going to market and promote my product? Who can connect me with investors, marketers, and influencers? And so on. Attend events at other companies, on campus, online, and even at religious meetings. You never know where you can meet your ultimate game-changer.
The question of how to start a tech company need not be a matter of life and death. Granted, failure isn’t a good outcome in any business. However, don’t be afraid of failing. On the flip side, failure can be a blessing in disguise, and a great source of inspiration, feedback, and learning. Keep in mind that a startup tech company mostly ventures in completely new trajectories and unforeseen hiccups may translate into opportunities to make improvements to your products and services, or adopt cutting-edge workplace technology.
One thing you should know about starting a successful startup tech company is that the business environment is ever-dynamic, and only those with passion and determination often make it. Successfully growing a tech business may not be easy, but the above strategies for how to start a successful tech company should place you on the right path. With focus, undeterred vision, good partnership, the right action plan, and a great tech team, a tech business is well-positioned to speed ahead in today’s competitive market space. The process leading to the establishment of a successful tech company may take time, because, unlike a traditional business that aims to be profitable on day one, startups don’t expect immediate returns. Therefore, start lean and slow while focusing on incremental growth.