4 Things Every Entrepreneur Must Consider Before Founding a Software Startup
Between most successful software entrepreneurs, if you have a unique idea and the mantle to pursue your drive, there are very few obstacles that can force you into conceding your goals. But few as they may be, these obstacles must not be taken lightly. Many of these challenges appear in form technical, legal, financial and administrative constraints that most startups fail to recognize during their infancy stage. With 2019’s software hype picking up steam, a majority of entrepreneurs, business owners, and SMEs are taking on more researched and fail-safe strategies towards their software startups.
Here are four infamous challenges tech startups face today and the best approaches to overcome them.
You Don’t have to be a Developer
It’s a common myth among the entrepreneurial community that for software startup to succeed, the founders must hail from a technical background such as development, coding or IT. This simply is not true. A tech venture that has to flourish demands a lot on the table than just a technical background. For a software startup, your idea is what matters essentially. For instance, if you bring an innovative solution to help solve the transportation problem, you can still open a software firm to develop an application like Uber without personally learning how to code. The key is hiring the right talent to understand and translate your ideas into tangible solutions.
That said, learning a bit of coding can smoothen things for you. Transitioning to coding may help in certain processes when you’re vetting on talent, finding complex solutions, synergizing with your development team or even calling out employees who are wasting your time and resources.
You Need Your Team as Much as They Need You
Your startup idea will not create on its own and needs a proper team to materialize it. According to most tech experts, finding the right talent plays a big role in deciding the success of your software startup, especially if you are pursuing an application-based idea.
The right talent is a key determinant of your startup’s initial progress and serves an essential part of your software firm’s team building process. You will need the right combination of skills, experience, and personalities within the roster to stimulate a positive work environment and promote productivity at the same time.
This necessitates the presence of a captain to lead the team and give them direction. If you are that captain, then you must make sure that your team acknowledges your leadership at every stage of your business plan.
According to Salim Ismail, a Canadian serial entrepreneur, angel investor, author, speaker, and technology strategist, there are four major roles that make up an ideal roster for a software firm.
1. The Visionary and Dreamer: That’s you or any of your partnering founders who leads the team to the supreme vision.
2. The Customer Champion: The person who will test your product from the spectacle of your target customer.
3. The Innovation Architect: The hard-coder who mixes technologies to build the product and maintain the company’s competitive edge in the market.
4. The Rainmaker: Your most trusted finance wizard to look after the company spending and returns so it can grow at a sound pace.
Build an Airtight Business Plan and a Strong Legal Foundation
This is where most software entrepreneurs stumble.
If you have a tech idea worth developing into a startup, you must make sure it can grow, attract funders, employ people, issue shares, and support every operation business is capable of. This is why choosing your startup’s business activity, business plan, legal structure, and the right business vehicle takes up the most crucial part of the entire process. You must vet the right sector to start your software firm, create a business plan to put your ideas to concrete terms, decide its legal forms such as LLC, C-Corp or S-Corp, and enter a jurisdiction such as mainland or free zone. A well sought out legal foundation can help you scale your business faster, improve risk management and prevent common pitfalls that most entrepreneurs overlook. Moreover, it also gives you the flexibility to adapt and change your business model when the time is right.
To successfully convert your tech idea into a functional product, you must take measures to make it legally secure by protecting your intellectual property and using the right marketing and sales practices. This may require consulting a good law firm or a business setup agency to properly take every into consideration.
Research Your Market Well Before You Launch Your Product
Many software entrepreneurs are known to make this fatal flaw when establishing their startup. Studying the market not only trains you to understand your direct and indirect competition but helps you in preparing a better and sounder proposition to your target customer. With the software industry now a major stakeholder in 2019’s global economy, any entrepreneur planning to establish a tech startup must carefully vet the market before even designing the product.
You must learn about the demographics and psychographics of your potential customers, identify their pain points and understand buying habits to define a competitive edge for what you are offering. Knowing your customer’s pain points is the key to understand where the market falls short, what the customer demands and how effectively you can fix the problem. This helps you in specializing your software product and developing adaptive strategies to penetrate bigger markets and thrive in newer environments.