Establishing a technology empire, let alone a tech startup, isn’t like building a regular business. While cloud storage is feasible for many new entrepreneurs, the technology you need to cater to a large market can be costly and tedious. Serving plenty of people at a time demands iteration, a consistent change of plans, and a lot of validation.
Come up with a restaurant, and a sure-fire recipe can immediately draw a crowd. A technology startup, on the other hand, requires a search period that can last for months, if not years. Finding a repeatable and scalable business blueprint—all while consistently solving a problem and being affordable—can be difficult.
For years, several entrepreneurs have used the same methodologies, and principles needed to create a non-tech startup to grow new tech companies. But it really doesn’t work that way. Traditionally, a business leader studies the market, comes up with a product, and customers come flocking to pay for it. But this approach has proven unprofitable for a lot of technology startups. Studies dictate that more than 40% of startups don’t thrive because of their market response. In other words, their tech demand isn’t high.
When you aim to build a tech business, the study-create-sell approach doesn’t work because it skips the search period dedicated to understanding, not just your market, but also required and sustainable technology. Although some startups find that the commercial business approach works to their advantage, most tech entrepreneurs realize that multiple adjustments with their business model or products have to be made.
So if there’s anything we should learn from previous tech business, successful or otherwise, it’s that we should be prepared to shift gears when needed.
No matter how careful experts are, running a tech startup can mean having to change a product you’ve come to love and have been working on for so long. Sure, this is true for any business—but it’s even more true in the technology industry.
Here at MVP.dev, we believe in the potential of ideas and we’d like to encourage more technology-savvy entrepreneurs to explore their vision. Here’s a step by step guide on making a profitable technology company that lasts.
Identify a gap
Ideas aren’t any more than a list of answers to questions or solutions to problems. Although there are numerous business opportunities, a product will only be forecasted to do well when a need is urgent. That being the case, the first step is to determine how urgent a need is.
Do people constantly turn to an alternative solution?
In the absence of a solution, how are people affected? What are they losing? What resources are going to waste for not having bridged a certain gap yet?
Is this problem preventable?
Are groups of people being inconvenienced?
Knowing the answers to these questions helps you evaluate whether a solution is worth fighting for. It also helps you determine if much larger corporations are in the works to meet certain needs.
Consider this stage to be homework in an economics class. Knowing your figures helps set the tone before engaging with key stakeholders. By the end of this phase, you should be able to confidently write your initial version of a business proposal.
Confirm the need
No matter how inviting your ideas on paper look like, it’ll prove futile if it isn’t feasible in practice. Establishing and selling a product is a good way of finding out if your offering of a product really does solve a problem. However, this strategy is expensive, takes a while, and is the leading reason why startups cease to exist after only a while. Supplementing warranted steps before developing a product can help you save not just money, but also time, effort, and manpower.
While exploring this stage, your goal is to keep building a solution in response to a need.
Because products are made to bridge customer gaps, only the customer can ascertain if a need really is urgent or whether they’re willing to pay for the product you’re coming up with.
As such, the initial step in confirming a need is looking at customer reviews. The benefits of meeting prospects and potential customers go beyond collecting answers and ideas. Think of your interviewees as your investors, mentors, and marketers.
Essentially, these people are investors in that they can commit to helping you find the solution at the onset. They’re also mentors because they can tell you exactly what kind of product they’re looking for. Lastly, these people are marketers because they can help you sell your product.
Your goal throughout this entire period is to find consistency from the people you talk to. Do different people echo each other’s sentiments? Are they willing to pay for a proposed solution to a problem? Do they tell you outright that your product is worth it? If you answer no to any of those questions, don’t move forward yet.
Authenticate the solution
It can be tempting to jump right onto product development when we finally have our interviewee’s data and validation. But the truth is, many of the things we say we can commit to, we don’t end up doing in real life. In other words, although confirmation from your prospects is a massive deal and an important green light, it isn’t until they commit to keep using the solution that we know they’ll follow through. Many people can tell you that they’d love to see flying cars but end up avoiding to drive them in real life in fear of crashing or falling.
Here are a few things you can do to authenticate a solution:
Before building your product, design it, and have your interviewees give you feedback. Have them picture out to you what your product could look like, and let them explain why certain shades, hues, and UIs work best for them.
There a lot of reasons why entrepreneurs should begin with designing a product. Firstly, they’re a lot faster to make. Secondly, every tech project involves a design stage anyway. Involving a few of your prospects only helps you actualize the vision you have for your market. Lastly, designs are easily modifiable and don’t require all that much cash.
Once you have your designs covered, turn them into prototypes. Technology has now allowed us to quickly build apps sans all the technical trouble it usually comes with. For example, bubble.io is a no-code platform that easily lets you build whatever app you have in mind. This helps serve as a presentation instrument for your next move.