Your tech startup checklist
There’s never been a better time to start a business than 2015. Entrepreneurship is now seen as an aspiring career path and one by one, more and more would-be entrepreneurs are taking the plunge and going at it alone. The number of entrepreneurs starting tech businesses in the UK has skyrocketed and our attempts to create the next Silicon Valley seem to be paying off. Recently we heard X Factor boss Simon Cowell, alongside Google pioneer Eric Schmidt, announce plans for ‘The F Factor’ – the search for the next UK tech sensation. It was only a matter of time before Cowell got on board and found a way to take advantage of the phenomena and I’m expecting to see a continued surge of tech savvy founders unveiled.
I’m not exactly a tech whiz but that doesn’t mean I can’t appreciate the impact the sector has had on our entrepreneurial environment and our lives in general. Like most men, I love a gadget and anything that makes my life a little easier is always of interest.
Now I may not know everything about tech (although I did just buy an Apple watch…) but I do know a thing or two about starting a business and I’ve met a lot of tech startups through my role as former Chairman of Start Up Loans who’ve shared their own entrepreneurial journeys.
Starting a business is one of the hardest things you’ll ever do. But it’s also one of the most rewarding experiences you’ll have. Unfortunately, there is no ‘ultimate guide’ to starting and growing a business and every journey is personal but there are a few things you can do to make the process slightly less stressful.
Firstly, and this may sound obvious, you need to be willing to dedicate A LOT of time to creating and developing your product. It took me 10 years to build my businesses; one year figuring out what I wanted to do, two years figuring out how to scale it and seven years repeating that cycle. During this time I learnt the most important lesson of my career – I learnt to accept failure. As a startup, you need to give yourself space to fail because it’s inevitably going to happen at some stage. This isn’t me being a pessimist, the most successful entrepreneurs in the world have one thing in common: they all failed and learnt from their mistakes. Now you know this, you can make it part of your plans – you can build a process and a team that will minimise the impact of failure to your business and more importantly, ensure that you don’t repeat the same mistake again.
The advantage of going tech is that you have the ability to test your product endlessly and continuously improve it. Every tech entrepreneur I’ve spoken to suggests building your minimum viable product (MVP) before building on your vision. Start your development process by picking the features which add the most value, not just the ones you want to include.
Do your research
You can never do enough research, I learnt that the hard way when I was first starting up. Information is key to success and it’s also the best way to nail your route to market, competitor analysis and establish your USP and target audience.
Ask yourself, who are your competitors? How successful are they? The more you know, the better position you’ll be in. Understanding what your competitors do well will give you a good idea about what your customers are looking for in a product and knowing what they don’t do well means you can learn from their mistakes and penetrate the market from every angle.
Lots of aspiring entrepreneurs I meet are obsessed with inventing something new when in reality, hardly anything is truly unique these days – especially in the tech sector. The majority of ideas have been launched in some way before so instead of putting all your energies into creating something new, focus on making something better.
Your development process will be very long and you’ll end up swapping and changing things depending on customer feedback. The important thing to remember is don’t be scared of scrapping features that aren’t needed – there’s no room for precious attachments here!
Think about finance and mentorship
Many entrepreneurs who are just starting out have no option but to choose a ‘bootstrap’ route to finance. Although this requires utilising your personal savings, sometimes bootstrap funding can be beneficial as it means you do not lose control of any decisions made about the business and you can focus on execution and building traction without outside interference. It can however mean more risk for you as an entrepreneur and it could cause a decrease in growth rate.
Depending on your business goals, there are many different funding options to think about and it can be really tough to understand which avenue suits you best. Alternative funding has been huge this year as more and more people are looking to raise funds away from the banks. Luckily for you, tech startups are hot tickets for potential investors and if you have a good idea, a good business plan and can illustrate potential growth, you could be in a good position to find yourself a backer.
I suggest you do your research when it comes to applying for funding and figure out what you want from the process. If it’s purely capital you’re after, you could try crowdfunding – if you have a product people really believe in, this can be a great way to raise the funds needed to get to the next step. I’ve met a lot of entrepreneurs who have had great experiences after choosing this route – I think the sense of support you can gain from a large community through crowdfunding is also a huge benefit.
However, if you’d like a bit of expert advice on the side of your capital, angel investment could be the one for you. Having access to an expert in your field is often priceless because they’ve already been there, done that. They’re your crutch.
Mentorship is a significant checklist item to think about. Think of them as your fountain of knowledge and make the most of everything they have to offer – they have the potential to act as a great channel to potential customers and talent.
I’ve always said that business success is built by people, not products or services and surrounding yourself with the best people will be the best investment you ever make.
Starting a business isn’t easy – I’ll let you in on that secret. It will be hard and you may want to give up at some point. When it comes to this, think about why you started the journey in the first place and how much it’ll all be worth it in the end.