How To Create Your Own Technology Startup From Scratch In 10 Easy Steps
Everyone has an idea to start a technology company, but few make it happen. The reason for this is that to build a tech start-up you need data, you need a plan, you need to work with other people, and you need to find a business model that makes sense. You also need funding. To do all of this, you’ll need someone who has the right connections and can help you get started.
Entrepreneurship has grown a lot in recent years, being an entrepreneur has become an option for self-employment or giving free rein to a business idea with future possibilities. The entrepreneurship model via startup is one of the best-known and most demanded. Many of them manage to survive and even be sold, it is also true that around 50% fail and disappear.
The success of a startup is based, above all, on strategy and prior planning. Let’s see some tips to create a startup from scratch and minimize the main failures that can cause complex consequences for its continuity.
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What is a startup?
A startup is a youthful organization that is simply starting to create. They are scalable businesses with great growth potential. These new companies are usually small and initially, financed and developed by a founder or a small group of them.
Another great characteristic of startups is that they are usually closely related to the technology sector, with new technologies and the internet being the natural setting to grow and seek business opportunities and even financing.
How to create a startup?
1. Define the business idea
Without a good idea, it is very difficult to build a startup or any type of business. Defining the business idea is the main step towards success, as well as one of the most difficult tasks to develop.
Converting an idea into a business concept requires thinking about issues such as the sales channel of the product or service and who will buy it, the benefits of the product or service, etc…
The entrepreneur will have to have an answer to several questions, including the following:
- What is the product or service?
- How is it different from other products?
- Who will buy the product or service?
- Why are they going to buy the product or service?
- Who are the competitors?
The entrepreneur must be able to accurately and clearly describe the essence of the business to have maximum security to continue with the next steps of creating the startup and not die trying.
2. Carry out a market study
We have the idea but alone it will not develop or grow. Once the business model has been identified and defined with its characteristics and qualities, there is no other option but to carry out a market study.
One of the main keys to a good business plan is the pertinent market study. A market analysis is a quantitative and qualitative evaluation of the same, where the size of the market is analyzed both in volume and value, the different customer segments and purchasing patterns, the competition and other influential actors in it.
At the end of a deep market study, we will know what we have and what we are facing, recognise our values, and strengths and be clear about our objective.
3. Choose the Insurance
As technology evolves, so do the needs of companies. New technologies come along with a plethora of new user interfaces, like eCommerce (online shopping), mobile commerce and other kinds of apps and gadgets that are used in the world. The most cost-effective and efficient way to run an eCommerce site is through an insurance policy. Depending on the technology and the team involved, an effective insurance plan can cover a business from negligence, viruses, and hardware failures to bankruptcy and more.
4. Define your customer segment
The audience or the target public, in short, to whom we are going to offer our product must be correct, otherwise, no business strategy will work.
One of the big problems that many companies suffer is not related to their product or service, but to the choice of their Buyer Persona. Buyer personas are representations of your ideal customers. They help you define who this audience is that we want to attract and convert, and above all, it helps us to humanize and understand this target audience in greater detail.
It is important not to get carried away only by a business plan or strategy and to take into account the type of audience we want to reach. Each product has its customer segment or segments, and recognizing them requires careful market research.
With new technologies, consumer analysis has become much more comprehensive, facilitating interaction with them and obtaining more information about it.
5. Build your brand
In other articles, we have already discussed a subject as important as the brand. Every startup, like companies and professionals, needs to build its business in parallel to a brand.
Startups, as small businesses, must compete in a difficult and highly volatile market. They compete with big brands and not-so-big ones, but ultimately the fight is between the brands.
The brand shows the identity of the company at its best, the more complete and transparent it is the more notoriety it will have. Let’s not forget that a brand is defined by a consumer’s or customers’ general perception of your business. The process of creating a brand requires study and reflection, as well as a policy of continuous work and visibility over time.
6. Form an optimal team
As in any aspect of life, being lucky enough to be surrounded by the right people helps you grow and improve. The same thing happens in the context of startups. The management of a company, especially in its beginnings, requires great dedication and knowledge to be able to provide effective solutions in real-time and anticipate possible problems. People with confidence, a desire to work and faithful in business idea are necessary to create a solid, united group with a future.
7. Develop your Minimum Viable Product
It is nothing more than the first sample, the final service products to offer to future customers. It is a concept closely related to new companies and to achieve it, it is necessary to follow certain protocols to achieve said Minimum Viable Product with the best guarantees and in the shortest time. It is usually catalogued as a startup’s first work project; from this Minimum Viable Product, its costs, time and suitability for the target audience can be estimated.
8. Validate the business model
One of the fundamental steps before launching a business model on the market is to carry out a correct validation of the different hypotheses on which it is based since if we do not do so, we run the risk of building our business on false ideas and perceptions.
The hypotheses on which the business model is based are those ideas or suppositions that we have not been able to confirm or that we are not sure will work as expected… that is to say, practically everything, which implies that we must make an effort to validate these assumptions as soon as possible.
The objective is to design different experiments and tests to validate the best acquisition channels and the viability of the business model, which will possibly lead us to have to propose new changes or options in the model. It is useful in this phase to use different Inbound marketing strategies to test the response of users to your product or service without being invasive.
9. Determine your financing needs
As we have said before in the definition of startups, they are small companies with an idea to develop and in urgent need of financing from their founders and partners. Financing a small business, especially a new business, is a difficult but not impossible task.
The idea is clear: get money to start the business project. For this we can enumerate a series of formulas:
- Seed Round: It is the so-called initial financing of any business project, based on the confidence and knowledge of the entrepreneurs. It usually comes from relatives and the closest environment.
- Business Angel: They are the so-called private investors; it is subsequent financing as a result of the departure of the startup. It is based on a study of the first numbers of the business; these will be the best cover letter to get this type of investment.
- Bank loans or credits: We cannot forget about banks, to get a loan of this type you must have a very viable business plan with positive results.
- Crowdfunding: Possibly one of the most effective financing tools for startups. A mode of crowdfunding via the internet, crowdfunding platforms offer space to add projects and their needs. Users are those who donate capital for the achievement of these projects.
10. Network with key partners
For some time now, networking has been considered a key resource to enhance the development of a company. For startups, networking becomes vital due to the great opportunities that can be obtained.
Networking defines the idea of having a space to meet other professionals and generate new contacts and business opportunities. There is no self-respecting event that does not have a place to facilitate networking. Conferences, events, training… Any time is a good time to carry out networking tasks, Ideal to make you known, attract investors or give visibility to your product, service or brand.
Creating your startup from scratch can be the project of your life, with serenity, patience and professionalism you will be able to see your wishes come true.