The term tech startup became popular during the dotcom era. Internet was relatively new in the market and people slowly started to realize that you do not need a huge infrastructure to startup your business. As the internet gained popularity, people started doing businesses online for companies around the world. Since most of these businesses were started by technology experts who developed programs for companies around the world, the term technology startup came into being.
Most of these companies, including Microsoft, originated from the West Coast of the United States. Primarily from the states of California and Seattle. The world-renowned ‘Silicon Valley’ which is known for some of the most successful technology startups of all time lies in this region.
Technology startups were initially focused on desktop computing. They were primarily providing technical support to small businesses, and corporations that provided products or services to consumers. Once the smartphones were launched, technology startups began developing apps as well. These apps are used all over the world by businesses and consumers alike.
How to successfully launch one of tech startups
There are thousands of aspiring individuals who want to become successful entrepreneurs. Many of them have the right skills or expertise. But when you start thinking it through, tech startups require a lot of work, countless number of sleepless hours and above all, a solid idea.
People launch innovative products and applications every day, but very few of them catch the public’s attention. The reason is very simple, these technologies do not solve real problems for people. A flash device that can wirelessly control your juicer is an innovative idea, but it is a useless one.
Even if you have a great idea that can make the world a better place to live in, you need the appropriate funds to develop and market your product. Hence, startups are not at all easy to launch. However, with perseverance and dedication technology entrepreneurs have been able to revolutionize how people live their daily lives.
Now that you have a fair idea about what is required to be a successful technology entrepreneur, you can strap your boots and prepare yourself for launching your very own technology startup. Let’s follow a step by step launching guide for tech startups:
- The first thing you need for launching a technology startup is a revolutionary idea. Your idea should have the following characteristics:
- It should target a particular set of audience.
- It should be realistic enough so that when you try to raise funding, you can sell it to potential investors.
- It should help your target audience in making their lives better than how it is now.
- You should have the right skill set and experience required to convert that idea into a useful product or service.
To start working your technology, you need to have enough funds and to pay for all expenses associated with its development. There many ways to acquire funds for your startup which include VCs or venture capitalists, Banks, Angel Investors, or Startup incubators. Here is how each of these types of investors can work with tech startups:
Venture capitalists are usually small to mid-sized corporations that value a new idea for what they think would be worth in the next few years. Based on their valuation, they either accept or reject an innovative idea. If they want to fund a project, they usually stipulate their own terms and conditions. Sometimes VC firms may require their representative to be on board for investing in the tech startups. Although they have ample resources, venture capitalists are not preferred by many entrepreneurs as they require a certain amount of control in the startup they want to invest in.
If you have a decent credit history with a detailed plan on how you want to launch, market and capitalize on your new idea, banks may be able to lend you a small business loan as well. Taking a loan from a bank increases your debt burden and may stop you from reaching out to other lending institutions if you require additional funds at a later stage.
Although angel investors are hard to find, they are the most sought-after types of investors when it comes to tech startups. An angel investor will decide to put their money based on your story and how you will run your business once the product is launched. In return, all they require is a certain portion of your revenue when your idea starts making money.
As the term suggests, business incubators provide resources and work environment required by entrepreneurs to launch their tech startups. Besides providing tangible resources, incubators help startups by working closely with them to enhance their technology and form a marketing pitch to sell their product.
To protect their interests, investors do not give you all the money at once. The funding is broken into segments or rounds. The initial fund that is given to tech startups is to start working on their idea and is called the ‘seed’ funding. Next comes the round 1 funding and so on. At every step of the way, tech startups have to prove their investors that they are on the right track and the investments they make will provide high returns.
Building your team and getting to work
Once the funds have been solicited, the next step is to build a team for the technology startup. While sourcing team members for tech startups, it is advised that you look for individuals that can work for flexible hours and understand that hours don’t count in a startup. What counts, is whether the job got done or not. Hence your team should be talented and should share the same passion to launch the new technology as you do.
Tech startups have been around for decades now. One thing common in all the successful technology startups is that they never gave up and always aimed high. The sole purpose for their innovation has always been to make the world a better place. Money eventually followed.