If you have intimate knowledge of the tech industry, you may want to learn how to start a new technology startup business. Competition in this industry is extremely intense, and only about 8 percent of new tech startups succeed. It’s not enough to have a good idea for a social app or a website; you must have practical knowledge of how to start and expand a business. The vast majority of tech startups fail because they expand their businesses too soon and put too little focus on the fundamental value their products bring to the market, according to the website Techli.
Tech startups need funding from investors to pay for the thousands of work hours that go into developing a product. These businesses don’t need much physical capital, such as assembly lines or raw materials, but they do need computers, office space and Internet service. With seemingly so many young entrepreneurs becoming overnight billionaires, the temptation to invest months into a tech startup lures many young dreamers who may not have the discipline and business savvy to stay afloat.
How to Get Funding for a Technology Startup Business
Without business connections, your startup funding options are limited. You can post your startup idea on Kickstarter, a site where businesses receive small amounts of money from a lot of people who feel passionate about the startups they invest in. Many little-known tech startups got their funding on Kickstarter, and one well-known graphics company called Oculus Rift started out this way too. Kickstarter can be a good source of capital, but you will probably need other sources too. For many entrepreneurs, these sources might be savings, loans or credit cards.
The government offers startup capital in the form of grants. According to Forbes, you can apply for government grants offered for a variety of business types. Usually, grants are offered to help disadvantaged or underrepresented demographics start businesses, so if you don’t fall into one of these categories, you might not receive any grant money. However, you can start a new tech business without grants or funding from investors if you know a group of people who are as dedicated to the project as you are. If your partners are willing to work for free in exchange for a percentage of profits, you can develop your website or app from home. Depending on your home office setup, you may be able to claim these expenses on your tax returns.
How to Find a Technology Startup Business Idea
Over the course of a tech startup career, many entrepreneurs start several unsuccessful businesses. The product you create must be useful to your customers, and the more useful it is, the more opportunity you have to make your business successful. Since the tech industry changes rapidly from year to year, many businesses chase trends in the hope of hitting the jackpot. This strategy isn’t necessarily wrong, and a few businesses have made millions by chasing trends. However, if your product is only useful for a month or two, you must constantly find ways to repackage it to stay in business.
Related Resource: Chief Technology Officer
With only about an 8 percent chance of success, starting a tech business requires more than luck. If you strongly believe in your project, you should consider committing to the funding and work needed to start a new technology startup business.
