It is the dream of many budding entrepreneurs to build a tech startup business into a rapidly growing enterprise with the potential to become a dominant force in international markets. That is quite a dream and the success of many tech based businesses shows that it can become a reality, but how does a budding entrepreneur get started and what challenges does he or she face along the way? We look at some of these challenges in this article.
Identify a solution and develop a technical solution
If you think of the most successful tech businesses you realise that their fundamental aim is to solve a problem. The product or service that these successful companies develop exploits technology to solve the problem in as simple and straightforward way as possible.
An excellent example of this problem solving approach is the Google search engine, which as we all know, has been incredibly successful, and has formed the basis of one of the largest companies in the world. Larry Page and Sergey Brin, the founders of Google who were PhD students at the time, identified a problem that was experienced by millions of users of the fledgling internet. Websites were springing up on the web, but there were very few ways in which they could be found by the users.
Their solution was to develop a search engine that could catalogue each website using software that crawls the web, and by analysing each web page, attempt to understand how it related to a particular search query entered by a user. Larry and Sergey recognised that it wasn’t sufficient to just catalogue the web, but that users wanted the search results very quickly and, most importantly, to be relevant to what they were looking for. They used links between web pages as “relevancy votes” and thereby could rank results better than their competitors.
By finding an elegant solution to a pressing problem, the Google search engine quickly dominated the search engine market, creating a hugely profitable world wide business that continues to grow year after year.
Have a unique selling proposition (USP)
While finding a solution to a problem is a great start, it is important to know if your product or service already exists in the market place, and if it does, to understand how your offering will attract customers.
Having a unique selling proposition will differentiate your product from the competitors and is vital to the success of your enterprise. It may not just be the features and benefits of your product that betters the competition, as you may have found a technological solution that is more scaleable and cheaper than competitive products. Alternatively, enhanced customer support and warranties may form a core component of your USP.
Market your business successfully
Entrepreneurs quickly understand that having a great product backed by strong USP’s does not guarantee business success. Customers have to know about the product, understand its features and benefits and realise that it is the one for them. This is where having an effective marketing strategy will play a vital role in a tech startup business.
Digital marketing is a key component in most marketing strategies and requires a strong web presence with a conventional website. We saw that Google created a strong proposition by cataloguing websites throughout the internet, but this creates challenges for startup businesses who need users to find their websites on Google and other search engines. This is where a startup can use best SEO Bakersfield practises to ensure that their website is found in search results.
Social media marketing is also a key component of an effective marketing strategy, and can be very cost effective because if your content is good enough and attracts potential users and customers, they will spread the message for you by liking and sharing your content on their social media channels. Content optimised for mobile devices will ensure that it has a wide audience reach and a greater chance of market penetration.
Secure funding to ensure success
Developing an innovative technology product or service often requires a large amount of skilled and expensive work before the business receives any revenue. Also, once the product is ready for market release, sufficient budget must be allocated to marketing activities. This is all requires capital, and in fact if there is insufficient capital to fund the aspects of business development that we have mentioned in this article, there is a strong chance that the enterprise will fail.
There are many ways to seek business funding, but all will require evidence of a strong business plan and the demonstration of strong market awareness and business acumen by the founders of the fledgling business. This is where tech incubators could prove useful to a business startup. In exchange for equity, these incubators can supply office space, finance and business mentoring for a period of time to allow the business to develop and grow making it attractive to investors in subsequent funding rounds.
Whilst many entrepreneurs will be reluctant to hand over equity to investors, it is a fact of business life that this is an inevitable part of getting a startup business off the ground, particularly in todays competitive markets.
An often overlooked benefit of securing finance from external investors is that they will scrutinise your business plans, USP and marketing strategies and are likely to find areas of potential weakness that can be corrected before launch. Succeeding in securing finance from external investors can give the entrepreneur confidence that they are on the right track and that they are likely to have a valid business proposition strong enough for investors to risk their money in the venture.