Did you know that US startups have the best chances of becoming unicorns? As the odds are in your favor, this should encourage you to pursue your dream and launch your own business.
There are many factors contributing to the success of a company and many pitfalls you need to avoid.
Being a bright entrepreneur with a grand idea doesn’t mean you understand the complexities of running a business – especially if it’s your first one.
However, suppose you’re ready to create a completely original, never-seen-before technology, product, or service. In that case, you must also be prepared to see it through to the end.
Below, we’ve put together some common tech mistakes you should steer clear of when launching your startup.
Lacking financial management
A clear and outlined financial plan sets the foundation for a successful business venture. Unfortunately, many startups fall short in this department.
According to Provape, the tech industry makes up 35% of the global market, so the playfield is expansive and appealing.
Nonetheless, overhead costs, such as hiring tech professionals to develop the product, can quickly break the bank.
So, you must be mindful of expenses and how you handle the investment money if you have limited access to capital.
Feel free to leave the financial management to a good CFO who can make the initial investment go a long way. Don’t worry – you can do without the personalized T-shirts and coffee mugs in the first year!
Going solo
It takes a village to raise a child, and it will take a team of professionals and counselors to grow a business.
That means you can’t do everything yourself or be an expert in every field. So, learn to share the workload.
The biggest tech companies have started as a partnership between two people, so look for like-minded people to collaborate and share the experience.
You will need qualified counsel when discussing business ideas and strategies and solving problems as they come.
Don’t attempt to run the whole operation alone; surround yourself with competent professionals to ensure your startup beats the grim statistics.
Not doing marketing research
Marketing research is crucial before bringing a new product to the market. You need to know what is in demand and whether someone has already done the thing you’re trying to accomplish.
If the answer is yes but incredibly passionate about the said product or service, you must learn to do it differently from the competition – and better.
So, hire or outsource marketing managers to thoroughly analyze the market in your industry. You should be well-informed before making a business decision and pouring time and resources into developing a product.
Marketing problems can be fatal. So, get to know your customers, define your target audience, and scale the product to their demands.
Choosing the wrong team
There are two aspects to having problems with your team. One is the financial aspect of hiring full-time employees from the start.
Using the initial investment to provide money for salaries without having a profitable product is not very wise. And, it can sink you fast.
On the other hand, outsourcing some elements of the production process can be very cost-effective.
Subcontractors and freelancers can take some of the workloads off your shoulders and leave you with extra money to invest in things that help the company grow.
You could encounter availability problems regarding freelancers, but the cost of having expensive, ineffective full-time employees far outweighs them.
Another aspect is finding the right people, as there can be a clash between employees.
A startup relies on team cooperation, so ensure everyone is onboard with the company goals and mission – every step of the way.
Launching a subpar product design
You only get one chance to make a first impression, so make the most of it.
You can have a product with the most acceptable tech features and brilliant performances, but none of it will matter if it lacks visual appeal.
So, hire innovative designers who will make your product catch the eye of potential customers and make them want to get their hands on it ASAP.
Excellent design can even make buyers overlook certain technical deficiencies. After all, people would like to look good when using it.
User experience is also essential. Do due diligence and find out what users expect for their money’s worth. Don’t save on UX design; offer an experience that will get you to rave reviews and a growing customer base.
Skipping quality assurance
Let’s say everyone is happy with their part in the production process, and the design and tech specifications appear solid. So, you move on to promoting and marketing your product. Big mistake.
Never skip the QA process. It is necessary to test and evaluate all the system components to identify bugs and errors that can lead to an underwhelming user experience.
Take your time to put the product through all the stages of QA to identify and resolve any malfunctions. Then, ensure it meets the tech requirements and standards of tip-top customer service.
The QA process is the final step before launching a product if you strive for 5-star ratings.
Launching at the wrong time
It is easy to get carried away by the excitement of launching a new product. You get eager for the world to see this fantastic new thing you’ve built and speed up the process.
However, you can go wrong by either launching too soon or too late, which may cause irreversible damage to your business.
Launching too soon means releasing a product that has not undergone all the processes of evaluation and QA.
“Done is better than perfect.” does not apply when it comes to offering value and satisfying customer demands. If you want your brand to shine, take time polishing it!
Launching too late allows the competition to take the stage, resulting in fewer customers and a smaller market share.
Launch delays have economic consequences, as the company and investors can fail to get a return on the investments.
Finding the right moment depends on extensive preparations and making sensible business decisions. Try to be faster than the competition but ready to impress the public with an impeccable product and service.
Scaling prematurely
Scaling too early will get you in the red unless you have unlimited access to funds. You must focus all expenses on essential production stages until you get to a period of steady growth.
It can take years to achieve that stability, and any rash expansion of your business can cost you dearly. So, focus on the market fit and do things in the correct order.
Key takeaway
There are many things to consider before setting up a new company, and you should never underestimate the market’s demands.
Sure, you may be great at envisioning and creating things.
Still, visionaries are not always financially savvy, and the hardships of running a company demand extensive business knowledge, investments, and years’ worth of labor.
So, try to play your cards right and manage to avoid the most common mistakes entrepreneurs make. One day, you may just mark your first $1bn and carry the title of a ‘unicorn’ company.
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