It’s exciting to work on something that might become the Next Big Thing—but tech skills and a novel idea aren’t enough to make a startup a success.
Roughly 90 percent of startups fail, according to some estimates. That places an enormous amount of pressure on startup founders. Not only do they need to be creative, optimistic, self-confident, and unafraid of failure—they also need considerable business smarts to carve out a financial plan and woo investors. But even that’s not quite enough: They must figure out how to balance all these technical and business skills in a way that allows their startup to navigate constant challenges.
Here’s what some industry experts told Dice about what it takes to start a tech company:
Balance Tech & Business Savvy
“To be successful early on, you need to be world class at something core, and competent at just about everything else,” said Alexander Moore, CEO of Mountain View, CA-based Baydin, creator of the Boomerang plugin for Gmail and Outlook. Even with a great idea, new technology companies often fail because they spend all of their resources on building products and never spend any time finding customers for them, he added.
In other words, a successful company can make a weaker product than the competition, but compensate for that with an incredible sales force or a brilliant marketing campaign. That savvy should extend to internal matters: Moore once saw a tech startup fail because it didn’t get its legal paperwork right, and it turned out that a disgruntled former employee owned the rights to a crucial piece of the software.
Tech entrepreneurs thrive on a challenge, and embrace the process of creating something new from scratch. Moore believes that startup founders need to recognize “problems as opportunities and get excited at the prospect of bringing that improvement into the world.” It also means exhibiting a constant curiosity about technology, as well as the industry, sector, and the competitive environment, so you can distinguish your product or service and make it something that people really want and need.
Be a Leader
“Hiring a great team and getting them engaged and passionately involved with the company’s mission is critical to a company’s early success,” said Elisa Miller-Out, chief executive of Singlebrook Technology, an Ithaca, N.Y.-based company that builds custom Web and mobile software for universities, startups and social enterprises. Be smart and selective when it comes to finding initial hires: “Hire those early team members slowly and carefully and fire them quickly if they don’t work out.” You’ll need to be the main cheerleader and chief educator when it comes to getting your employees (who are the feet and face of your organization, after all) charged up about your product or service.
Market changes, competition, or fading customer interest require product iteration—don’t get so invested in your original idea that it sinks the company. Miller-Out believes that employing lean startup methodologies makes a lot of sense, especially for tech companies. Identify your assumptions about your customer, problem, and solution early on, and test them rigorously with lots of hands-on experiments. Successful tech startups get the product or service out in front of customers early, before seeking lots of feedback, gathering data, and iterating based on what they’ve learned.
Work Hard and Work Harder
“The ‘lazy genius’ cliché of a surfer dude who builds a tech empire between slices of pizza is a common one in movies and books, but in real life there’s no gain without pain,” said Kerry Schofield, psychologist, co-founder, and chief psychometrics officer for Good.co, a San Francisco-based tech startup devoted to decoding workplace happiness. The tech industry is dynamic, and in the startup world, competition is particularly steep. “There’s the constant danger of your brilliant new idea becoming obsolete before you have a chance to get it out there,” Schofield added, “or of someone else with more resources getting in first.” Drive and motivation are probably two of the most important qualities a tech entrepreneur can have.
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