6 Tech Tips for Building a Successful Startup
How
many times have you seen news about a new, cutting-edge startup before
finding out a few months later that it’s dead? The remains of their
websites are filled with goodbye messages, also known as “post-mortems,”
where leaders share their regrets and reasons for failure, making sure
to inform customers that they will be receiving refunds soon.
The main reason startups fail is the lack of market demand. Remember those overpriced juicing machines that created a backlash after the users realized you could squeeze their custom juice packs by hand? A similar fate awaited the creators of the infamous
Bodega vending machine, who insensitively considered brick-and-mortar
bodegas an inconvenience rather than the livelihood of numerous small
business owners.
But
we won’t talk about conducting initial market analysis and exploring
customer needs here, even though these factors are vital for a startup’s
survival and success. Today we focus on the engineering side of the
problem. Let’s skip the stage where you shape your innovative idea and
dive directly into the technicalities of creating a startup that will
stay afloat through the anticipated challenges.
Prototype at early stages
You
may be thinking that creating a working prototype is not the action
that starts your business. Instead you may want to acquire some capital
before plunging into app development. That’s probably because you have
an inaccurate understanding of what a prototype is supposed to be.
Paper prototype for a relaxation app
Source
Source
Having a prototype at the earliest stages is helpful for multiple reasons:
- Prototype as a presentation for investors
If
you have an innovative idea for an app, it’s easier to show investors
how exactly it will work instead of trying to explain everything using
words only. Often, you won’t need to impress them with quality design
and animations, especially if you’re showing it to your 3Fs: Friends,
Family, and Fools — the initial supporters of your new idea. Instead of
looking like just a person with an idea, you can present a plan and a
working process that’s easy to adjust. If you decide to create a
high-fidelity interactive prototype, you can use special software and
hand investors an iPhone to show a fully interactive screen without
doing any coding.
2. Going through research and exploration
The
hardest stage of creating a helpful prototype is not the technical
part, but the ideation. If you’re not a tech-savvy person familiar with
the ins and outs of the app development, you may have a problem
designing wireframes that actually make sense. Prototyping will help you
learn what types of screens, actions, and alerts your product needs and
will allow you to bring your idea into a physical form.
3. Gathering the opinions of potential users
Regardless
of how well you researched the market and how detailed your buyer
persona is, the best way to learn about your customers’ interests is to
directly demonstrate how the product will help them. By gathering the
immediate feedback before the programming stage, you significantly cut
the time spent developing unnecessary features. This, of course, doesn’t
spare you from testing and UX evaluation of an actual working product.
A prototype is the first version of a product, a sketch of your vision. Twenty-nine percent
of startups fail because they run out of cash. One of the ways to
prevent this is to be prepared for when you do start spending money.
Your prototype will pave the way for your MVP — minimum viable
product — that version of your idea that holds only the vital features
to be verified by customers and investors. (Check out our informative
article on creating an MVP.)
Such a step-by-step approach to figuring out the basics of a product
will help you stay focused on your initial goals and communicate your
ideas to your team more clearly.
Adopt the Lean Startup methodology
The
startup building process has no framework that will work in each case,
so you’ll have to adopt iterative approaches. To enhance your startup’s
survival prospect enabling you to apply gained insight to quickly
improve, use the Lean startup methodology.
In the Lean Startup world, you work by the build-measure-learn
approach — a way to effectively leverage your resources and make use of
feedback. Rather than trusting assumptions, you build an MVP and learn
from it by gathering feedback and measuring KPIs. The cycle continues
until you reach a total understanding with users, letting that
intelligence tech you how to create a viable product.
Build-Measure-Learn cycle in the Lean Startup methodology
Source: The Lean Startup (2011), Eric Ries
Source: The Lean Startup (2011), Eric Ries
The
Lean startup principles dictate the importance of listening to your
audience, actively learning, and making your development cycles fast.
Here, you don’t aspire to build a perfect product and don’t write clunky
business plans. Instead you use key performance indicators (KPIs) and
adopt a continuous deployment approach.
In his book The Lean Startup, Eric Ries defines four principles of creating and managing a Lean startup:
- Eliminate uncertainty. In the highly uncertain startup environment, the Lean approach allows you to create assumptions about the real world, stay flexible, and use tools such as the Business Model Canvas for continuously testing you vision.
- Work smarter not harder. Don’t ask yourself how can we build this product? Question whether you should build this product at all. And if you do build it, how to make it sustainable. Don’t spend months perfecting the product before showing it to a potential audience and find out that they weren’t interested in the first place.
- Develop an MVP. An MVP is a core component of the build-measure-learn cycle. Your MVP is the spark that starts your engine and allows you to begin measuring and learning.
- Validated learning. To demonstrate the progress of your startup, work on the things your customers need. Adapt your plan step-by-step and be ready to change direction if the feedback tells you to.
The
one step you can’t miss is a team. To successfully create and run a
Lean startup, you must establish non-siloed relationships in your
business where all members are data-oriented, cooperative, and
cross-functional.
Outsource technical staff
Did
you know that at the dawn of their evolution, Slack, Skype, GitHub, and
even Google used outsourced development? Having developers in-house is a
big advantage, but not everyone can afford to hire senior programming
staff at the early stages of the business. Let’s talk about the benefits
of using outsourced technical staff:
Why companies outsource
Source: Deloitte’s 2016 Global Outsourcing Survey
Source: Deloitte’s 2016 Global Outsourcing Survey
Keeping costs low.
You can save up to 60 percent in operational costs with outsourcing. As
you may know, a salary is only about a third of an employee’s
compensation. The rest goes to taxes, vacations, retirement plans, etc.
With offshore staff, you’ll be able to find skilled programmers for a
lower price. While you’ll have to pay for Total Cost of Engagement
including travel expenses, any communication problems, or additional
management on top, you’ll still spend about two times less than at home,
given that you reside in North America or Western Europe.
Finding expertise. You can widen your talent pool and find the experts in your specific field easier than by sticking to local vendors only.
Focusing on the growth.
Launching a startup requires lots of dedicated time and energy to make
important decisions, innovate, and generally do what your team does
best. By outsourcing you get an opportunity to figure out how to make
your business better and entrust technicalities to someone else.
However,
to make sure that your outsourcing activities bring you the desired
value, you should know how to choose and manage your partner.
- Define outsourcing goals and metrics. Clarify what expectations you have for a vendor, which tasks you want to assign to an outsourced team, and how you’re going to control the work. An experienced partner will gladly discuss with you every detail and suggest the best framework for successful cooperation.
- Make the right choice. Word of mouth is the best recommendation you can get for choosing a business partner. See what clients like you say about the company in question and find feedback at B2B rating websites such as Clutch.co.
- Have someone to internally manage outsourced relationships. Outsourced or not, the technical part of your initiative is a big one and requires management from your side. Someone has to conduct scheduled weekly meetings to verify the work done, answer the team’s questions, and provide instructions.
Start with scale in mind
The Social Radio, an app allowing you to listen to tweets, shut down due to scalability problems. In their post-mortem, the founders shared that they didn’t know how to scale the app and weren’t ready to maintain it anymore.
This
is a common problem for new ideas without established use cases. Even
though the people kept using the product, the team didn’t come up with a
strategy to help it stay afloat.
So, how exactly do you prepare your product to scale up before you decide to do so?
- Determine scaling potential. Is there a way to broaden your audience and make your product valuable to a larger group of people in the future? What about opportunities for additional funding? Can you see where your startup will be in three years or five years? These are the basic questions you should ask yourself.
- Spend extra time setting up your business. You wouldn’t hire workers before drawing a plan of a future building. If you take care of the cloud storage and sales infrastructure from the ground up, you will be able to grow, market, and hire faster, thus streamlining the scale up. Automate your organizational and onboarding operations. Don’t try to be an expert in every field and use software to manage your financial data like the invoicing platform offered by QuickBooks.
- Grow outwards, not upwards. Expand horizontally to keep the change gradual and under control. When you see that your model works for one group of users, try to replicate the success with another group and learn to personalize service to serve them both. Instead of acquiring more customers for the sake of growth, gradually increase your staff, services, and geographic coverage.
- Subtract as necessary. Sometimes, less is more. At the early stage, your tasks and operations may still be minimal but they shouldn’t necessarily magnify with growth. New processes will replace or completely get rid of old ones, and the old ones will slow you down if you stay too focused on additions.
The
key to scalability is to think big. You don’t have to consider each
future expectation in your prototype, but make sure you’re ready to
scale at any moment.
Prioritize customer experience
Great
ideas don’t mean anything if they don’t create an amazing experience
around them. An excellent experience cultivates an active and vocal
audience, and sets you apart from competing businesses in the field. The
experience provided by leading companies like Amazon and Google sets
the customers’ expectation bar high, so other companies fail to deliver
on them. Research shows that 25 percent of customers switch to a competitor after just one bad experience.
In their guide to customer experience, McKinsey highlighted three stages towards a customer-centered organization:
Observe.
The customer journey is a series of touchpoints from the first time a
user becomes aware of your product to onboarding and transaction.
Focusing only on one of these points and failing to see the whole
journey can result in satisfactory individual experience but
disappointment overall. Use analytical tools and metrics to determine
what truly matters to your audience and stay consistently good
throughout the whole experience end to end.
Customer Journey vs Touchpoints
Shape.
Returning to the Lean approach, design customer interactions according
to the feedback and continue refining processes as you receive more data
from the customers. The technology behind a personalized customer experience will help you automatically customize the content according to a user’s input.
Perform.
Keep a user-centered approach at the foundation of your business. Use
the existing customer journey to align your operational processes and
empower your employees to deliver on user expectations. Link the metrics
that measure customer success to your business outcomes and employee
KPIs.
Regardless
of your unique business goals and needs, excellent customer experience
is equally important to all startups. Instead of trying to fix the
customer and make them submit to your rules, change your company and
eliminate the problem in the first place.
Set the feedback loop
We’ve
already established that the iterative process is essential for a
startup and the learning part of your build-measure-learn cycle is
supported by the feedback you’ll receive from your audience. There are
numerous channels to help you connect with users and you can use all of
them at the same time.
Crowdfunding.
Platforms for crowdfunding are the number one place to connect with
your target audience and learn about their interests and struggles.
Choose a website where your customer group resides and where similar
projects run their campaigns. This is where you will display your
prototype and MVP to help investors find and support the launch of your
product. Write a strong message, share your page across social media,
and monitor the public reaction and commentary. Don’t go straight to
Kickstarter but research your options for possible perks. For instance, Indiegogo allows you to collect the money even if you don’t reach the funding goal, and EquityNet doesn’t charge any fees.
Website or app analytics. Users can tell you a lot even if they’re not telling you anything directly. By regularly reviewing your site’s traffic on Google Analytics or Kissmetrics,
you may find out how often they visit the FAQ page or whether it takes
too long to find the “contact us” section. By following a user’s journey
on a site, you can learn at which point they leave the page and what
stops them, for example, from finishing the purchase. These interactions
will tell you the things that a customer won’t be able to describe in
an interview.
Comment section.
Allow users to give you feedback in context and while they’re browsing
your site. Use simple forms to encourage people to share concerns and
current questions without contacting you via email. This way you’ll be
able to both get back to your prospective customers and learn what
questions you’ve left unanswered.
Social media.
Social channels help your customers contact you in a quick and informal
way and make it easier to have an honest conversation. By tracking your
mentions, you can react to complaints promptly, engage in discussions,
and learn about both positive and negative experience with your product.
Buffer actively reacts to help messages on Twitter
Surveys.
Constructing an engaging survey is not a simple task, especially
considering that people are not always honest when answering questions
anonymously. Marketers use surveys to learn about attitudes to a brand,
segment the customers, or help prioritize features with task analysis.
To make sure the response you’ll receive is actually helpful, create
purposeful questions. For instance, don’t ask how a customer found your
website if you don’t know how to use this information in the future.
Also, don’t bombard users with a list of open-ended questions. Rather
provide them with options and save the descriptive ones for last. Make
sure you time your surveys right: Don’t ask your first-time visitors
about the experience with the product right away.
Usability tests.
By observing how your customers perform the tasks and taking notice of
all inconveniences, you’ll be able to find the faults in your design and
recognize what can be improved. Read our previous article about conducting usability testing and effectively using the gathered insight to learn even more.
Customer Advisory Board.
Members of the CAB are the people who have already committed to your
product. They are the executives from your customer companies and the
members of your loyal customer base who can give you valuable and
detailed feedback. Since they’re interested in helping you grow and
provide better service, you can always expect recommendations of
substance and worthwhile advice from them. A customer advisory board is
usually convened once or twice a year for long discussion sessions that
lead to strategic changes.
“Be flexible, but stick to your principles.”
Eleanor Roosevelt
Startup
projects are born from passion but driven by discipline and the right
strategy. You can’t afford for your idea to die out just because you
weren’t focused enough on your own success and spent too much energy
overlooking what competitors are doing.
The
inability to be flexible made a lot of startups become extinct. Be
ready to adapt and change when customer feedback starts dictating your
new direction. If the change is promising to help you deliver better
experience and expand, embrace it and adjust your company. Empower staff
with metrics that will keep them motivated and focused on the desired
outcome. Prepare to scale beforehand and create conditions to make this
process painless and gradual. And if you want to stay loyal to your
idea, check your assumptions early on to make sure there’s a demand for
the product you’re trying to create.
Originally published at AltexSoft’s blog: “6 Tech Tips for Building a Successful Startup”
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