By Oleksii Tsymbal
Since the rise of Silicon Valley, the startup boom has taken over the world, giving us Airbnb, Uber, Instagram, Twitter, Revolut and hundreds of other revolutionary companies. New names appear every year, but we also cannot ignore the fact that nine out of ten startups fail.
MobiDev has been working with a large number of startups and monitoring their further development for more than 10 years. Based on our experience, we’re going to look at the top 5 things startup founders need to remember when launching tech startups in order to succeed.
Any idea must be backed by market needs
The mismatch between the product and the current market needs is a difficult reality for thousands of startups. Entering the market without preliminary research and a business plan can turn into collapse: the product just won’t cover the users’ needs. To avoid this, any entrepreneur who embarks on this business journey should conduct market research and study the possibility of success before proceeding with the implementation of the idea.
The market research process is conventionally divided into a few phases, and to undertake them, you should implement the following tasks:
- Find your target audience and clarify your ideal customer. Know who the potential product’s user is (age, gender, occupation and others factors to be considered). This will help you take into account the needs of users when creating a product and develop an appropriate communication strategy.
- Identify your competitors. Take into account both direct and indirect competitors to find out their strengths and weaknesses. This will allow you to define features of an eye-catching product and answer the question of what can help the solution to stand out against competitors.
- Explore industry trends. Start with Google Trends and Alerts, and talk to the industry experts. You need to know your business environment like the back of your hand to make better forecasts and optimize your business ideas.
- Opt for a credible technology stack. Technical experts will tell you more about the technologies behind modern startups and which of them will best meet the requirements of your project.
This approach describes the validation of an idea, though there are other types of primary and secondary market research. For instance, you might analyze potential ways to attract investors or an investigation aimed at searching for a worthwhile idea.
Your startup needs a business plan
As Antoine de Saint-Exupéry said, a goal without a plan is just a wish. A business plan outlines the essential startup goals and a strategy consisting of steps and the whole route to be covered to reach the target. To narrow an area of the unknown and facilitate startup launch, you should prepare a well-structured document with a clear view of financing, further promotion, and customer acquisition.
An established business plan that breathes life into the project consists of the following points:
- Executive summary – the general overview of the business and niche.
- Description of the company – the detailed information about the organization and challenges it may deal with.
- Market research – the target audience and market overview with the analysis of competitive products and existing marketing tools.
- Organizational structure – the detailed review of the team along with the assignment of responsibilities.
- Financing plan and outlook – a comprehensive analysis of ways to attract investment and gain profit, supplemented by income predictions.
Mapping out a business strategy allows pitching a startup to investors and achieving other goals such as tailoring a project to existing problems, setting timelines for certain tasks, increasing the probability of success with regard to limitations and expectations, gauging the startup’s legitimacy, and assessing the startup’s feasibility.
Technology stack matters
The share of tech businesses that collapse within 5 years after launch now reaches 63%. A technology stack affects the performance, time-to-market, and further support of the software product.
A tech stack consists of programming languages, frameworks, libraries, or other tools involved in the development stage. An optimal combination of software development technologies for startups depends on the project. For instance, small web or mobile startups may rely on technologies such as JS, MySQL, Python, and Docker. Also, Flutter, which is known as a framework for cross-platform development, can become an optimal choice for B2C and C2C projects.
When choosing the tech stack, you should discuss this decision with the development team. The scale of assistance should be interrelated with the project’s type. To ensure the successful implementation of the project, your team must find ways to translate the business logic into a reliable product, and the appropriate tech stack will be crucial at this stage. Advanced technologies may reduce development and maintenance costs, providing a properly designed product.
As for the latest tendencies in software development for startups, progressive web apps (PWA) and cloud infrastructure are gaining popularity and are worth additional attention. The relevance and applicability of PWAs are explained by their suitability for early-stage startups with limited funds that aim at getting an MVP as soon as possible.
Cloud infrastructure becomes of great demand because of the flexibility, ease of scaling, and cost efficiency. By adopting the cloud-based system, startups get a secure and optimized environment for team collaboration and space for scaling as the project grows. The main reason for this is the ability to efficiently process huge amounts of data and resist the existing challenges of data management. But choosing cloud infrastructure for your project you shouldn’t forget about cloud computing security. You should use reliable encryption and a strong anti-malware program.
Make your startup attractive to investors
One of the reasons startups fail is because they run out of money. That is why it is so important to correctly present your project and make it attractive to investors. Aspiring projects require not only a relevant idea, but they need to show the startup in a favorable light and present strong arguments for investments. Raising money for startups includes the following tasks:
- Come up with a business plan and forecasting model that highlights milestones along the road.
- Share your vision. Find the reason for the project implementation that’s wider than just making money – the product should lead to at least slight improvements in the lives of people.
- Deal with intellectual property. You have to convince potential investors that as a startup founder you know how to deal with IP and protect product rights.
- Demonstrate skills and cohesion of the team (investors prefer to work with entrepreneurs who have a strong team proficient in development, business, marketing, and sales)
- Getting funding is a numbers game. Rely on numbers to prove your startup has prospects. Show investors current results, and forecasts of what exactly their money will be spent on.
There are a lot of different ways to raise money for a startup: crowdfunding, startup incubators and accelerators, angel lists or simple bank loans. But in any of these options, you have to prove that your project is worth investing in.
Great projects are powered by great teams
There are people behind every project. It is important to gather the right people around you, from the development team to partners. The wrong team is also a common cause of startup failure (14% of those polled by CBInsights said so). You can opt for an in-house or outsourced development team, consisting of technical and customer support specialists, accounting, marketing and sales managers.
Outsourcing is a great option for startups since it’s a cost-effective way to launch a software project. On the other hand, building an in-house team is a long and expensive process, but it gives you more control over the work. Regardless of what type of team you choose, a crucial task is to establish a smooth communication process that contributes to reaching an understanding inside the team and influences the project implementation process.
Summing up, mobile and web app development for startups should align with the preliminary business investigation. At the heart of any tech startup is an innovative digital solution, so be careful when choosing technologies for your project. Moreover, launching a successful project is impossible without an analysis of lessons learned by those who fail. You should avoid pitfalls along the way and be truly passionate about what you’re doing.