The statistics regarding startup success do not make pretty reading. Depending on the research you use, anything between 70 and 95% of startup businesses fail. No matter what way you look at it, the odds are stacked against you. This is not said to deter you from opening a new tech business. In fact, it’s quite the opposite. Avoid the common mistakes that most startup tech companies make that have been mentioned below so that you can put the odds in your favour.
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Investor / company mismatch
There is only one place to begin, and this is with an investor / company mismatch. This is almost 100 per cent guaranteed to kill off your company before it has even begun. You need to choose your investors wisely. After all, what would happen if one of your investors were unable to support the company anymore? Or, what if you received a loan from your parents but they suddenly want their money back? Recovering from such situations can be almost impossible.
If you are borrowing money from your family, make sure they understand how long it is going to take for you to pay it back. Be realistic. If you take money from a VC or Angel, you need to ensure your vision for the business is the same as your investor’s. You also need to perform diligence on your investors. Take the time to do your research and get in touch with other people that have taken money from them.
With that being said, you can leverage the expertise of an equity crowdfunding marketing agency to steer clear of investor mismatch. With their experience, they can tailor your marketing strategies and message in a way that fosters connections with investors who are genuinely interested and compatible with your company, reducing the risk of mismatched partnerships and boosting the potential for successful fundraising.
Product development errors
There are a number of common mistakes a lot of tech businesses make when developing a product. Considering your product is going to be the life of your company, it’s important to get it right. Some of the most common product development mistakes include: utilising old or unstable technology, bureaucratising development, launching too late, insufficient infrastructure monitoring, building blindly, ignoring technical debt, architecting inefficiently, not prototyping before building, and taking the waterfall approach to development. Avoid these errors, and you can make sure you are on the right track when developing your next tech product.
Employment mistakes
It can be very tempting to promise all of your close friends and family members a job. After all, your cousin is having a bad time, and your best friend would do the same for you! This is not how you run a successful business. Having the best talent in place can make or break your business, so focus on the right recruitment, rather than the convenient.
You also need to make sure that you are handling the recruitment process in the correct manner so that you do not end up on the wrong side of the law. Peninsula Group’s employment law services outline what is required from you in this respect. From rights and responsibilities to training, insurance, sickness, and equal opportunities, there is a lot to learn. Make sure you read up on employment law before starting out.
Financial errors
A lot of tech startup businesses make the mistake of having a poorly constructed financial plan or not having a financial plan at all. You need to know exactly how much money your product costs to make. You also need to know exactly how much money you spend each month. And, this is only the start of it! Full clarity regarding everything from when your business will hit cash-flow break-even to how much your business makes is a necessity. If you don’t have a solid financial plan, your business will be on rocky ground from the get-go.
Your marketing strategy isn’t hitting the mark
If you are to build a successful tech company, you need to have a good marketing plan in place. It is not enough to have a great product these days, especially in the tech industry, as it is fiercely competitive. The days of ‘build it and they will come’ are no more. Having a sales force is not enough, nor is having a website. You need to really think about how your target consumer base is going to find you. Find out what marketing channels will work for you.
Website mistakes
Having an attractive and easy-to-use website is a necessity for all businesses today. However, there are so many tech businesses that are missing the mark with their websites. One of the most common errors is ignoring your website once it is up and running. The Internet never remains stagnant; there are always new trends and technologies. Consequently, your website needs to be ever changing and dynamic if you are to keep up with the competition.
Other web design mistakes you need to avoid include not having a newsletter sign-up opportunity, skipping the call to action, having a design that is too complex, and opting for a website that looks just like your competitors’ websites. There is nothing wrong with assessing the competition for inspiration, but you should not use their website as a basis for your own. Your website needs to set you apart from other businesses in the industry. In fact, this should be the main aim of it. You need to focus on what your tech company offers that no other business does.
Company culture issues
Before you bring on your first co-founder, you need to consider your company culture. This is the essence of your business. If you have issues with regards to your company culture, you are going to have a lot of big problems as a consequence. You will have the most chance of success if you have a commitment culture whereby your team is committed to the business. This all needs to start with you.
For your culture to be ingrained successfully within the business, you need to foster this inclusive culture each and every step of the way. Every new person that you employ will either hurt your commitment culture or they will reinforce it. This further highlights why you need to employ people carefully, as mentioned in great detail above.
