Ritam Gandhi, director and founder of Studio Graphene, shares some advice to help tech entrepreneurs safeguard the longevity of their businesses.
The UK rightly receives a lot of praise for its startup ecosystem, with new businesses emerging at a tremendous pace across the country. In fact, last year alone saw 589,000 new companies established in the UK, while between 2012 and 2017 a total of 3.5 million startups were launched.
Tech, in all its wonderful guises, has been at the heart of this explosion in entrepreneurial talent. The often-quoted stat from KPMG claims that a new technology business is formed somewhere in the UK every hour.
However, without wanting to be the bearer of bad news, there are other important figures that tell a fuller picture.
The latest data from the Office for National Statistics shows that more than 328,000 UK companies died in 2016, which represented 11.6% of the nation’s business population. Unsurprisingly, early-stage firms are most at risk of collapsing; figures tell us that only 53.7% of companies formed in 2013 were still in existence by 2017.
The question, therefore, for those running young technology businesses is this: how can they ensure their startup is still alive and kicking in three, five or 10 years’ time?
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There are, of course, dozens of valuable pieces of advice that entrepreneurs should take into consideration. But during the four years Studio Graphene has been running, and by coming into contact with ambitious startups in the tech space on a daily basis, here is what I’ve learned so far.
Keep focused on a specific audience
When developing new tech based products or services, it’s vital that startups do not try to please too many people all at the same time. Particularly in the very early days of the business, the best option is to focus on a very specific audience and ensure the tech works for them perfectly.
Having come up with the idea for a new product or service – and then invested time, money and effort to turn that idea into a fully functioning piece of technology – it is easy for startups to get carried. So many entrepreneurs make the mistake of looking too far ahead, thinking of new iterations of the product, different revenue streams or diversifying the customer base.
While tech startups need to have a solid idea of their future roadmap, such long-term thinking at the very beginning of the journey can be dangerous. Instead, businesses that are just launching to market must pour their energy into making their tech product do what it is meant to do as well as it possibly can. Thereafter the focus must be on building a solid base of users who are happy with the product; only when this foundation has been established can a startup afford to think of its grander plans.
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No entrepreneur is an island
One of the best things to come out of the explosion of new businesses emerging across the UK is that there are now well-developed, mature startup communities. What’s more, there are also broader support structures available for people to learn about how to grow their business. In turn, this means that young companies have a plethora of places to turn for advice and guidance; UKTN itself is a perfect example of this.
However, in order for an early-stage tech business to take advantage of the support networks around them, its leaders have to be modest; they must appreciate where their strengths and weaknesses lie, as well as the gaps they have in their knowledge. Only when they have identified potential problem areas can entrepreneurs set about addressing them, either by seeking informal advice, hiring new talent in-house, or working with external agencies to build a more complete, multi-disciplinary team.
This is particularly important in the tech sector. Here, individuals may have a solid grasp of the technical skills they need to develop a product but are less confident executing a marketing or branding strategy. Conversely, someone may have a fantastic idea for a tech product and know how to take it to market, but require help in actually building the solution.
Networking sessions, talks, dedicated news sources, co-working environments, accelerators, incubators, specialist startup tech agencies – all these things exist to help a tech startup flourish, so entrepreneurs must embrace external support and lean on it whenever they need to.
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Even the best laid plans…
The old adage goes: ‘if you fail to prepare then you should prepare to fail’. To be honest, in the world of tech startups, even the most diligent and organised business should still prepare to fail.
Building a new technology and launching it to market is a very difficult task. Even if you outsource operations to specialist agencies that deliver on time and on budget, there will almost always be unforeseen obstacles en route that mean the initial roadmap has to be amended. There will be glitches, faults, ideas that need to be re-considered, functions that must be re-built, business models that have to pivot. And as a founder of a business, the highs will feel higher, but the lows will feel a lot lower.
But this isn’t a problem if people adopt the right mentality – entrepreneurs must openly accept that failure in one form or another is likely. Furthermore, tech startups ought to create buffer zones in their timelines or budgets to enable them to adapt to the challenges that occur without unnecessarily skewing their broader plans.
What these three pieces of advice illustrate is that so much of making a success of a business comes down to an entrepreneur’s mind-set. They must have the ability to remain focused on very specific goals without getting carried; the modesty to seek help when it is required; and be adaptable enough to take failures – big or small – in their stride.
If an entrepreneur launches a tech startup with these things in mind their business will undoubtedly improve its chances of not just surviving, but thriving.