The right way to build a tech business
What’s the right way to build a tech business? Having helped to build Apadmi from the ground up, and since then working with many entrepreneurs and digital start-ups, we asked our co-founder and CEO of Apadmi Ventures Howard Simms.
So far on this blog I’ve covered the wrong way to build a tech business in a lot of respects. So, what’s the right way? Here’s my quick breakdown of the main things you need to do, or have in place, if you want to make your company a success.
1. Have your brilliant idea
You can’t build a tech business without a concept behind it. After you’ve had your epiphany though, do the right research to ensure it is a unique idea, and you aren’t copying something already well-established in that marketplace.
2. Get close-knit investment
Start getting people invested in your idea – family, friends, local business owners you know or people in that industry. Use savings or friendly business angels to start raising the initial capital you need to get things off the ground.
3. Validate the idea
Do what you can to see that your idea resonates with the target audience, but more specifically, the users within that target audience. They might have specific needs or requirements you hadn’t thought of – focus closely on your customers or users.
4. Get big investment
We’re not talking pennies this time, but hundreds of thousands of pounds. This is the stage where a lot of entrepreneurs fall down – if you want to build a tech business well, don’t underestimate how much it costs. Sure, anything can be done cheaply, but should it? Build great tech, built it once and market it well. Raise those extra funds now too – if you think it will cost £250k, have £500k in the bank to accommodate changes.
5. Surround yourself with great people
Hire skilled people who are incentivised for your success – you need people who are great at what they do who also believe in your idea and want it to work. In terms of advisors, consultants and investors, get people on-board who are more experienced than you. You’ll often be too close to your idea. You might not want to let go of some aspects you had planned, but it’s critical you take negatives as well as positives from these individuals, as early as possible.
6. Drive it forward
You’ve got the tech, the people and the right input – now drive it. Drive users, customers, revenues – if you want that next big investment, you need to show there’s a market for your idea. Create those partnerships that are going to give you credibility, get buy-in from people in that field, and market your idea like crazy.
7. Get a round in
Now you have the figures to back up your concept – now, get your meaty investment round in to expand your offering, build enhancements and greater functionality for your platform. You’re in the tech world now – things move quickly, and you’ll need to keep evolving if you’re going to survive in this industry.
How NOT to build a tech business
Let me finish by giving you my top three “don’ts” when it comes to your own start-up…
- Don’t opt for a sweat equity deal – this is where an agency or individual agrees to deliver a solution without payment involved. Instead, they ask for equity in your business. You can read more about why you should stay away from this in my other post.
- Don’t take just any investor – they need to be a good fit for you. Do you like interacting with them? Do you get a good feeling from them? If not, walk away.
- Don’t lose focus – emotion is important in business. Directed positively, it’s that passion and determination that will help it succeed, whilst your gut instinct can prove invaluable in certain situations. But negative emotion is no use to you at all. Try to leave emotion out of business dealings where you can.