COMMON IT STARTUP MISTAKES
Coming up with a good idea for a tech startup is not enough to start the journey for your IT business. There are many potholes to dodge on your way to the top. This is precisely why about half of all startup companies in the United States fail in their early years of operation. Determination and optimism won’t be sufficient; you need a roadmap which lays out the ways to reach success and also warns you about the actual damages ahead.
The competition is intense, especially for tech startups and this makes it even more necessary to be aware and informed of the mistakes that could drown your IT business. For startups, about 81% survive the first year. With the odds stacked against you from the start, it’s not an easy task to create and build a tech company from the floor up and keep it successive for the number of years to come. There are many reasons why a tech business might fail, but there are also many things you can do to reduce these risks.
Here are five deadly mistakes to watch out for and how to avoid:
Investor And Company Mismatch
Securing capital from investors is one of the earliest stages of setting up your company but can also cause some difficulty. It’s vital that you find an investor that shares the same vision as you otherwise you’ll suffer from mission drift which almost always spells danger for your efforts to get your company off the ground.
Starting up a tech business is really about partnership and not about investment. Be certain that you do your research about your investors. Another right idea could be to talk to a few different persons that have received money from the particular potential investor and ask them what the turnout was like. Were they reliable and assist out when situations were sort of uncertain? These are the necessary attributes you need to be aware of in an investor.
Understand Your Finances
A financial plan must be a key part of your commercial enterprise, not an afterthought. You need to think about exactly how much money you have coming into the company and how much is going out. How much does your product cost to make? When will you hit cash-flow?
You don’t need to be a financial wizard, but understanding the basic cash-flow situation of your business means you know when a fault is brewing and how much further investment you will need.
Hiring the Wrong Team
In accord with the latest studies, 45% of new hires tend to fail within the first year of the business. Hiring the incorrect personnel can massively destroy both the dynamics of your team and stop it from working effectively. There are two crucial factors when it comes to recruiting in the technology sector: Hiring for technical knowledge and hiring for personality. Both elements are just as essential as each other, although some would argue that technical skills can be taught whereas changing someone’s attitude is significantly harder.
When you’re hiring, make sure that new hires understand your rate of innovation and buy into your vision and mission. As a startup, you’re typically a small, agile operation which means that you have the potential for a high rate of growth. In these types of situations, you need people who are willing to put a lot of effort in, especially in the earlier stages.
Not Cultivating Company Culture
Thinking about what kind of culture you want to be associated with your company is a fundamental process which is not to be taken lightly. Your company culture is a reflection of your beliefs, worldview, vision, and mission.
There are clear benefits that well-cultivated company culture can set the tone for your organisation going forward. There is also evidence to show that a good company culture has a direct impact on productivity and staff retention. Finally, building a corporate culture adds to your overall brand identity, which is essentially your reputation and how people outside of your organisation view you.
Not Telling Your Story
The act of just creating something and waiting for flocks of fervent early adopters to find you and encourage others to buy in doesn’t happen anymore. In tech especially, the mindset is that you make something and let the quality speak for itself. But if you do that, you’re very much only operating inside a small bubble. You’re not telling your story.
Having a website is mandatory, having a robust PR strategy is necessary to spread the word of what you’re working on, and operating with an audience first mindset when it comes to any external communications is vital. Be wary of giving too much information out also. A specific piece of content might make a better blog post or social media!
Verdict
Having the proper team besides you is as essential as having enough funds to run your business. If cash is your fuel, your team is the engine that gets the whole enterprise going.
Another most important lesson to take away with you is, before launching, do as much research as possible — research the market, the potential dangers, the competition and more.
