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How to Build a Profitable Technology Startup (Part 2)


(Read part 1 here.)

Sell a mafia offer to your involved prospects. At this point, many of your interviewees will have been onboard your project for a while now. If the need truly is urgent, and if they truly believe in the tech project they’ve helped you come up with, then there should be very little reason for them not to pay for your product.

But brace yourself. During this stage, it will be common for many of them to decline. Realistically, you can refer to this stage as the moment of truth. You will find out if your interviewees really are valuable prospects. Don’t lose hope! In fact, one business writer mentioned that, after having gone through the same experiment, only three out of more than 400 interviewees pledged to pay for his product. Had he gone directly to selling his tech product to thousands of people at once, he would’ve lost an insane amount of funding.

In most cases, especially in industries where your item has several substitute options, future customers will want a functional product before having to pay for it. Here’s what you can do: the quickest and most cost-effective way to cater to your customers is by making designs and turning them into useful products by resorting to a non-scalable solution delivery mechanism.

This means you’ll have to turn to manual work and existing tools to complete the job. Take Airbnb, for instance. Before the founders launched their now billion-dollar app and idea, they used their own mattresses and apartments to cater to their guests.

Even when they’ve validated the need tenfold, they continued connecting hosts with guests before establishing a money-making, guest-and-host-connecting app. DoorDash, a food delivery tech company, used a similar business mechanism during their earlier years as a startup, too.

The validation process can take a while, but when you’re bent on launching a profitable tech problem-solver, it’ll be worth it. Be wise with your resources, and most of all, be patient.

Create foundational features

Once you’ve finalized your solution and validated your need, it’s time to pour your efforts in building your app. As written prior, one of the biggest advantages of testing the solution validity with product designs is being able to present an interactive version of your idea before it’s even made.

This is crucial in every development stage, as your concept’s aesthetics and features should have been adjusted based on all the data and feedback you’ve gotten from your interviewees. One of the more expensive mistakes an entrepreneur can make during this phase is to build a premium product before validating its foundational features quantitatively. Remember that foundational features are vital in delivering the solution’s quality proposition. Simply put, without these features, users will not be able to get the job done.

If users don’t find meaningful or exclusive value in your foundational features, chances are all other supplemental features won’t be very impactful. That said, it’s safer and smarter to begin by building and rebuilding your product’s foundational features. If you don’t have the technical skills to back you up, don’t worry. Companies like MVP.dev have all the complementary skills you’ll need and more. And with bubble.io, coming up with an app becomes even easier for you.

Commodifying ideas and turning them into apps isn’t just like any other business venture. Prioritize working with IT experts who have startups of their own. The more exposed you are with people whose vision thrives in the digital space, the easier it will be to express your ideas and commodify them.

Try out risky assumptions

If the first few stages sought how to bridge a solution to a problem, this phase zeros in on how your solution-to-problem equation meshes perfectly. In other words, this stage should evaluate how effective your product solves your given problem. Here, you’ll evaluate what your customers are saying about your foundational features, except this time, you’ll need to pay more attention to key metrics such as user growth, churn rate, and other similar politics that help spell startup success.

More importantly, keep gathering insights from what your customers are saying. You’ll need all the insights you can get to keep connecting dots. The more gaps you’re able to fill, the clearer your final product will look like, and the readier you’ll be to move forward to the next steps.

Prioritize customer acquisition and a scalable business model

This part is more of a marketing strategy than a technical one, but it’s just as vital when you want to make a sustainable profit. Business leaders, new or seasoned, are encouraged to start growing an audience as early as possible. Building a network, let alone an audience, even before a problem is identified, affords you insight as to what people think about certain things on the surface level. This then affords you the chance to easily explore possible solutions to problems you’ll soon identify.

Being able to connect with people from the market you wish to penetrate isn’t just necessary when you’re an entrepreneur—it should be instinctive. App ideas and business concepts are only ever great if your target market agrees with you. If not, then you don’t have anything to sell.

There are dozens of platforms and channels you can invest in to pool and grow an audience. From producing a podcast to writing articles, the list is extensive. For example, Buffer, a social media management company, invested in writing blogs as a way to educate and connect to their customers, even before they launched their product.

Industry trends and your target market should dictate which acquisition channel is best for you. Work on your product from behind-the-scenes but don’t neglect the required show business altogether. In the tech industry, people rarely make money out of things no one knows about. Find out what kind of ads suit your product and determine what kind of content you should invest in.

Lastly, determine if your business model is scalable. Sometimes, we invest so much time and effort into improving our products that we fail to evaluate our business models. If the cost of customer acquisition is costlier than expected returns, you’re only going to keep losing money.

Once you’re able to get things rolling, the next thing you should focus on is to actively improve your product. The more convenient and functional your product is, the higher your chances of obtaining customer loyalty.

Remember, you’re not obliged to do these things alone. Working mostly by yourself can only take you far. If you have other questions about technology, ideation, or app development, we can help you!

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