How to Start a Tech Startup [Beginners Guide]

Currently, there are over 1150 unicorns worldwide. No, we are not talking about the mythical creature. We are talking about startup companies that are valued at over $1 billion.

Of course, that is the dream of every newborn startup, but do not get ahead of yourself. First, you need to do a lot of research, work, and perhaps get a smile from Lady Luck.

In the world of startups, tech ones are particularly popular, with New York City alone, being home to over 9000 tech startups.

Still, starting a tech company is not a piece of cake. It requires a lot of hard work, dedication, and the right amount of business acumen.

But fear not, in case you are wondering how to start your own tech startup, you have found the perfect page to learn.

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How to Start a Tech Startup?

1. Brainstorm an Idea and Build Your Brand
2. Validate Your Idea and Do Market Research
3. Get Funding
4. Build a Team
5. Choose a Marketing Strategy
6. Scale and Grow

1. Brainstorm an Idea and Build Your Brand

The very first steps into starting a tech company are to carefully think about your main idea behind the business. What product or service do you want to bring to the world? Usually this is either a solution to an existing problem, or something that fills a gap in the market.

After you have successfully decided on what ideas you want to put together into a business, it is good to think about a domain name for your website.

Of course, that is the first step of building your brand, since the domain name you choose will also be the name of your business.

Naturally, building your startup brand is not something you can do in a day. It requires consistent effort throughout a long period of time, and is a process that, practically, never ends.

Still, a business without a brand (no brand brands excluded) is more or less doomed to failure, since the brand represents your personality, and is the factor that can determine whether customers will like you, and what type of users you will attract.

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2. Validate Your Idea and Do Market Research

Every point in our list is important, however, this next step is crucial.

Why?

You must validate your idea before entering the market, since most of the time, startups fail, due to their lack of knowledge of the market, customer demand, and need for their product or service.

You can start validating your idea by doing market research. See if there currently exists any other product or service that offers something similar to what you want to offer.

If such a product/service exists, that is proof that there is a market demand, and you can safely go ahead with your idea.

Of course, you should research and find your target audience, which you will then build your strategy around.

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3. Get Funding

You have to invest, in order to earn. Without the necessary funding, your tech startup will not get too far. Starting a tech company means that you have to think about many costs in advance.

There are also several funding methods from you to choose from including personal investment, crowdfunding, angel investors, venture capital, loans, etc.

What is more, if you are trying to start a technical startup as a non-technical person, you can benefit from investors, not just in terms of funding, but also in technical expertise, and business consulting.

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4. Build a Team

Starting a tech startup is not all about products and technologies. You need to surround yourself with motivated people who believe in your cause, and have the appropriate skills and knowledge to allow your startup to develop and grow.

The right employees, who have expertise in the field, can truly take your business to the next level. Additionally, if you are not the tech-savvy business owner, you should definitely look for a strong technical lead for your team.

Furthermore, you should evaluate the type of technology you want to use, and hire professionals accordingly. For example, if your business revolves around WordPress, you will need experienced PHP, JavaScript, CSS, and HTML developers.

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5. Choose a Marketing Strategy

Alright, so you have an idea, you validate it, do market research, gather the required funding, and assemble a great team. Well done!

So, what is next?

Unless some miracle happens, and the whole world wakes up knowing about your product or service, you will need to venture into the world of marketing.

Marketing strategies include a lot of work, and things to think about. For instance, which channels will you rely on to bring traffic to your website – social media, advertisements, SEO?

What type of brand voice are you going to use? What pricing strategy will you go for? Should you set up a free trial of your product or service?

You see, there is more to marketing than meets the eye. It is not an easy process, but it is well worth the efforts, since a great marketing strategy can ensure that your business is recognizable, and profitable.

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6. Scale and Grow

There is always more work to be done when developing your tech startup. Therefore, the final step in our list is to scale and grow your business.

After all, even big corporations continue to develop their products or services, and look for ways to grow – expand into new markets, acquire new customers, release new products, etc.

This is a great opportunity to remind you that DevriX is a WordPress agency that provides website development, maintenance, as well as, business consulting, and marketing services.

We are experienced professionals that can help you during any of the stages of your tech startup development, so do not hesitate to contact us for collaborations.

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Common Challenges Faced by Tech Startups

As a startup founder, you should be aware of the most common challenges others have faced before you. Those who do not learn from history are doomed to repeat it, so if you want to prevent a lot of issues, check out the following common problems tech startups have:

1. Brutal Competition. You are not the only one on the market. As stated in the beginning of the article, there are over 9000 startups just in New York City. The competition is fierce, and not everyone will survive. The first step to prepare for this is to simply acknowledge the fact that it will not be easy. This should give you a mindset of trying to make everything count. If you approach the process thinking that it will be super easy, you will most likely become a part of how many startups fail statistics. For your information, 20% of all startups fail, because they get outcompeted.
2. Unrealistic Expectations. Similarly, setting unrealistic expectations for yourself can be detrimental to your success. The thing is that if you expect to become an industry leader within a year of inauguration, you will most likely be disappointed, when a year passes, and you have not become such. Instead, it is much wiser to be realistic and take things one step at a time. Celebrate the small wins, and continue pursuing your goals.
3. Unsuitable Employees. The hiring process can be nerve wracking at times. Employing the wrong people can be very costly for a startup (over $100,000 for some roles), due to the onboarding process, and so on. This is why it is crucial to hire not only the most qualified, but also the most suitable people for your organization.
4. Inability to Convince Investors. Securing funding is not an easy task, especially given the fact that many investors are reluctant to take the risk and invest in newly-created businesses. After all, you have no history, and there is no guarantee that they will be able to regain their investment. All this makes it very difficult to secure the initial capital for your startup. You need to be exceptionally convincing, and back up your ideas with data if you hope to stand a chance against all the odds that are against you.
5. Poor Financial Management. 38% of startups fail, because they ran out of cash. That is why you always need to be mindful of how you spend your money, and consider any new expenses you might have. Also, do not forget that an increased income means a rise in expenses, as well. If you feel overwhelmed by the financial management aspect of your startup, do use a financial consultant.
6. Winning the Trust of Customers. Winning over the trust of your customers is not something that will happen overnight. In fact, without customers, you cannot exist. Therefore, it is crucial that you face this challenge with the utmost importance. Be customer centric, think about what your customers want, and how to give it to them. Encourage feedback, motivate them to leave a positive review, and at all times try to satisfy their needs.
7. Handling Everything Alone. Is it hard for you to trust others to get things done? Perhaps you are micromanaging, and feel that no one else knows what is best for your business? Well, all this is actually unhealthy. At a certain point in the growth of your company, you need to let go. Trust the management team you have hired, and avoid founder burnout, which is the cause behind 5% of startups’ failure.

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Can You Be the Next Unicorn?

After going through all the steps on how to start a tech startup, is the dream of becoming a unicorn still alive in you?

Are you willing to go through all the hard work and headaches that come with starting a tech company?

Perhaps you have the business acumen to bring home the bacon. Founding a successful startup is hard, and the truth is that it is all up to you – whether you fail or succeed.