Technologies and innovations are an inseparable part of modern life.
The success of the leading companies inspires entrepreneurs to build a new tech company that will repeat the success of Facebook, Apple, or even Tesla.
Meanwhile, only one out of ten startups become profitable and survive. There are a number of reasons why startups fail:
- no market need
- lack of financial resources
- no strong team
- too strong competition
- pricing and cost issues
- poor product
- no business plan
- poor marketing
However, it doesn’t mean that you shouldn’t pursue the idea of creating your own company. You need to be familiar with the process of starting a tech company that will have a real chance for success.
1. Start with an MVP
In some cases, not starting a company is the best decision that you can make. You are probably surprised why, but the thing is you need to create a product that people actually need to make a success.
Some niches are so overfilled with products that there is little to no place for innovations. Such niches create a very challenging environment for tech startups and, when you think twice, it turns out that releasing a new product is not viable.
The best solution that you can make is to start with an MVP (Minimum Viable Product). MVP is the first version of your product that includes only the most basic functionality. The main task of an MVP is the validation of a business idea while mitigating the risk when dealing with huge financial investments.
Today, you can use a few MVP types as the 1st product version to receive real-user feedback. This may include the following options:
- product sketches, wireframes mockups
- demo videos
- landing pages
- crowdfunding MVP
- piecemeal MVP
- concierge MVP
- Wizard of OZ MVP
- ready software prototypes.
If you are going to build a software prototype you will need to develop a different set of features based on the product type.
Below you can find a list of MVP features for different types of software products and industries:
- eCommerce: payment gateways, advanced navigation by categories, subcategories and products, cart management, product page with product info and parameters, product reviews and rates.
- Education: course pages, scheduling, audio and video streaming, tests, progress measuring, messaging.
- Food delivery: geolocation, order management, payment gateways, cart management, restaurant profiles and menus.
- Social network: feeds, posts creation, likes and comments, friends management, content and user reporting, notifications.
- Taxi booking: pickup locations and driver tracking, request results, fare calculation, payment gateways, reviews and ratings, booking history (for client’s app) and request replies, status updates, booking history, passenger locations (for driver’s app).
- Healthcare: payment gateways, appointment scheduling, access to medical records, test reports, chats with doctors (for patient’s app) and patient management, chats with patients, chats with doctors, schedule management (for doctor’s app).
2.Create a Business Plan
Before you move on, you need to have a strict business plan to guide your actions. As you already know, the lack of such a plan is one of the main reasons why startups fail not long after they are launched. You always need to know in which direction to move and what to do in case of unexpected situations.
You can finalize your USP and strategy by employing the Business Model Canvas. This model covers the key business areas and helps to structure all the strategic information such as:
- key activities
- key resources
- key partners
- value proposition (VP)
- customer relationships
- customer segments
- channels
- cost structure
- revenue streams
Having covered and planned all these strategic points gives you a great outline of your tech startup.
3.Hire Employees
You can either build an MVP yourself or hire professionals that will help you with the task. Possible options include hiring freelancers, which might be risky, a few developers, or a dedicated development team locally or in outsourcing countries like India, the USA, or in Ukraine like the MLSDev company.
The last option offers the best ratio between quality and price. As well, this option is best in terms of reliability and technical expertise.
Usually, any software development includes the following services:
- Business analysis
- UX/UI design
- Software development (Web, iOS, Android)
- QA & testing
- Project management
On this page of the MLSDev site you can find detailed info on which services and processes are usually provided as a part of custom software development. By hiring a professional company, you’ll be able to concentrate on strategic tasks while technical professionals will work on the MVP of your product.
4. MVP Validation
You cannot just create a product. You need to create a product that will solve a particular problem that customers have and make their life easier.
After you have your MVP, it’s time to move on to its validation. You can use smoke testing, crowdfunding, paid ads, and other approaches to test your idea with real users and investors.
5.Plan for Future Growth
After successful MVP validation, you can plan for further product growth.
Careful analysis of the competition, identification of their strengths and weaknesses allows you to understand how you can improve your product, which features you can include and how you can make it different from available on the market solutions.
You also need to make the decision based on the feedback from MVP validation and feedback from real users that you gather during the testing of the first version of your product.
6. Expand Your Team
Knowing in which direction to move the product, you can estimate how much resources you’ll need in the future. The main mistake business owners have is expanding for the future and the company they want to have, not the company they have right now.
Don’t hire employees you don’t need at the moment. Hire them for the tasks you have right now and not the ones you might have in the future. This way, you’ll be able to allocate the resources wisely and not overspend resources.
If, at the first stages of product creation, you decided to work with freelancers, you might have problems with team expansion. The best way is to work with professional companies. For example, such a company as MLSDev can quickly add new professionals to the team working on your project, and you can enjoy fast growth without a long and complicated hiring process.
7. Market You Tech Company
Building a new tech company is just the beginning. You need to continuously work on marketing and making people aware of it. Today, marketing is not only about paid ads. It’s about comprehensive marketing campaigns that include influence marketing, SMM, SEO, participation in elements, content marketing, and much more.
Marketing is a powerful tool that allows to advertise new products, build communication with customers, receive feedback, and valuable insights. Marketing statistics can help you understand the main weaknesses and strengths to be used for building future strategies.
Wrapping Everything Up
Starting a tech company is no easy task. Very often, startups fail because of building a product that the market doesn’t have demand for, poor business processes organization, lack of financial resources, and other issues.
You can still try and build your tech company, especially if you have a unique product or service idea that can solve some pains of customers. Beginning with the MVP is a great strategy to utilize that allows you to start with limited resources and validate your tech startup idea quicker.
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Good article!