Research shows that about 70% of tech startups fail before they can grow and sustain themselves.
A primary reason for this is usually that they failed to produce a service or product that consumers needed. With unlimited access to innovative technology and relatively low barriers to entry means, it’s pretty easy to build a product. That also means it’s easy to build a product that nobody will buy.
Forbes says that there are other reasons why tech startups fail. Some bleed cash and run dry sooner than expected. Some fail because they don’t have a solid team backing their product. No matter the reason, the high rate of failure looks to make success less likely for new tech entrepreneurs.
Let’s look at some actionable takeaways to help launch tech startups and achieve success.
Create a Product You’re Passionate About
Passion is key when launching new tech startups, so if you’re not passionate about what you’re developing, you may be setting yourself up to fail. Make sure that the product is marketable and appeals to a target audience, but passion is critical.
Experts say that personal experience is another great motivator when creating a new product for tech startups: the more personal the pain point is to you, the more passionate you’ll be about creating a solution for it.
Plus, to have a greater impact on the market, the solution should leap ahead of the existing offerings. Create an innovative solution that solves problems in a radical way.
Tech Startups Must Have a Minimum Viable Product
It’s okay to want perfection, but for tech startups launching their first products, it’s a risky objective that could slow down your entry into the market and open the door open for competitors. Instead, launch a minimum viable product with basic features that will solve your customers’ problems and get their attention.
Solicit Feedback and Make Improvements
A minimum viable product is a smart way to test commercial viability and gain valuable feedback from the market. That’s data you’d be missing if you try to develop perfection in a bubble. If tech startups’ products do not initially resonate with the market as expected, the team should use the response to make enhancements until your product gives users what they need.
Tech Startups Need a Business Plan
You should also consider the business side of your startup, which is connected to your vision. As a result, you need to create a proper framework to help you achieve your vision for the company. Be ready for this plan to evolve as it intersects with real-world customers, roadblocks and the competition.
The business side frequently is neglected and not an initial strength for many founders tech startups. Therefore, you should bring on the right people to get through this phase.
Form the Right Team
People are critical to your start up’s success. They should share your vision. You can hire people you already know, which will take advantage of existing mutual trust. It also decreases potential friction. Hiring outsiders means you must worry about the cultural fit.
Don’t Be a Part of These Startup Failure Rate Statistics
Use these takeaways so that your company doesn’t land on the rubbish heap of tech startups and become a number in these statistics:
90% of startups don’t make it;
20% of startups fall apart after only one year, and another 30% of startups close within two years;
Half of all startups close within five years; and
70% of startups dissolve within 10 years.
Again, the main reason for these staggering numbers is a lack of ability to offer a product for a target market. Don’t make that mistake. Plan wisely.