Looking for tech startup advice? That’s understandable. We have reached a computerised era where we find it challenging to go about our day without at least one piece of technology. It is the digital era, and tech startups are rightfully taking over the entrepreneurial world.
As a startup, there are challenges and obstacles along the way, let alone as a tech startup company. Over the last decade, the tech industry has seen rapid development resulting in a surge of tech startups entering the market. For a first-time tech entrepreneur, navigating this highly competitive industry can be a daunting task. The initial steps you take impacts whether you make it or not.
As of 2018, the tech startup industry has the highest startup business failure rate, at a scary 63% (via Embroker). Tech startups are seen to often fail as they overlook the need for a robust startup growth strategy. Our experts at 7startup have put together 7 top tips for burgeoning tech startups, specifically for tech entrepreneurs, to launch a successful startup and to flourish. And if you enjoy this post, check out – What is a Startup Advisor?
Tech Startup Advice No.1: The Right Team
Tech-driven ventures offer better pay opportunities, as they pay an average of $102,000 more than double the current U.S. average of $48,000 (via Embroker).
Hire people you think will love working in your tech startup. Attracting the right talent to join your company requires a well-defined vision, mission, and set of core values. While a tech entrepreneur might be the technical subject matter, they may well lack expertise in other areas that an expanding startup demands.
What’s the secret? Well, an early human resources (HR) hire in a tech startup is liable to contribute significantly to building a successful company. Empower your HR team to get the best people on the bus, manage people performance aligned with the company’s performance and targets, to drive the startup growth strategy.
Tech Startup Advice No.2: The Right Mindset
Building a truly global company is a lonely journey. You’re constantly learning and embracing new challenges to keep your business alive, working hard and hustling. Startup founders have to be resourceful. To bring your A-game, you must look after your health, share your time with family and friends and nurture your spirit. Startup tech founders should embrace opportunities, but should learn to say no to things that don’t add value to you their startup companies.
Tech Startup Advice No.3: The Right Product
Computer and electronics manufacturing startups have boosted by 78% from 2007 to 2016 (via Embroker). Don’t assume that you know what your audience wants. Create a minimum viable product (MVP). There’s nothing worse than spending months creating a product that no one wants. Get your product out there as quickly as possible so that you can make the necessary changes. Understanding your target market is also essential in startup fundraising through investors and venture capitalists, as they would only be interested in a product or service that adds value to the community, and has the potential to grow in the future. Here’s how you can successfully raise funds for your tech startup.
Tech Startup Advice No.4: Innovation
Innovation should be the focal point of every tech startup. Innovation attempts to predict the future by studying the market, macro, and micro trends, in order to determine how the company and its future can be aligned. By matching real-world customer demands with in-depth tech knowledge, tech startups can gain a competitive edge over big multinational businesses. Tech startups that have an innovative and disruptive startup growth strategy are much more likely to deliver rapid results.
Advice No.5: Intellectual Property
Tech entrepreneurs often fall short in protecting intangible and intellectual assets. Startups should be familiar with Intellectual Property (IP), which mainly consists of copyright, trademark, and patents, especially for protecting your own IP and respecting the IP of others.
IP lawsuits can be incredibly expensive and messy. For a first-time tech entrepreneur, their intellectual property and innovative startup idea are their most valuable asset. It’s important to engage experienced IP legal counsel to protect your company’s assets and to ensure you do not infringe on other patents. Tech startups should also ensure they have ironclad client contracts in order to protect themselves against future complications.
Advice No.6: Spend Wisely
Budgeting carefully and avoiding frivolous spending is critical for all startups. For first-time entrepreneurs, it’s imperative to stick to a fixed budget following a documented startup growth strategy. When architecting a startup growth strategy, Tech startups should prioritise spending on product development and high-quality code. The typical rule in SaaS for a growing company is to spend 40% of revenue in sales & marketing, 20% on product/R&D, and 20% on general administration. At the initial stages however, you should be spending heavily on your product.
For items such as hardware and furniture – always ask, “can we lease or rent?” Postpone any financial transactions that are of a lower priority. Once the budget has been approved, Tech startups ought to avoid changes and follow a predictable spending pattern.
Advice No.7: Fundraising
You have a product and a little traction, and now you need to grow. You’re acutely aware that a lack of funding is one of the top reasons why several startups fail. Tech entrepreneurs must be ultra-clear on their valuation, fundraising objectives, have a compelling story and growth strategy. As a startup and fundraising consultancy, we assist first-time entrepreneurs to fulfil their funding needs. We employ investor psychology and help entrepreneurs develop innovative and disruptive business models.
A study by Fundera highlights that 20% of small businesses fail in their first year, 30% in their second year, and 50% fail after five years in business.
Amit has 18 years of experience in the industry and an MBA. He supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, and fundraising. Amit & 7startup assist startups in the pre due-diligence process and help connect them to our vast network of investors. Reach out to us today and see if we’re a fit! What we know today, while always changing and evolving, is based on the past. To better understand the past, check out one of our list of Top 10 UK Startups from 2021.