Over the years, the technology industry has evolved into one of the fastest growing industries, accounting for more than 3 of the 5 most valuable brands in the world, powering some of the fastest growing companies, creating new billionaires and like you, so many people have been inspired to start their own tech companies.
From California to Lagos, a number of tech enthusiast inspired by the success of big technology companies have taken on the steps to build their own tech start-ups. And while many of these technology companies have been successful, a large number of the have also packed up.
For a beginner who’s about to dive into starting their own technology firm, it’s important to understand the nuances that’s been a huge part of the technology start up stories around the world.
While there’s never been a single story for tech companies, there are certain nuances that’s shaped the success and failure of most companies in this sector. And while putting all of this into consideration, in this guide, I’ll be showing you the steps you can use to build a tech company from scratch.
Find a Viable Idea
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This is cliché. The first step to start a tech company is to come up with a viable tech idea that has a growing demand by a specific audience in a specific geographic location.
In Nigeria and Africa generally, there’s a growing demand for tech innovations in areas like energy, education, finance, agriculture etc. You can consider picking up an idea in any of these niche.
When you’re able to create a tech business idea, you can then go ahead, craft a solution that will take care of the demand adequately before you can then consider the best way to deliver this for your target audience.
One thing I want you to keep in mind while coming up with an idea is that you might come up with something considered a million dollar idea but there really isn’t any million dollar idea on paper. The best million dollar idea is the one that is already being implemented and right on its way to making the next million dollar.
Make no mistake, I have worked with a number of entrepreneurs that once had what was termed, ‘a million dollar idea’ which later flopped. I have also worked with those whose idea did not look so promising but their hard work and effort coupled with a sustained market demand over the years later pushed them towards the million dollar mark.
So, do not sit back and expect that having a promising idea is enough. You need a viable idea with real time solutions that people are actually looking out for. This is the idea you can start a business with.
To get started at this stage, you might want to ask yourself questions like, what is my idea? What problem am I solving? Who is specifically having this problem? How are we different from the other brands solving this problem?
Conduct a Market Research
Before you start a tech company, you want to know exactly what the market stat says and how this is going to affect your success.
According to several research data, inadequate market research has been identified as one of the top reasons why businesses fail. This is applicable to nearly all regions and locations, regardless of market sizes.
This is because market research is important when it comes to understanding your audience so you can create a solution that meets their needs exactly as it is.
It also extends to understanding your competition, their strategies and how you can align your own strategies in a way that sets you apart while still driving profitability.
So many businesses have failed due to inadequate market research. Take for example, an idea could be great in paper but without a proper market research, you can’t really identify an actual need for the idea.
Also, outside identifying a demand, you need a proper market research to understand the sustainability of the business in the long run.
That said, while trying to conduct a market research for your idea, you have to pay attention to the following key areas:
What are the customer needs? Conduct a research to find out your customer’s pain points. You can speak to them directly to find their pain points etc. you can also use questionnaires etc. to find out their exact preferences.
Who are your competitors? Find out some key details about your competitors both locally and internationally, including their areas of strengths, weaknesses etc.
What is the industry trend? Identify the key industry trends at the time and how you can make your idea a best fit for such trends.
Identifying these key areas will give you a further insight on the viability of your idea. Remember, the higher the demand, the more potential you have for the idea.
Also while doing this part of your research, look out for key economic variables like the purchasing power of your target audience, established infrastructure and other market demands. This is very important.
Create a Business Plan
Successful businesses don’t sprout up overnight. They are oftentimes a product of well thought out market research, planning, implementation and effort.
As you take steps to start a tech company, you need a solid business plan that will serve as the blueprint for your business.
A well-structured business plan can also help you when it comes to getting investors, attracting funding or even navigating your business to success.
Among other key areas, your business plan should have key components like:
- Executive summary, containing a brief overview of your business
- Market Analysis, expanding on the insights from your market research
- Financial Projections, offering insights into how you’ll fund the business, including income, expenses etc.
- Marketing Plan, covering the steps you’ll use to attract customers, make sales, grow the business.
There are a handful of segments you’ll need as part of your business plan. I’ve covered a complete guide to business planning on this page.
One of the most important things to keep in mind while creating a business plan is that your business plan should not be ambiguous. It can be a few line realistic plans on the realities of the idea, market demand and the steps you’ll take to attract your core business goals.
Register & Regulate your Brand
As a tech start up that aims to be seen as credible and trustworthy, you need to register with an identifiable government regulatory agency like Corporate Affairs Commission, among other regulatory agencies in the specific niche you’re starting in.
This is very crucial as you may not be able to operate successfully without getting registered or obtaining the required operational licenses.
This registration can also expand to areas like copyrights protection, Patent and design registration etc. Depending on your idea or target industry, it might be absolutely important to look into these other aspects of registrations as well, before getting started.
Beyond registration, there are specific legislations in some specific industries. In the Fintech industry for example, we have the Money Laundry Act, Nigerian Data Protection Act etc. Your business operations must comply with the regulations as set out under these laws.
Specifically, what you want to keep in mind before you start a tech company in Nigeria is that while there are pre-registration requirements like a unique business name, business structure, personal identification documents etc., there are also post registration demands.
And one of these demands is that your start-up must comply with the industry regulations, at all times otherwise you may run into issues.
Raising Funding
I always advocate that one of the best ways to kick start a business is to bootstrap. Based on available data, I believe it makes more sense to fund a business that is already viable especially in a very risky market like Africa and most developing world.
As a business founder this approach can give you better chances at getting investment from external entities however in a cash strapped economy like what we have in the developing world, you need a lot of funding to build the next top three tech business.
Most founders may not necessarily have access to this kind of funding that is why it is crucial to get external funding for your idea in most cases.
That said, the following are some of the popular ways to raise funding for a start up:
- Bootstrap: This is my absolute favourite. A lot of successful businesses like Apple, Facebook, Amazon etc, were all bootstrapped however you must save up if you plan to use this as your source of funding. You can also bootstrap at first and then obtain other funding sources much later.
- Angel Investors: There are a number of angel investors and high net worth individuals interested in investing in early start-ups, in exchange for a stock or a piece of the business.
- Venture Capital: There are venture capital firms investing in startups and small businesses. Even though these firms are not equally distributed across regions, these could also serve as your top funding sources.
- Government Funds, Grants: A number of funding opportunities exists in both government and non-government organizations where grants are offered small business founders, depending on the viability of their ideas. This might be competitive but it’s always one of the best options you can get to invest in growing your business without parting with your stocks.
- Crowdfund: Although crowd funding is not yet very popular in most African countries, this is still one of the options you can explore while you’re getting set to start a tech company.
Keep in mind that getting funding can be quite difficult. In fact, inadequate funding has become one of the top reasons for most business failures but with a viable idea, hard work and effort, one can always scale this.
Build your Team
It might sound sexy to start a lean start up but you can’t do the whole work yourself. So, you need a team. But, beyond just any team, you need a strong viable team that will deliver on your business needs.
When you’ve put in everything in place to start a tech company, some of the key roles you’ll want to hire will include software engineers, product managers, marketing experts, customer support etc.
While hiring these roles, you want to have a clear goal about your ideal staff, their expected deliverables etc. with this in place, you can always look out for potential candidates with the capacity to deliver on these variables.
Depending on your resources and available funding too, you want to build a team that will not just deliver for your brand but ones that will be loyal to the business in the long run.
Build Your Product or Service
Now that you have a team in place, it’s time to turn your idea into a product or service.
Some coaches will expect you to go ahead create your product or services right away but this is always dependent on one’s peculiar reality and industry.
However, regardless of your industry, you’ll still want to get people’s feedback about your product or services before launching it full out so you can make it to aligned with your target audience’s needs.
So with that in mind, you’ll still need a minimum viable product or a beta version of your business idea where you’ll use to measure your audience’s response, preferences etc.
If you’re in the service sector, this could come up in terms of actual soft launce or service delivery for selected clients to see the market reaction.
Pay attention to your target audience’s feedback when you’re in this stage. Their feedback should guide you in iterating, making the necessary changes before launching out fully.
It will also give you further ideas about things like list price, feature preferences etc. and when used well, this can further bolster your unique selling point, differentiating you from the other businesses.
Marketing & Promotion
If you want to start a tech company and grow it in a developing economy, one of your best bets is to invest heavily in marketing and business promotion.
You cannot afford to ignore marketing. Because the moment you do, you might not be able to attract new customers, users, etc.
That said, there are many strategies to promote and get your brand in front of your target audience. This includes both free and paid strategies like:
- Social Media Marketing: Including paid and free promotions across social media platforms popular with your target users
- Search Advertising: This involves advertising across the search engines like Google, Bing etc.
- Influencer Marketing; Using influencers across popular web platforms to introduce your brands to your target audience.
- Search Engine Optimization: This is an organic strategy that can lead you to gain sustained traffic and visibility from the web.
There are a number of other advertising options including sponsored posts, media outreach, interviews with top media organizations etc.
The promotional option you’ll choose should be dependent on your resources and core business
Scale and Grow
As soon as you have successfully set up your start up, and the business is up and running, you want to focus on taking strategic steps to scale and grow it.
This will include setting up strategies, partnering with others or even expanding to other regions outside your key city of focus.
While you’re at this stage, it is important to get to a certain threshold of success before taking some specific steps. For example, before extending to specific regions you have to get some good grasp on your key focus market.
Also, before getting partnerships for example, you have to set in place some frameworks that will sustain the business with the coming of new partners. This is very important
Finally, where you want to scale by adding new product offering, be sure that such offerings complement your current offerings while ensuring there’s also a clear demand for it.
Final Words
Starting a tech company is not only an exciting journey, it can become one of the most fulfilling steps you’ll ever take but to be successful with this journey, you have to pay attention to the steps in this guide.
In addition to that, you must innovate or fizzle out. Also, you want to also pay attention to your journey. Find out what you’re learning about your business, key industry trends, insights and stats to align your business for even more better outcomes.
Additionally, follow the law. Make sure your business is compliant with industry regulations. This is very important.
Furthermore, remember regardless of your location, building a successful tech company takes a lot of work, efforts and guts. You’ll need to take this along with you.
And finally, you don’t have to work alone. Work with our team, let’s guide you all the way to the next big thing in tech. contact us here.
Now its your turn. What are your biggest challenges when it comes to building a tech start up? Drop your comments below.
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