Technology has become the industry of choice for many of today’s aspiring business owners. It’s a broad, fast-growing field that attracts investors and venture capitalists, and if you succeed, the payout potential is enormous.
The allure of launching a tech startup is easy to understand, but some entrepreneurs fail to consider the unique risks they’ll face being in the competitive world of technology. It is not just a matter of starting a business, there is the added layer of complexity that your technology adds to the equation.
I am fortunate enough to deeply engage in the regional tech startup community. As a cofounder of extraSlice, a company dedicated to helping tech startups succeed, I see the challenges that they face day in and day out. Here are the success tips that I offer to overcome barriers to success.
Rapid changes in technology, more so than in any other industry, can really throw a startup off-kilter. As many tech entrepreneurs know, there’s a lot of pressure to move quickly and beat the competition to a solution.
“If a company isn’t nimble enough, or cannot execute fast enough on an idea, the window of opportunity for your product or service may very well close before it is ready for the market,” said Andrew Van Noy, CEO of e-commerce solutions provider Warp 9. “If you feel you have a solution to a problem not addressed yet in the market, don’t be fooled — it won’t be long before someone else does, too.”
But being the first doesn’t always mean you’ve won. If a product or service doesn’t yet exist, there is a steep price to pay to blaze new trails, and oftentimes, the second mover can capitalize where the first can’t. To better assess where you stand, we always advised tech startups to seek out feedback on their ideas, goals and path to success.
Be realistic about how much time, money and energy it will take to make your idea come to fruition. Talk to other founders and leaders and see how long, hard and expensive it was for them. One great way to do this is to be part of a strong community of fellow tech founders and leaders to collaborate with.
There is nothing worse than seeing entrepreneurs get their dreams and savings destroyed because they thought it would be easy. It all could have been helped with the social, technical and business support that simply being a part of a collaboratively spirited community of like-minded founders may have been able to provide.
As a new business, partnering with another company in a related field may seem like a great way to grow. But the stakes are much higher for tech startups, whose operations can easily be ruined by hitching their wagon to a passing fad.
You need to bear in mind that some technologies that are mainstream today may not even exist over the next few years. There have been many companies that have developed entire product lines and build services and solutions based completely on emerging or popular technologies.
When those fads go away or the trends shift, everything dissolves. Then what? You have to make sound and smart decisions.”
When you are building a business, it is important to focus on having guidelines in place that can help you mitigate risks. As an entrepreneur, there will always be risks. But with policies in place to guide decisions, you are making decisions with a calculation of the risk in mind and not simply throwing the dice and hoping for the best.
Hiring employees can be a nerve-wracking experience for any startup, but tech startups often hire too many people before they’re really ready. Even if you have investor money behind you, stretching your resources too thin right away can quickly become a problem.
Tech startups tend to be fast-growing and attract massive amounts of funding. They are notorious for over-scaling, or hiring too many employees prematurely. In fact according to the 2011 Startup Genome Report, 74 percent of high-growth Internet startups fail due to premature scaling. Always hire slow and fire fast.”
The other hiring issue a new tech business can face is the inability to draw top talent into a startup environment. The perceived risk may be one of the biggest stumbling blocks for you to overcome in your recruiting especially if you need the brightest and the best tech talent you can get.
One answer is a strategic partnership that can permit the type and pace of talent acquisition you need. It may be a better idea to use a technology specialty outsource service that permits you to easily manage, scale quickly and cost effectively.
It is a well-documented fact that cash flow is one of the biggest problems facing any startup. Larger tech companies in Seattle, Redmond and Bellevue can easily pay much higher salaries than a local startup can afford. Allowing your team to have freedom and creativity with their projects gives them a lot of satisfaction and can make them less likely to go to a larger company.
While tech startups may face steeper competition and a far more complex business environment than startups in other industries, as well as challenges unique to the tech sector, your level of dedication to your new business will ultimately help determine your chances of success.
The odds of any individual building a market-leading company from scratch is very small. Being delusional will not get you there. Skill, persistence, timing and a bit of luck are needed.
What can truly make the difference is being a part of a strong collaborative community of like-minded founders and having the advice, support and services you need easily available can make the difference and break down the barriers to success for your tech startup.
extraSlice: It is a community, it’s a technology platform and it’s a place for tech.
Drop by to see how we can help your tech startup succeed.
