Founders need to have a plan detailing how they intend to turn their fledgling start-up into a successful company. The five tips illustrated below are the perfect starting points for creating a plan for developing a successful start-up.
Essential Tips for Successful Tech Startups
Market research: Extensive market research needs to be done prior to investing in a start-up. Those who do not know their market well enough will be unable to allocate resources properly and will have problems achieving sustained growth or even attracting investors. It is also important to know how large the market is, the strength of competition, and what problems the target audience has. Proper market research is especially essential when dealing with investors. Founders who can provide unique insights to investors about their market have a better chance of inspiring confidence, than entrepreneurs who do not.
Ideas to tackle everyday problems: The best ideas are the ones that solve everyday problems. Some of the most successful start-ups are based on ideas that address daily issues, for example, Uber is successful because it provides busy people with a way to move from one place to another with ease. Ideas that tackle everyday problems make it easier to market and sell their product and service.
The right revenue models: The challenge for start-ups is not selecting the right revenue models, but growth. Maximizing revenue should not be a priority for most founders, especially when their start-up is brand new. Instead, a successful start-up must focus on generating goodwill, for example, giving their consumer products away for free.
Motivation: The key characteristic of any entrepreneur is not intelligence, but motivation fuelled with passion. Founders who lack motivation may not be able to weather the storm that comes with running a brand-new company using limited resources. It is a founders’ motivation that plays a vital role in inspiring the investors and partners as well.
The engine for growth: According to Micheal Seibel, CEO of Y-Combinator, investors are no longer investing in ideas, but investing in growth. Investors are more likely to invest in start-ups that have discovered their engine for growth, along with appropriate evidence for growth. Growth can include continuous increase in userbase or revenue.