Understand how technology is holistically integrated into your business and how to approach it strategically … [+]
While not all startups are high-tech, almost all contain some kind of technology. This is usually where their innovation and scalability (hence huge upside potential) comes from.
So effectively handling the technology side of your business is critical to your overall success. This means not only understanding the actual technology, but also understanding how it will integrate into your business and how to strategically use and invest in it.
Here are some ground rules that are important to understand for both technical and non-technical founders.
2. Building for too long without customer feedback
If you’re a tech founder, your comfort zone would often be to cut yourself off from the outside world and build the best possible version of your idea.
However, this is the cardinal startup sin. Wasting a lot of money, time and effort on something you’re not sure the market wants is a surefire way to prepare yourself for failure.
Innovative ideas and offers need validation. What you show to customers should not be flawless. It is crucial to adopt the minimum viable product mindset. Even if your technology barely works, this is usually enough to grab the customer’s attention if your technology solves a real problem.
You always have time to improve and polish it later. Your first job is to make sure you build something that people want.
“If you’re not ashamed of the first version of your product, you’ve launched too late.”
This quote from Reid Hoffman (founder of LinkedIn) is one of the most famous startup quotes for a reason. Follow it religiously.
2. Over-investing in technology
Developer salaries (or agency/consultancy fees) are often by far the largest expense of (software) startups. This in itself is not a problem, but you have to be careful as it is easy to overinvest in non-essential product features.
According to the Boot Genome project, premature scaling is the biggest reason for startup failure. One of the easiest ways to scale prematurely is to invest money in development before you’re sure you need it. Remember that in the early stages, your job is to bring a functional MVP (minimum viable product) to market. Going beyond that in the early startup phases is a mistake. You have other important work to do before moving forward (validating and adapting your offer, marketing, etc.).
Investing too much in development will starve other aspects of your business that need the resources just as much.
3. Building an overly complicated technical solution
In the beginning, complexity in any area (including technology) is your enemy. Complexity is a big source of problems and in the beginning you would not have the manpower (and other resources) to constantly solve these problems.
For an MVP, the optimal number of functions is one.
Ideally, you would have a single-function technical solution (your MVP) that solves a real-life problem faced by a certain, specific type of person (your MVS – minimum viable segment). This would minimize complexity and make your work in both technology and marketing as easy as possible.
Of course, this ideal is usually not attainable. Yet you must strive for it.
In conclusion, as a startup founder, you should adhere to the following rules of thumb when it comes to managing the technical side of your project:
- Don’t worry about polishing. Instead, worry if you’re building something people need. Stay in constant touch with your customers when you’re building. This would keep you from going in the wrong direction.
- Don’t spend too many resources on technology. All aspects of your business should be in sync.
- Avoid complexity as much as possible. Different people ask for different features and even custom builds of your solution. Don’t take those requests lightly. Only do it if you are absolutely sure that this is the direction you need to take your product.
