- There are different types of tech startup companies, and they all start in slightly different ways.
- Irrespective of how other founders launched their tech startups, planning, and proper execution was integral to a long lifespan.
There is one question many entrepreneurs frequently get – How do you start a new tech company with little capital?
The answer to this question is tricky and depends on the type of company you want to start. But before you get excited, it’s needful to know that the average survival rate of new businesses doesn’t exceed 10 percent. A whopping 90 percent of startups close down before they ever reach maturity.
This begs the question, why?
Again, you’ll find no simple answer to this question—the reasons for this bleak picture ranges from poor timing to flawed business models. Simply put, the pitfalls are many, and you’ll need all the knowledge and support to help you navigate the myriads of startup challenges.
Hence, this article covers the five most effective steps to launch, market, and sustain growth for your new tech company.
1. Define Your Motive
There are different types of tech startup companies, and they all start in slightly different ways. Irrespective of how other founders launched their tech startups, planning, and proper execution was integral to a long lifespan. Therefore, you need to step back, take a deep breath, and carefully think about your motives for starting a business. Times can get tough (and it usually does), and it takes commitment and dedication to keep going in the face of seemingly insuperable challenges.
Your purpose and reason for venturing into tech may be the only thing that keeps the business standing. Apart from this, you also need to think about documentation, licensing, registrations, and other requirements of your state or country. You may have to contact the best-registered office address provider in UK, Canada, or the US, depending on your location and the countries in which your business will operate.
2. Craft Your Minimum Viable Product
What will your business sell, and how will you make money? Your business’s minimum viable product is the most rudimentary version of the product you intend to market. Ideally, the MVP must have all the necessary features required to adequately address the problem your business will solve for your customers.
This version of your product is valuable because you can use it to learn a great deal about your customers, their needs, and how you can upgrade the finished product or service. Usually, you need to use innovation, engineering, and other technical aspects to craft your MVP. And this is where most new startups begin to go downhill. Hence, making it a significant milestone on the road to a successful business.
3. Prove Your MVP
As previously mentioned, your MVP is instrumental in the quest to offer your prospective customers a functional and valuable product. However, you have to validate it before investing any other resources like time and money into it.
Primary, an MVP must fulfill two objectives. It must solve a specific problem and improve the lives of customers. And these two factors play a vital role in proving the worth of your product. Some of the essential questions you want to ask yourself include:
- Can I find enough customers to pay for this product?
- Will investors readily support the development and marketing of this product?
- How long do I see myself profiting from this product?
- Can my product compete in the current and future market?
4. Analyze Your Competition
At the mention of the competition, the first instinct of most entrepreneurs is elimination. However, you don’t always have to perceive business competition negatively. Other companies within your vertical or niche will play a vital role in your growth if you can use them to your advantage.
Firstly, if you can’t find any competition for your infant tech company, you should seriously ask yourself why? That’s because a large market size with stipe competition indicates high demand. Secondly, you can analyze their strategies to learn from their mistakes, exploit their weaknesses, and emulate some of their tactics.
5. Build The Right Team
Image by StartupStockPhotos from Pixabay
One of the most overlooked prerequisites of business success is a great team. And this is perhaps the most challenging thing to get right. You’ll need first to find the right people, pay them what they’re worth, and ensure they remain productive. Three fundamental areas of your business require the right people, namely operations, marketing, and accounting.
For tech businesses, hiring is even more complicated. Apart from the scarcity of talented developers, you’ll be looking at high wages. A new company may not readily afford the best people in the tech job market. And this can make hiring very challenging for new companies.
If you’ve seriously considered starting a new tech company, there would never be a better time to launch than now. However, you’re probably aware that it’s a long and challenging road to success. With all the moving parts that need to work out before your company becomes profitable, you want to start on the right foot by getting all the paperwork right.
Office addresses and other such minor details are easy to overlook, much to the disadvantage of your new business. Consequently, these five steps sum up all the milestones you must look out for to ensure your startup becomes part of the 10 percent that survive the cut.