November 9, 2022
Typical IT startup mistakes: or how to avoid failure?
You'll definitely ask what's the purpose that only a few percent of many startups can play out. There are many factors, but the main one is humane. Organization, advertising, and consistency are the key to the success of any undertaking in business. However, some believe that IT is something that showers with money as you please. And this is the first mistake.
What difficulties await startups at the very beginning?
Before solving technical questions, firstly answer the following questions.
What do you offer your clients? What's the goal of your business? Do you want to establish an office on the side, or will you work from home?
The answers will help you find the right track of business for your company. The main task is to reduce risks. And it depends on whether you take just anyone or the specialists you definitely need into the team.
At this stage, when there is a limited budget, what's usually done is the following: at first, people try to figure it out on their own or with the help of their friends or acquaintances. Under no circumstances do this. If you can't hire a computer technician, get free professional advice. And, in principle, it's better to pay an expert for 3 hours than to pay someone less, but for 20 hours. Therefore, it's extremely important to invite specialists and do everything as it should be. Otherwise, a miser pays twice. You can pay the minimum to a friend who, after all, will piece everything together or to a novice freelancer on the stock exchange for technical specialists. And then you'll have to rewrite everything after them, not to mention that it'll take much more time. After all, they can tell you the time you want, but, for sure, the deadlines will be delayed eventually.
The leading concern of all startups is the lack of business culture. They want to excel first and foremost. However, without investment in qualified employees, everything leads only to chaos, and the result will be deplorable.
The primary mistakes of IT startups
Everything ingenious is simple, but not everything simple is ingenious. In fact, an IT startup and an already developed IT project is a pretty mundane business that merely has its specifics. We'll omit examples of deliberately false innovations or those that were originally created for further sale. More importantly, why do the live projects of ambitious individuals fail?
Analyzing the negative experience in building projects in the IT field, we can assume that investors don't always pay due attention to the analysis of common errors, and novice entrepreneurs continue to make mistakes when working on startups. Mistakes can be different. However, among them, there are the most common ones that can be taken into account when planning a business.
- Wrong niche choice
An investor needs to know the project niche choice: the team experience, understanding the market needs, or irrational factors.
Examples when startuppers choose a niche by mistake:
• Projects are formed in too narrow niches (to avoid competition), and this won't allow the project to scale in the future: the target audience will be limited;
• A novice entrepreneur is going to invent something new, not being an expert in their field, and not having many years of experience in it;
• A startup is trying to clone an already successful project without having financial, technical, and human resources similar in volume and quality to a prototype. While the clone is to compete with the original version in the same market.
- Lack of user knowledge
Sometimes startups say the following: our customers are the whole market; or let’s make a product that will definitely become successful thanks to the viral impact! To really understand what the market needs, you need to set up quality feedback with your potential users. Knowing how the team studies customers, you can predict the likelihood of project success in the future.
- Insufficient funding
The startup has been launched, but the project team doesn't have enough money to move to the next stage. The founders have likely miscalculated the necessary expenses and spent too much. And now they're looking for another investor in the project. An investor should think about sponsoring such a team. It's better for startuppers to immediately focus on the average market figures for this stage of the project so that at a crucial moment, they don't have to throw all their efforts in search of additional funding.
- Low qualification of developers in the team
A startup is more likely to fail if the team doesn't have skilled technical people. These may not necessarily be in-house employees for whom you will need to pay insurance and vacation payments. You only have to remember that the absence of good programmers can be a valid basis for an investor not to finance a startup.
- MVP lack
No matter how innovative the technology is, at first, this is essential to test the product itself. It's necessary to understand whether buyers are ready for this product and whether it'll be in demand on the market.
In startups, the creators regularly delay the product launch. They're striving to improve or modernize something. The question arises: is there any point in the product's existence that is in an endless stream of improvements and changes without entering the market and receiving feedback from users? For example, more options can be added after the product launch and its testing, when it becomes clear which features in your product are really needed by the market.
- Unduly stubbornness
If startuppers have already received quite a few rejections from investors, and the project idea hasn't been transformed, they might be so stubborn that they won't agree to change the product concept or business model even if the market is screaming for it. Here we must distinguish between unreasonable stubbornness and necessary perseverance. Sometimes it’s worth abandoning a brilliant idea altogether and doing something that will surely be useful to future users.
- Failed negotiations
When startups make more concessions to a business agent or fund to close the current round faster, this isn't always the right and profitable strategy. Contrary to startup concessions, investors may refuse to finance if they see excessive compliance and weakness in the founders' position in the negotiations. Thus, it's really essential to train the pitch before going to the investor.
- Shortage of prior agreements between the founders
If the founders haven't yet agreed among themselves and haven't signed agreements that detail the expectations of each of the parties and the legal relationship between the founders, then, due to internal proceedings the project in the future may experience difficult times. Experienced investors and startups will likely be able to supplement this list with their examples of common mistakes, the elimination of which will significantly increase the chances for project success.
How to build an efficient workflow?
Every startup begins with a small team or even a single enthusiast, so networking and referrals are influential. That's why it'll be more leisurely to complete a group of individuals you trust. A suitable team easily joins both soft and hard skills. Based on the activity field, such a team should include a technical director who comprehends dry figures, a sales manager who will develop cash flow, or a single individual who will speak with users and get feedback. Also, the functions and authorities that team members obtain are meaningful.
The operation scheme in each organization and group has been built independently. For some startups, rigid vertical management is appropriate (and it's typical), and for some, in contrast, employees must expand horizontally and agree on decisions together. Anyway, there should be no mess: someone should be in charge of significant areas. The founder should be able to outsource some functions, and leading managers should be able to separate the work then. Required elements should be a dashboard and precise work planning. Moreover, investors often require to see a dashboard, and only after that they decide to allocate funds.
Make your product cozy
Today's startups can't put aside the issue of a comfortable and user-friendly design experience. You can't create products that only the programmers who created them can understand their interfaces. Remember that other people will use your development. Therefore, just like with customer support, you should consider finding the right UI/UX designers for you, which is an integral part of a fast-growing team of a technology company.
A product should be attractive because users like good design. They may not consciously notice this design, but subconsciously they'll choose a more visually beautiful solution. The second part of success is convenience. If you've developed a mobile app where it's impossible to hit a control with your finger, it'll be removed after the first five minutes of use. Yes, it may seem unfair, but it's the users who decide whether your product should or shouldn't be, so it's worth even holding a focus group to their amenity tips.
In conclusion, we'd like to add that an IT startup, like any other new business, is always a risk. For a project to be successful, you must consider many factors. Of course, not everyone is ready for this. At the same time, many developers are launching dozens of promising startups. Nevertheless, real success at the international level comes only to a few. And by contacting our company, you can't only avoid risks but also create a high-quality project that will definitely become successful!
Have a business idea?Meet our CEO