How to Launch a Tech Startup in 2020

We live in a golden era of startups. Companies such as Facebook, Apple, Twitter, Oculus have proven to the world that a great idea can lead to success even without a large investment. But if this is not the first time you are searching for the topic of startups, then you know that according to statistics, 90% of them fail. Having extensive experience working with startups around the world, IdeaSoft experts drew attention to some features that distinguish promising startups from failures. This article was written based on their expertise. Let’s figure out how to launch a successful startup in 2020, how much money you need, and whether it’s possible to start a startup without technical knowledge.

Some statistics on startups

Besides the fact that not all startups become successful, it’s good to understand how these statistics are changing from industry to industry. According to The Ultimate Startup Failure Rate Report, such industries as Information, Construction, Manufacturing, Mining, Services, Agriculture, Education, and Health are in the main risk zone. Although today we can say that after the pandemic, the development of the Healthcare and Education industries can increase significantly.

But why is this happening? Why do some ideas work while others don’t? CBInsights conducted a study and found out what are the most common causes of failure among startups. The three leaders included the lack of demand in the market, lack of money, and the wrong choice of a team.

The results of the study make it clear that the idea is not everything for a successful business, and to achieve results, you need to make a lot of additional effort.

So how to launch your startup

Most articles on this subject contain voluminous paragraphs with tips on how to develop your brand, hire a sales team, start social networks, and so on. That’s right, but several other crucial stages precede these. Remember the main reason for startup failure? Lack of market demand. Therefore, the first stage depends only on you — test your idea.

Unfortunately, the idea is worthless if it doesn’t benefit people. The fundamental rule for creating any new product is to answer the question of what problem it solves. You must clearly understand who will use your product, how it will be helpful, how it will improve someone’s life. Otherwise, no one will pay for it just because it’s an interesting idea. Ask yourself as many questions as possible regarding the future product:

• What problem do you solve?
• Who are your future users?
• Who are your competitors?
• What market are you going to work on?
• What result do you expect after launching your product?

After that, do market research to find out the main trends and determine if your startup will fit into the system. You can even ask representatives of your target audience if they would be interested in the product. Want to develop a retail app? Ask sellers about their challenges and offer your idea.

“If you’re competitor focused, you have to wait until there is a competitor doing something. Being customer focused allows you to be more pioneering.” — Jeff Bezos, American entrepreneur, founder of Amazon.com

You shouldn’t create a product solely for yourself, relying on your opinion if you want to sell it to other people. Tech startups always bring something new but try to turn your idea into an understandable, simple product that people will gladly use.

How much money do you need to launch a startup

It’s hard to answer this question unequivocally. Depending on the characteristics of each individual project, the cost will vary significantly. According to the US Small Business Administration, most micro-businesses cost about $3,000, while most home franchises cost between $2,000 and $5,000.

Design your cash flow to understand how much money you will need and what kind of costs it will be, how you can reduce them. If you are creating a new technology product, then you shouldn’t save on development. Open-source software is unlikely to be a good basis for creating something unique. Moreover, such software won’t meet all your needs. It’s much better to create a custom product where your wishes will be taken into account. Remember, a good product is easier to sell. Don’t spoil your idea with poor-quality implementation.

Also, if your starting capital is very small, try to attract additional investment. You can try to find an investor among friends or influential people in your area, if they understand the value of your idea, they will not refuse you. Another way is to attract third-party investments through special online platforms like Angel Investment Network, Gust, and others.

How to choose a development team

It’s a common question “Can I start a technology startup if I don’t know how to code?”. The right answer is yes. You need to understand your domain, your audience, which product you want to create, and developers will answer the question of how to do it. Of course, this is good, if you are a tech person and are versed in technologies and development approaches, it will be easier for you to control the process of creating the product. But if this is not the case, you can hire a software development team to help you. We already wrote about where to look, and how to choose a software development company. Here are the main criteria for making the right choice.

7 things to consider when choosing a software development team for your startup:

1. Location. You should know that software development in Eastern Europe is cheaper than in the west. And developers from Slovakia, Hungary, Poland, and Ukraine are among the tops best specialists regarding price and quality. Therefore, many startups have European roots. If it doesn’t matter to you which country to work with, you can find talented developers here and get a good product for relatively little money.
2. Expertise. There are several ways how you can check company expertise. Start with the website. Check out the blog, social networks, see what the company is and what kind of specialists work there. Do they write articles? Perform specialized events? Is the media talking about this company? Find as much information as possible regarding the work of the company.
3. Testimonials. Customer reviews usually talk a lot about a company. Check testimonials not only on the site but also on third-party resources such as Clutch, GoodFirms, and others.
4. Delivered projects. Work with startups is specific. Review the projects section of the site to find out what the company has already worked with. Look for similar industries, similar projects, check the result. Companies that work with startups can offer you much more, realizing that you may not have an in-house business analyst, marketer, or other specialists.
5. Communication. Start communication and see how comfortable it’s for you to discuss your project with company representatives. Do they give you enough attention, are they interested in your project? Comfortable work is very important for both parties.
6. Cost. Obviously, the cost is important for whoever launches a startup. Ask to evaluate your project, compare several offers, but never make a decision solely based on price. Always put expertise on the top of your list, so you won’t have to pay a second time for refinement if your product is of poor quality.
7. Development Methodologies. Pay attention to how wide the technology stack of the company is, company workflow. If you know which technology is best for your project, you can choose a company with specialization. Anyway, the process of interaction with the company should be transparent and convenient.

When your product is almost done, start testing it on users. Be ready for the fact that the refinement will be needed not through the fault of the developers, but simply because you didn’t take into account some features of the market or the target audience. The wisest decision in this situation is to accept comments and improve your product if you want it to take its place on the market.

Now you know with what steps you need to start launching a startup. Remember, to become a new market changer you need to reinforce the idea with a quality implementation. Consult with other specialists, make timely changes, rely on data. Maybe your project will be the next Google-sized breakthrough. Believe in your idea and bring it to life with the help of advanced technologies.

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