Running a tech startup is a bit like raising children in that it isn't an exact science, each is different, and the challenges you'll face might only be relevant to you. Often it is just simply a case of going into the unknown and learning on the go.
However, there are some trusty nuggets of wisdom that all budding entrepreneurs can use (maybe not parents, though).
Hire people smarter than you
No one runs a business on their own - not a successful one, anyway - so you need to find people to take your vision and run with it. However, it isn't a case of first come first serve, and you need to be very picky with the people you bring in. You also need to be a little shrewd and hire people with potential and, in some cases, people smarter than yourself.
“Startups often try to cut costs by hiring individuals with minimal experience in their fields. This is a mistake,” says Melanie Polkosky, Ph.D., and UX Psychologist. “A startup is a very difficult place to learn one’s craft, especially when it is a very small team. Effective and satisfied startup employees have already established their core competency and are empowered to recognize internal challenges and solve them independently.”
Trulioo’s CEO and founder, Stephen Ufford, echoed Polkosky’s advice, adding to it that you should also be sure to look beyond book smarts when hiring. Consider other valuable skill sets and competencies that would be of value to your tech startup.
“It’s not just tactical book smarts that bring value to teams and organizations,” Ufford noted. “Curiosity, for example, is a sign of intellect and has been a tremendously valuable skill.”
Validate your idea on a small, core market
One of the leading reasons many startups fail is misreading market demand. In 42% of cases, startups failed simply because there was no need for the product or service it created and invested in.
Malte Scholz, CEO, and co-founder of Airfocus, recommends tech startups validate their business idea on a small target market before investing capital and making any significant hiring decisions. This can help to curb any problems with market demand down the road.
“I’ve launched several startups by now and for each one that failed, the cause was the same: I built something that I thought someone would use, instead of looking at pain points and trying to solve them.” Scholz shared. “Go where the pain points are, solve them and you’re sure to profit.”
Dmytro Okunyev, founder of Chanty, agrees that many entrepreneurs launch startups based around ideas that they think would sell. Unfortunately, that’s not always the case.
“The reason why Chanty succeeded was the fact that we tried our product with about 50 beta testers who validated the product. We wanted to find out if what we built is actually useful and whether someone would pay money for it.”
Keep the innovation to your core offer
For tech startups, the path to success is one that more often than not includes a serious amount of innovation. For many founders, it can be tempting to use the latest in tech-savvy services or spend capital on features that may not sell successfully.
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“On the technical front, don’t try to innovate too much. Keep the innovation to your core offer, and for the surrounding tools, choose reliable technologies that get you shippable products as quickly as possible.” Suggested Alexander Hudek, CTO, and co-founder at Kira Systems.
Of course, investing in unnecessary tools isn’t the only faux pas tech startups can find themselves making. While successful tech startups are known for honing in on their product, what can be dangerous for many startups is adding on additional products or features that don’t serve the customer’s needs.
“My biggest mistake was spending a third of our runway on a feature that was brilliant, that was going to revolutionize the customer's life and was entirely ignored.” Said Dean Levitt, co-founder of ThymeBase. “The mistake could have been avoided by talking to customers, building a smaller prototype and proving the need first.”
Familiarize yourself with industry trends
Trends come and go. Keeping your head down and ignoring what’s taking place in your industry can be easy. The truth is if you’re not keeping up to date on the latest industry trends, you’re likely missing out on some big opportunities.
If your customer base requests the latest in products and services but finds your business is ill-equipped to adapt and satisfy those needs, you risk not only looking out of touch but also losing the customer base you’ve already worked to create.
For Jovan Milenkovic, co-founder of KommandoTech, keeping up to date on the latest trends has helped him build his network, advertise his business and land valuable clients.
Manage your finances
While many startups grow before they even become profitable, there will plenty of money to manage - mostly someone else's. Small businesses received thousands, sometimes millions, of dollars in funding from investment firms and venture capitalists, but it isn't an endless supply. In fact, it's best to be seen as a loan, because those VC have put their money in hoping it comes back doubled or tripled. So you need to use the cash wisely.
Tech startup, - indeed all startups - need to monitor their budgets, limit their spending and save for unexpected troubles. Without an appropriate cash flow, the little money you have at the start is what will sustain your business.
Of course, solid financial backing isn’t all your tech startup needs to be successful. Create a breakdown of your startup’s financial goals and begin setting monthly, weekly and even daily financial benchmarks. These goals should be realistic but also motivate you and your team members along the way.
Build your network
Networking is key for startups. While no one looks forward to those awkward few moments between hello and the ritualistic trading of business cards, networking is a vital ongoing strategy for tech startups.
“Creating strategic partnerships within your industry not only develops your capabilities as a leader but contributes to making a bigger impact. Work together with your partners and engage with them regularly and personably,” Advises Ricardo Salgado, CEO Loadsmart. “I’ve always believed that people do business with people, not organizations. You’d be surprised to find what you can accomplish by leveraging a robust network of peers.”
Celebrate what you’ve accomplished
When was the last time you and your team took a moment to acknowledge your startup’s accomplishments?
When building a business, tech startup or not, it’s absolutely vital to celebrate what you and your team have accomplished along the way. Forgo the occasional celebration, and you risk burnout and a team full of jaded employees.
The startup journey is a stressful one. According to Eli Robinson, founder of FranFunnel, celebrations also serve as a good time to look ahead at what’s to come. It's only natural to build upon existing success, particularly during moments of celebration.
As a tech startup, you should focus on harnessing these celebrations and expanding what you've already achieved.
