What makes or breaks a Tech startup?
by Tracy Monday, Sales & Marketing Director, Xeocom
Startups come in all shapes and sizes. Some bootstrapped, born out of a single person or a couple of like-minded individuals who see a gap in the market and have what they see as the perfect fit. Others are spin-offs from larger enterprises that are funded by that parent enterprise, or they can be a combination of a ‘light bulb’ moment for an individual and a spin-off that’s externally funded.
What makes being a startup in the Tech sector more challenging is the speed of change that our industry is experiencing. No other industry has a landscape that shifts and is evolving at the pace the technology industry is. Change and innovation can be almost instantaneous and can be as a result of just one individual or a single app. So quickly can today’s news be tomorrow’s chip paper (a legacy saying for those not familiar with UK sayings), that any startup but especially one in the Tech industry needs to be on the ball from the outset or risk being a sad statistic and fail.
Technology itself presents us with a vibrant and agile business playground, an entrepreneur’s paradise.
So quickly can today’s news be tomorrow’s chip paper
So why you? What uniqueness do you bring? How are you going to make your mark?
I have created a series of mini-blogs outlining some of the key categories that any business, but particularly a startup in the tech sector, should be doing. Much of the material you might think is obvious, but it’s amazing how often the obvious is overlooked.
Depending on what you read or whom you know, the number can range from five to ten core areas for consideration. I will focus on five topics and over the coming weeks I will provide insight on each of these individually.
1 – You and The Plan
Be Honest – what do you want from this venture? This is not a time to be general or make bold altruistic statements. What do you genuinely want from this venture? Freedom, a lifestyle change, to create something amazing that you can get to a profit and sell on, to create something amazing that you can leave as a legacy. Why are you doing this, what and when is your OUT? Be honest and then create the plan.
Your plan will determine futures, not just for you but for those you employ and those you engage with on this adventure. It is an adventure because no matter how clear and thorough you are with your plan, the world will throw up all sorts of unplanned and unforeseen obstacle that you’ll need to manoeuvre through. And lets face it, you will always underestimate how hard it is to get off the ground, everyone does!
You will always underestimate how hard it is to get off the ground, everyone does!
Your backers – Are you going for backers or bootstrapping? Bootstrapping tends to be good for a short period of time but can be a limiting factor with growth or even staying solvent. Money is not the only consideration when looking for backers. You need chemistry, mentorship, a shared vision and evidence they have done this before. Who and how you partner with is one of the most critical decision you will have to make, so be informed.
2 – Finance
Cash flow is King – recent research suggests an estimated 90 percent of businesses that fail do so as a result of cash flow problems. This will be your ‘number 1’ challenge but not your only challenge. Finance is not just about getting money in (which always takes twice as long as you budget for) but it’s as much about what you bleed out.
3 – People
Resourcing right – selecting your first key employees will define the style and culture of your business. Not everyone is suited to an SME, no matter how good he or she may be or how well you know him or her. Flexible, adaptable, versatile, self-motivated, … the list goes on. Selection is so important and if done well these first few individual are likely to form the basis of your management team as you grow.
4 – Commercial Management
The product – what is it? How is it priced? How is it supported? How will you distribute it? What’s the best sales approach, direct/indirect/online? Who’s going to sell it? How are you going to attract the right sales resources (salaries, commission plans, benefits etc), what experience do you have in sales and sales recruitment, do you need help? Do you have good commercials in place (SLAs, contracts, etc)? What is your sales strategy (vertically-aligned, B2B, B2C)? Your sales strategy and sales function is the lifeblood of the company, you need to get it right.
5 – Marketing
Your ‘Shop Window’ – arguably the most complex area for a start up to master and one which almost always ends up as a series of ‘making do’, then refine, then go again. Marketing touches all areas of the business and can have a massive positive impact on sales when effectively aligned. Marketing must have its own plan, it’s sole purpose is to deliver against the sales and business plan. Your message, the multiple avenues that marketing will utilise (branding, web, research and analysis, social media, events, exhibitions, PR, channel, and many more) will drive your exposure that in turn drives revenue.
Marketing touches all areas of the business and can have a massive positive impact
Marketing is a suite of activities and not one single thing or activity done in isolation. All too often it’s an after-thought in many startups, all the effort goes into getting the business up and running. But why does this really invaluable part of your entire plan not take centre stage? There are countless studies on the subject and in most cases boils down to two key reasons; firstly a general lack of understanding of the power of good marketing which mostly happens because of a misplaced belief in the product’s ability to sell itself, it’s that good! Secondly, cost. Yet astonishingly, 64 percent of startups admit that how they present themselves at the three-year mark is vastly different from where they set out.
Five easy pieces
This series will address each of the five topics in much more detail and include hints and tips on how to avoid the pitfalls and accelerate the outcomes. You cannot afford to miss this set of articles!
Tracy Monday is not only the Sales & Marketing Director of Xeocom but also the Commercial Operations Director for Cloud Gateway, a firm which is still in its early stages having been founded in 2017.
Having joining the IT industry in the 90s, she has been part of what can only be described as a Time Tunnel journey to now. She has been privileged to work with some extremely talented individuals and forward-thinking businesses, large and small.