Success in technology entrepreneurship is different from conventional entrepreneurship paths. Setting up a successful technology business is not the same as building non-technology businesses. Technology startups use technology to serve their customers at scale. Coming up with this technology demands a series of verification, iteration, and in some cases, scrapping whole plans.
How to get success in Technology Entrepreneurship? Here check out the below 7 tips you must have to succeed in technology entrepreneurship:
- Identify a need
- Verify the need
- Verify the solution!
- Develop the key features
- Try out the riskiest assumptions
- Spend on customer acquisition
The search period that technology startups undergo to develop a scalable, and repeatable business model with their product in a bid to solve problems and make a product worthy of their customers’ money, is what sets them apart.
- Why and where most Fail
- The Learning Curve
- 7 Tips to get success in Technology Entrepreneurship
Why and where most Fail
For many years, the principles and approaches used to set up non-technology businesses were used to launch and spur technology startups. In a nutshell, upon understanding the market, if you develop and market a great product, customers will jump on it and pay for it.
However, this approach proved detrimental for technology startups. Findings indicate that around 45 percent of startups fail because of a lack of market need.
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The Learning Curve
The learn-build-promote methodology passes on the business model search period, and oftentimes assumes that the developed solution is valid and will attract the attention and money of customers.
While some startups are able to strike gold, the majority realize that they need to make major changes to their business model or product.
In some cases, lessons gleaned from product launches often call for a complete change in direction. This means that they need to build a different product as if they are starting from scratch.
7 Tips to get success in Technology Entrepreneurship
If you are to succeed in technology entrepreneurship, you have to understand that you have to be constantly evolving, no matter how keen you are in building a product that people adore. The objective is to minimize the smaller mistakes, especially in the founding risky stages.
Here is the Reprieve
This guide will instruct you on how to build a successful technology business that is profitable, by quickly understanding what customers need, and are willing to pay for, ensuring that you don’t waste resources on outdated strategies and solutions.
1. Identify a need
Technology entrepreneurship ideas are simply suggested solutions to a need or problem. While there might be numerous business opportunities out there, the more urgent a need is for a remedy, the more likely the product is going to be used.
As such, the first thing to do is determine how urgent an identified need is by asking the following questions:
- Are people spending money on an alternative solution?
- What is the outcome when there’s no solution? Do people lose money, burn time or are they unable to get important jobs done?
- Is the problem unavoidable?
- Are there underserved or overlooked segments?
Getting answers to these questions will help you determine if the solution is worth developing. The last question may open up opportunities for specializing, where you develop a solution that is tailored towards a certain group of consumers, even in the midst of large competitors.
This stage is crucial to an entrepreneur before they reach out to key stakeholders such as customers.
By the end of it, you should be able to craft the first draft of your business’s value proposition statement: For [customer section] who is discontented with [weaknesses to existing solutions], our product presents [benefits/disparity].
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2. Verify the need
Many ideas may look awesome on paper, but in real sense, are not sustainable in practice. Developing and promoting a product is one way of validating a solution. Nonetheless, this method is long, expensive and often causes many startups to fail.
Including some few steps before developing a product will markedly cut costs as well as startup risk. The objective from these is to develop in response to demand.
A product is developed to meet customers’ needs. As such, only the customer is able to tell if a need is urgent, and if they are ready to pay for another solution. For this reason, the first step in verifying demand is customer interviews.
The perks of interviewing prospective buyers go beyond getting insights. Take this group of interviewees to be your mentors, investors, and marketers. They’re mentors as they can guide you to develop a product that they need.
They’re investors as they can bankroll the initial stages by pledging to the solution in the early stages. They’re marketers since they can spread word on your product and bring in other customers.
You can get together your group of interviewees by taking advantage of online and offline communities, cold outreach, social media sites, your network or other channels that enable you to link up with your prospective buyers.
The objective from these interviews is to spot uniformity in respondents’ answers which then indicate that a problem is worth working on or not. If it is, proceed to the next stage. If it isn’t, let the interviewees help you identify the need you should address.
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3. Verify the solution!
You might be tempted to dive in straight to developing the product based on your respondents’ evidence of a need and demand for a solution.
The truth is, many of the things we declare we’ll do are different from what we finally do.
That is to say, while insights from interviews should be classified as a good validation signal, it’s until customers commit to the product and use it that we have proof. Here are four steps to validate a solution.
What Do Potential Customers Say?
From the customer interviews and your research, you should be able to see how a product will look and function. Before you develop it, design it. As stated above, one of the perks of involving customers from the beginning is their impact as guides or mentors.
Bring in a few of your respondents to give their opinion on your product designs and aid you in making the product they’d be willing to use.
There are a number of reasons why you should begin with product designs. One, they are fast to make. Two, the first phase to any software development project is design. This means that you’d have embarked on design either way.
Three designs come in handy when testing ideas as you can make changes quickly without expensive and time-consuming redevelopment.
Make Clickable Prototypes
Make your designs into clickable prototypes. There are numerous tools that can aid you in making prototypes, whether you have a programming background or not.
The prototype, in this case, will not be the end product that your customers use but will act as a presentation tool for the next stage.
Launch a Mafia (Irresistible) Offer
Develop and promote a mafia offer. If respondents joined hands to craft the designs and prototype, and the need is valid, then your future users should have no problem committing financially to an offer that is irresistible.
At this stage, you might see objections and hesitations. It is at this time you learn if prospective buyers were genuinely interested in the product. It will come as no surprise that, most, if not all, of your respondents will not be invested in the solution.
Hook and Sinker
In numerous cases, especially when there are a lot of alternative options, prospective buyers may opt for a functional product, before they commit to it.
For this reason, the quickest way to hook in these customers without having to spend the subsequent months transforming the designs into a product is by developing a delivery process for a non-scalable solution.
This solution will combine existing tools with manual work to ensure the customers’ job is done.
Those four steps will grant you all the insights you require to develop a product customers are inclined to use. Best of all, this shouldn’t take up much time, say, a month at best.
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4. Develop the key features
Having verified the demand and solution, it is time to develop your app idea. As stated earlier, one of the perks of testing the demand for a solution using product designs is coming up with a visual plus interactive version of your product before you even build it.
This plays a huge role in the development phase since so far, the visuals and features should have been tweaked and readied for development in regard to customer feedback and insights.
One of the high-cost mistakes technology entrepreneurs make at this point is to develop a very advanced product before they quantitatively verify the core features.
These are the important features for meeting the value proposition of the product. This means that without them, users will be unable to get the job done.
If users don’t identify the core features, chances are the impressive features you have will not impress them. As such, it is better and safer to begin by developing and promptly testing the key features of the solution.
If you don’t have a coding background or a technical co-founder, look for a team to aid you in developing the solution. Leverage freelancing platforms to find the people that possess complementary skills.
Getting an app idea to a product that people can use is unique from developing other software products. For this reason, seek experts in technology entrepreneurship .
These are talents that also have their own startup projects and know the hustle of building a startup. They will guide you by offering advice and help you avoid common pitfalls.
5. Try out the riskiest assumptions
While the early stages look to determine problem/solution fit, this stage shines light on product/solution fit, that is, how efficient you are at turning the proposed solution into a product that can be used. The riskiest assumption is users using the core features for a certain benefit.
Key metrics to leverage in this stage include churn rate, customer lifetime value, and user growth. They will help gauge the impact of the solution in working out the identified problem.
More importantly, the information gleaned from customer interviews will aid you in connecting the dots to come up with educated conclusions about the solution and the subsequent steps.
Also, read, 18 Signs it is Time to Quit Your Job.
6. Spend on customer acquisition
For success in technology entrepreneurship, you are encouraged to start getting an audience from the start, even before you identify a need in the market.
Starting off with an audience implies having people that can give you insights, buy into your idea through presales, recruit others, and more.
There are many avenues that can aid you in building an audience. These include writing articles, making a podcast, launching events and being active on social media.
For instance, you can build a growing audience of future customers by actively writing blog posts and guest posts before you launch your product.
The channel you use for acquisition will depend on your product and your target buyer. It’s crucial that, at this stage, you at least set the foundation of an acquisition channel you can use repeatedly, be it, content marketing, paid ads, cold outreach, etc.
A startup may have a great product with customers that pay, and yet, fail to verify their business model at scale.
For example, if the cost of customer acquisition is higher than the return gotten from retaining them, then this means the business is operating at a loss.
Once you have validated core features, the next thing is to continually improve the product by presenting the users with all the necessary tools so that they use the product often and draw others to it, thus boosting customer lifetime value and cutting the customer acquisition cost.
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To succeed in technology entrepreneurship, you need to find out if a solution is urgently needed by looking at the competition and chatting with future buyers.
Next, you need to verify the solution by incorporating the customer in product designs and determining their commitment. After that, you need to develop and verify the core features of your product; these are features that are crucial to the users’ ability to meet their validated needs.
Once you are done with this, you need to build the basis of an acquisition funnel to come up with a predictable revenue channel. Finally, continue improving the product as you collect and analyze data to improve user experience and set your product apart from the competition.