Tech startups are a type of business aimed to provide technology products or services for the customers in the market and start making money by selling their own innovative ideas, products, or services. To successfully run a tech startup business, in addition, to come up with a creative idea, you need to investigate the market and consider the most important factors for growing your business gradually such as advertising and marketing, finding sponsors, or developing your team.
In this ultimate guide for tech startups, we are going to share the basic steps you need to follow for running a profitable business. Let’s get through it.
What are tech startups?
Before going further in the guide for tech startups, let’s define what a tech startup is. The first and most popular feature of a tech startup company is selling some products, ideas, or services newly created in the field of technology.
The most famous tech startup companies that all of us know their name are Google, Facebook, and Apple. In recent years, mobile app development and web-based software were founded as the most profitable tech business due to the growing demand for them on the market.
Is running a tech startup profitable?
There are so many factors influencing on Profitability of a tech startup business including:
- The demand for the newly tech idea in the market
- The way of running and advertising for the business
- The competitors raised in the market
- The quality of products or services you are offering
- The experience you are going to make for customers
The statistics about the most profitable tech startup companies all around the world revealed that the below types of startups reach the highest profitability till now:
- Life sciences and healthcare
- Artificial intelligence
Anyway, if you have just decided to start running a tech startup by following this ultimate guide, keep in mind that most successful businesses reach no profit during the first 5 years. But they just try to make money for covering their team member’s salary and the costs may arise for branding and marketing.
If you precisely follow the below steps, we are sharing with you the ultimate guide for running successful tech startups, you can expect to make money after 4 or 5 years of starting your business.
6 steps Guide to Start a Tech Company
Running a new business, especially one related to technology is not as easy as it seems at first. Although having a new idea may facilitate the process and help you to jump to the next steps sooner, the success of your business is not guaranteed just by introducing a new and even useful idea to the market.
In this ultimate guide for tech startups, we want to give you a better insight into what priorities you need to consider for running your startup business and how to manage them to reach success in 6 simple steps.
Step 1: Investigate to find an innovative idea
Having an innovative and creative idea, as we mentioned above, is the first thing you need for running a tech startup but not the least. Sometimes you come up with an interesting idea while it’s not what the market needs which means there is no hope for developing a successful business based on it.
That’s why you have to ensure your innovative idea can fulfill the requirements of a huge number of people on the market.
If you are just looking for tech startup ideas, it’s better to know which fields have the greatest target audience. As an ultimate guide for tech startups, here we introduced some useful websites that can help you to pick up your preferred field to start a tech startup business:
- Product Hunt
- The startup ideas forum on Reddit
We have also prepared a cool tech startup funding map to show you which tech startups are currently getting the most venture capital funding:
- Food tech
- Web design
- Mobile app development
- customer experience management, or CMX
- Influencer marketing
- Content automation
- Artificial intelligence
- Online sale
If you have already come up with an idea, it’s worth conducting a full survey, investigating your competitors, and checking if any other company in this niche could make a successful business or not. In this way, you can make a reasonable decision about the future of the business you are going to run.
Step 2: Specify your business model and an MVP according to the market requirements
The next step in the ultimate guide for tech startups after finding an innovative and on-demand idea is choosing a suitable business model and developing an MVP (Minimum Viable Product).
What is a business model?
A business model is about the overall value unlocked by the business and how it affects several stakeholders and choosing the best monetization strategy before going further.
The most popular business models are:
- Freemium business model
- Affiliate marketing business model
- Subscription business model
- Consulting business model
- Agency-based business model
- E-commerce marketplace business model
- The educational niche business model
- A mix of chain and franchise business model
- Blockchain-based business models
- Multi-brand business model
- Enterprise business model built on complex sales
- Distribution based business model
What is an MVP (Minimum Viable Product)?
An MVP (Minimum viable product) is a basic version of the developed product to attract early adopters and achieve product-market fit quickly. Based on the feedback gained from MVP, you can fix the bugs and introduce new features that those early adopters suggest.
Sharing the business model with a few prospects and testing it with genuine users can give you a starting point for discussions and offer clear visual points of reference.
By developing an MVP, you are now able to launch a survey to find the best marketing approaches and the advertising platforms that could be used for the advancement of your idea.
Step 3: Find sponsors or funds to validate your plan
When you developed your business model and MVP, it’s time to find sponsors to run the tech startup. There two main groups that you can negotiate with them to get funds to your projects including:
Angel Investors are the high-net-worth investors that support most newly tech startups' businesses. You can find some of them on the Conference Pulse Website and send your plan to convince them to support you.
Venture capital funding
Venture capital funding is the source behind most Series A funding that you can find a complete directory of them in Fundz and start negotiations.
You can also search for similar businesses and observe which companies sponsored them. It’s a good method for finding sponsors who are more willing to support your project.
Don’t forget that the purpose of this negotiation is to convince the sponsors that investment in your plan has a great benefit for them as well. So, focus on this target and try to show the positive aspects of your tech startup business.
Step 4: Find skilled and professional coworkers to arrange your team
To effectively run a tech startup business, you need to cooperate with a skilled and experienced team of experts.
Here are the key characteristics and skills you need to consider when choosing your team members:
- A highly developed level of emotional intelligence
- Responsible and organized
- Ability to Delegate
- Detrimental to progress.
- Feels empowered to make their own decisions.
- Skilled problem-solvers
As a manager, it’s also your task to create effective communication between your team members and guide them to accomplish their tasks. You have to arrange regular meetings to develop your team skills and train them to improve their abilities to the next level.
Step 5: Run your tech startup company based on a determined methodology
Now everything is ready to run your tech startup business. First, you need a physical address to introduce the business location. Most entrepreneurs with limited budgets set their home address as their business location, so don’t worry about investing in real estate. It is not really necessary at the beginning.
Then it’s crucial to build a professional website to impress your visitors and introduce your innovative services or products to them. Because if customers search online for a service or product in your niche, you want to guide them to your website to know that you exist.
Once your website is up and running, you need to expand your digital presence. It’s a great idea to utilize social media platforms like Facebook, Twitter, Instagram, or even Snapchat to communicate with new customers and attract them to your business.
Step 6: Advertise to attract customers and grow your business
Marketing needs to be a top priority for your startup company. To grow your tech startup business, you definitely need to consult with a marketing expert. You might have the best product or service in the world, but if nobody knows about it, then your startup can’t succeed.
If you want to make money from your tech startup business, you need to learn how to use digital marketing techniques like:
- Content marketing
- Affiliate marketing
- Email marketing
- Search engine optimization (SEO)
- Social media marketing (SMM)
- Search engine marketing (SEM)
- Pay-per-click advertising (PPC)
You can use professional digital marketing and advertising strategies to attract more customers, gain their loyalty and boost your sales.
You have to consider the improvement of the customer experience as the top priority of your business to make progress and guarantee your success.
In this ultimate guide for running profitable tech startups, we introduced the most important priorities you need to consider when starting your journey. Don’t forget the more information you have about the market and targeted audience; the more are the chances of success.
Also, do not forget to keep an eye on what your competitors are offering, and how you can make your product idea stand out by marketing and advertising. Learn more about our startup software development services.