The tech startup fever is spreading and a lot of people have caught the bug. If you look at some of the biggest companies in the world today, many of them come from the hi-tech industry. Google, Microsoft, Apple, Facebook and Amazon are just some of the businesses that provide technology-related solutions. All these companies popped up, as if from nowhere, and became major business corporations within decades.
There is a lot of charm in the tech industry because it is one of the few that offers businesses the possibility of becoming the next big thing overnight. It is no surprise that many budding entrepreneurs are attracted to the field with their own ideas of creating the next Google or Facebook. The popularity of blockchain and bitcoin is part of the same attempt to create something new and unique.
But it is not all success and fame. We should note that most new businesses in the tech industry fail within the first 3 years. You may see a huge return for some companies, but not every business is successful. Even the companies that do well don’t earn any substantial returns for the first few years. Paypal, for instance, didn’t see any profits for the first few years of its operations.
In order to be a successful firm, good planning and a strong infrastructure play important roles in the tech industry.
How to Get Started
Before you launch your tech business, you need to consider what you are planning to achieve. Starting a new business is a big step and you cannot just commit resources to it without planning and research.
One of the first things you need to consider is the product or service that your business will be offering. Are you looking to create an app that helps businesses improve their operational efficiency? Is your business going to create a product that will make it easier to educate and train people? Do you intend to build an app for entertainment such as a game or something that improves communication?
Once you have determined what you want to build, the next step is to search for competition. Is someone else already offering similar services in the market? Or has someone tried to build a product like yours and failed in the past? If there are products similar to yours already in the market, what makes yours better and unique?
There are only two ways to be successful in the IT sector. You can either build something new or build something better. Better than what is already available in the market that is.
Take the example of Facebook. It was not the first social networking platform on the internet. Before Facebook, there were MySpace, Friendster and Orkut. These social platforms were not bad but the number of users dropped while Facebook picked up.
What Facebook did differently was that they continuously updated and changed their platform to improve the user experience. They introduced new features that made it easier for friends to stay in touch and share their activities with one another even if there was no direct communication between two people.
When creating a new tech business, there are three main questions that you should ask.
- What unique value does my product or service offer to consumers? What makes it stand apart?
- How easy is it to copy the products or services that I am offering?
- How long will it take for the business to turn profitable?
Unless you are creating something completely new and unheard of, chances are that your product or service will be similar to something that is already being sold in the market. You should ask yourself why people would want to buy your product over what’s already available. Is your product better? How?
Perhaps your product is easier to use because it has a better user interface? Maybe you are providing more features and customization options? Perhaps your product can be used on multiple platforms and you have a better support team which isn’t available with existing apps?
Once you know and understand what makes your product better, it becomes easier to convince and advertise it on the market.
One way to convince people about your product without investing a lot of money is by developing a Minimum Viable Product (MVP). It is kind of like a prototype which consumers can use to get a basic idea about your product. It is quite popular in the industry right now because MVP development is inexpensive and doesn’t pose too much of a risk to businesses.
A Solid Business Plan
Successful businesses are built on strong and stable finances. While many entrepreneurs in the industry are tech-savvy, few possess the business acumen and financial skills that are needed from the head of a CEO.
A good financial roadmap will ensure your business gets off to a good start and stays on course. The business plan includes details about the sources of finance and application of funds to achieve business objectives. You should familiarize yourself with concepts like liquidity, breakeven point and return on investment ROI.
ROI means how much your investors and financiers will get for committing funds to your business. You will need to pay a higher return than the market in order to attract investors.
Liquidity is important in order to pay your short-term debts, salaries and expenses. If you tie up too much of your business capital in long-term investments like patents, R&D or fixed assets, you may find that you don’t have any money left to pay your employees which could spell disaster.
Break-even is the point where your business makes just as much money as the cost of running the business operations. Most tech companies are under the break-even point in the beginning while people adopt their service. Staying there for an extended period of time, however, would mean the end for your business enterprise.
When you are building a product or service for the tech market, there are two different approaches. You can create a fully functional, final product and launch it into the market after it has been extensively tested for quality assurance and bugs. You can also launch it as a Minimum Viable Product which has just enough features to satisfy early customers.
Image Source: https://www.slideshare.net/boagworld/building-a-user-experience-culture
Launching a product with full features allows you to make the best impression on customers. A full product can be used out of the box and usually considered a good bargain. Customers feel they are getting their money’s worth.
The downside is that full products are expensive to build. If the product fails the business can end up losing a lot more money than they invested in building the product.
On the other hand, MVP development is less expensive and businesses don’t run as big of a risk even if the product fails. Additional features can be added to the product in view of customer feedback and requirements.
But there are cons to MVP development as well. Customers might feel that they are not being given a product that satisfies their money’s worth. While you update the app with new features that significantly improve it, your initial customers may have moved on to something else and left negative reviews which deter new ones from buying your product.
Partnering with Experienced Developers
An app development firm that has the market experience in building great software can make the process of setting up a business much easier. If you work with us, you can let us worry about the application developmental process while focusing your energies on advertising and publishing the product on the market.