Are You Want Starting up a Tech Company and Survive!
SO MANY STARTUPS! So little exposure. What to do if you want your tech startup to survive?
The tech industry is one of the most challenging to penetrate as a startup. The market is flooded with aspiring entrepreneurs hoping to be the next great thing, but you won’t stay long if you’re selling the same remedies to the same customers as everyone else.
Most markets are now saturated and competition is extremely fierce between companies offering similar services/products. The competitiveness of a tech company today depends more than ever on its ability to develop strategies that allow it to face this competition and, above all, to emerge as a winner. The good news is that there will always be an opportunity for new businesses that can carve out a niche and set themselves apart from their competition. Our advice is to set up a winning strategy to combat the struggle for survival as a tech startup.
Know your competition and yourself for Starting up a Tech Company
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
― Sun Tzu, The Art of War
An entry into the matter certainly a little cavalier but which constitutes the basis of any effective commercial strategy to face the competition, this war … is economical. Indeed, it is appropriate to consider competition between tech startups in the first place as an economic cold war that requires a lot of tactics. The first of these tactics is economic intelligence.
You must have an acute knowledge of your strengths, weaknesses, your short-, medium- and long-term strategy, and the state of the tech market. You should have exactly the same level of knowledge as your competitors if possible. You need to know what is the business strategy they put in place, know their weaknesses, but also and especially their strengths. This is the sine qua non for developing tactics that will allow you to face this competition.
How to Create Starting up a Tech Company Effectively:
BE INNOVATIVE for Starting up a Tech Company
Being innovative does not mean creating a technological invention, releasing a new product, etc. Being innovative means being able to develop differentiation strategies:
- Propose an original concept
- Propose a different loyalty system
- Playing the customer relationship card thoroughly
- Expand the range of services
Being innovative means being where your competitor is not. In addition, once you have developed an innovative, alternative marketing strategy, if your competitors ever follow suit, they will only be followers and will make you a precursor: they are cornered. Indeed, either they do nothing to counter your attack and then you take advantage, or they copy you… and you also take advantage! Innovation is always a victor, especially in a hyper-competitive tech market.
MULTIPLY TECH BUSINESS CHANNELS for Starting up a Tech Company
This is of course the last thing you can do to displace your competitors: diversify your business channels. Do you have a physical store? Create an online store that is closely linked to your physical store. Create partnerships with other companies that are not competitors but share your targets; it will be a win/win: you will bring each other customers. Ideally, if your offers are complementary, you can even offer turnkey services/products for your customers.
UNDERSTAND THE FORMATION OF THE VALUE CHAIN for Starting up a Tech Company
When a customer buys a product or service, they are helping to fund a system that is valuable to them. This system is not limited to the Starting up a Tech Company. It consists of several elements: its infrastructure, human resources management, technological developments, the supply chain, the distribution channel… The whole forms an inseparable whole called a value chain.
Here, your job is to analyze where the value lies in the eyes of the customer. In other words, you need to identify which elements create value as well as which ones bring nothing or, on the contrary, are poorly perceived by consumers. For this, you can use the techniques provided for market research.
POSITION YOURSELF IN NEW TECH MARKETS for Starting up a Tech Company
In order to be a company that stands out, it is necessary to bet on modernity and adapt to the challenges both from an ecological and social point of view and in terms of responding to the new needs of the consumer.
Thus, do not hesitate to bet on new markets such as eco-responsibility, local markets, and niche sectors.
Why so many Starting up a Tech Company fail?
While 9 out of 10 tech startups struggle to survive within 5 years, many analysts and Venture Capitalists have looked at the reasons that lead the majority of startups to failure. To continue in a competitive and innovative environment, the CEOs of new tech startups must be able to carry out the management of funding, the implementation of concrete strategies, and the management of their teams.
Unfortunately, the ability of CEOs is not everything and startups fail while the team performs well and funding is sufficient.
- Lack of liquidity
- The startup mismanaged its cash and spent its reserves too quickly.
- The startup failed to complete a new round for various reasons.
- The startup has never managed to generate profit.
- The failing team
- Battered by competition
- Bad product / Business model not found
The Premium of Starting up a Tech Company and Survival Kit:
Staying ahead of the art
In the digital world, everything is changing very quickly. What is at the forefront today will be surpassed tomorrow. To stay ahead of the competition, startups must always add an extra layer of innovation to their product.
While functionality is of course essential, other criteria such as design should not be forgotten. Thus, a very functional object, but which does not fit well into the uses, in the working environment or which lacks ergonomics will lose the market to a competitor who will meet all these criteria. In this, start-ups must continue to evolve with uses and innovate, without focusing solely on product technology. All aspects of customer need must be taken into account.
Holding on despite difficulties
When you manage a tech start-up, it quickly becomes necessary to incur expenses, to recruit a team. The first steps are delicate because we often lack experience in management or treasury.
This can lead to difficulties on several levels: financial, with poor management of capital, human or legal, via an unfavorable partnership for example. For tech startups, there is a real course to go beyond: you have to learn to become the leader of your company, and therefore learn to part with your employees or to bounce back from investments that fail.
For this, being accompanied by experts is crucial. Start-ups can’t concentrate on all the talent; they have to learn to surround themselves. This is the whole point of incubators, which help guide the Starting up a Tech Company throughout its growth. Nevertheless, these structures often lack resources. However, the lack of support can lead startups to make bad decisions, which quickly become fatal for such small structures.
Beware of fundraising!
Many tech startups rush to raise funds to grow. On the contrary, this may disadvantage them. Indeed, this is a risky strategy for the financial structure: the fundraising must be done at the right time when the start-up has made a product that works and has already won the support of the public. The funds then make it possible to accelerate the project… But in no case to initiate it.
During the launch phase, it is better to rely on subsidies: many aids can be granted to entrepreneurs, in particular via regional funds.
Communication must be a priority
For tech startups, communication is often perceived as an additional expense with an ROI that is difficult to quantify. Nevertheless, they must make it a priority: it is essential to make themselves known.
Tech startups, therefore, have every interest in communicating, both on their teams to enhance their work and humanize the brand, but also on their products to gain visibility. Press relations, social networks, events: it is essential to assume this item of expenses to hope for a good return on investment and boost your project.
Companies such as Tesla or Apple also experienced difficulties in their early days. Nevertheless, their visibility, innovation, and cohesion have allowed them to meet success and build a solid foundation for their business. The first quality of a startup is its endurance: it is by persevering that it will be able to stand out and survive in a very competitive market.
Starting up a Tech Company Survival Kit: Conclusion
Let’s finish with Sun Tzu again:
” Invincibility lies in the defense; the possibility of victory in the attack. One defends when his strength is inadequate; he attacks when it is abundant.”
The best strategy for survival in this oversaturated tech market is to move forward. Agility is always the key to success since a wait-and-see attitude shows you the way to defeat!