How to Create a Tech Startup in 10 Steps?
- What is a tech startup and how does it differ from a traditional business?
- 10 steps to create a start-up
- 1. Business idea
- 2. Market research and planning
- 3. Launch strategy
- 4. Establish a technical team
- 5. Craft a Product Requirements Document (PRD)
- 6. Develop a Minimum Viable Product (MVP)
- 7. Work out a business plan
- 8. Naming and the legal side
- 9. Brand identity, website, and launch
- 10. Marketing strategies
- Examples of successful startups that grew into full-fledged companies
- Useful resources for startups
- FAQ on startup launching
- Wrapping up
Over 500,000 startups emerge every month in the U.S. alone, and every entrepreneur dreams of repeating the success of Amazon or Facebook. The bad news is that 90% of them fail. Why? Primarily due to the lack of market need for the product they offer.
Apart from the feasible idea, a successful startup requires a thought-out strategy, planning, and execution. If your mind is burning with some innovation, you should know that initiating a tech startup in 2024 can be favorable for several reasons.
- A restoring market growth. Many companies expect software sales growth in 2024. While in 2023, numerous tech organizations sought to optimize their expenditures, now they strive to expand, not least because of the development of AI.
- Venture capital has reached its lows. 2023 brought a decline in the venture capital market. However, experts forecast a turnaround in 2024.
- Tech-driven efficiency. AI technology can help more emerging companies become capable of attracting investment and attaining established valuation marks.
How to start a startup business? We explain this in our article, bringing inspiring examples and suggesting handy tools for entrepreneurs planning to build a tech company.
What is a tech startup and how does it differ from a traditional business?
A tech startup is a newly established business that focuses on developing innovative technology products or services to market. These emerging companies are characterized by their emphasis on leveraging technology to address specific problems or needs in various industries. The fundamental attributes of tech startups include their agility, risk-taking, rapid growth potential, and disruptive approaches to business.
What are the core differences between a start-up and an established business?
- Business model. Startups usually seek to develop new business models that have disrupting market potential or even create markets, while small businesses usually work within established markets and existing business models. For instance, Netflix created a new business model in the entertainment industry by shifting from a traditional DVD rental-by-mail system to a streaming subscription service.
- Growth strategy. Startups often pursue swift growth and scaling, whereas small businesses mainly focus on resilience and sustainable development. Snapchat emphasized novel features like disappearing messages and stories to gain rapid popularity among younger communities.
- Financial sources. As a rule, startups strive to attract external funding, like venture capital or angel investment. Traditional businesses typically utilize conventional financing sources such as bank loans or individual savings. Stripe, for instance, has undergone multiple funding rounds and attracted significant external investments from venture capital firms such as Sequoia Capital, Andreessen Horowitz, and Tiger Global Management.
- Focus on innovation. The goal of most startups is to represent new commodities or technologies, whereas small businesses rather enhance existing products or services. Thus, SpaceX developed and launched innovative space technologies, namely, the Falcon and Starship rocket series, and executed missions for NASA and other commercial clients.
- Risk-taking. Startups are ready to take risks much more than traditional small businesses. The latter category seeks to minimize risks and maintain stability. Tesla introduced electric vehicles at a time when the market was dominated by traditional gasoline-powered cars. The idea was risky and challenging, including the need for substantial investment in battery technology and charging infrastructure.
10 steps to create a start-up
How to start a startup tech company? We have shaped a practical guide consisting of 10 strategic steps. You can delve into deeper details, of course, but these essential stages will give you a clear vision of the entire process.
1. Business idea
Behind any winning business lies an exclusive and sturdy idea. Nonetheless, it should also have a strong commercial capacity.
How to distinguish an excellent idea for your startup?
- Identify the existing problems;
- Select the most meaningful one for you;
- Invent an innovative solution.
2. Market research and planning
Once you have shaped the idea for your tech startup, it’s time to plan its execution and explore the market. One of the first steps to create a startup is to develop an adequate market strategy.
Your research should include:
- Examining the market to validate the business idea;
- Identifying your target community;
- Studying competitors.
This step is vital to create a highly relevant, market-driven offering.
3. Launch strategy
The launch strategy entails developing a robust value proposition. Based on that, you would formulate your specific offering and determine the ways to reach your target consumers.
By planning your go-to-market strategy, you can also reveal the opportunities to optimize your product from an early stage, which would later allow for accelerating your business.
4. Establish a technical team
If you are going to start a tech business, you’ll necessarily need competent tech specialists. Building an efficient team may be challenging for startups, especially for those with tough budgets and time constraints. Recruiting, hiring, and maintaining a tech team takes significant resources.
Then, how to build a startup team swiftly and for a reasonable cost?
Professional software development agencies can help you select and hire appropriate staff for your project. Coreteka provides various services in the sphere of employing personnel. One of the cooperation models we utilize is outstaffing, which is especially favorable for startups.
Learn more about IT staff augmentation.
With outstaffing, customers get remote teams hired through external providers that work on specific projects. The customer controls the development process and directly communicates with the team. All the recruiting hassle rests on the provider’s shoulders. The team can be quickly assembled, extended, or reduced, according to the customer’s needs. Finally, outstaffing takes considerably less time and expenses than hiring and supporting an in-house team.
5. Craft a Product Requirements Document (PRD)
The purpose of this document is to describe the fundamental aspects of your product, outlining the product’s goal, features, and capacities. This description will direct the entire team’s work throughout the product life cycle, including the design, development, marketing, and consumer support stages.
6. Develop a Minimum Viable Product (MVP)
How to build a startup while minimizing risks?
Although risk is inherent in any tech startup idea, there are ways to remedy it. MVP is the basic and simplified version of your product, which is substantially quicker and cheaper to build. At the same time, it allows for testing your idea as well as the consumer interest in your product.
An MVP involves product design and development, where the tech team formulates requirements, crafts the prototype, and checks it with end-users.
What will an MVP provide to your startup?
- Early leads;
- Consumer feedback;
- Time and money savings.
7. Work out a business plan
A business plan is a detailed life path of your project. It encompasses all business aspects, such as goals, strategies, timelines, financial plan, marketing, and more. Such a document is necessary to have a clear picture of your business launch and growth. Furthermore, if you plan to obtain funds from external sources, you’ll need to demonstrate to your potential investors the details of your idea and the financial forecasts.
8. Naming and the legal side
Select an appropriate name for your startup that reflects your business idea. Apart from this, you should discover the legal side of starting a tech company early to avoid painful mistakes. For example, if entrepreneurs don’t comply with the registration procedure or tax requirements, they may be penalized.
9. Brand identity, website, and launch
Once you have a business idea and funding, you can start constructing your organization. Develop your startup brand identity, including tone of voice, style, image, and personality, to make it easily recognized by consumers.
A business website is a necessary factor since it creates a platform for lead generation and communication with your audience.
After that, you can actually launch your startup. Develop a creative launch campaign to make an effect on the market.
10. Marketing strategies
Make sure to undertake continual marketing efforts to avoid failure and keep your business growing. For this, keep up with the industry trends, competitor activities, and upcoming tendencies. Analyze the completed campaigns and optimize your strategies and tactics.
Examples of successful startups that grew into full-fledged companies
When addressing how to start a startup, check the list of remarkable companies showcasing how an innovative idea turns into business.
Logistics: Uber Freight
- Description: Uber Freight is an extension of Uber’s platform that connects shippers and carriers in the freight industry. It provides a marketplace for freight transport, offering real-time tracking and transparency.
- Growth factors: Leveraging the success of the ride-sharing model, Uber Freight has expanded rapidly, creating a tech-driven platform for the freight industry, optimizing processes, and improving efficiency.
Retail: Amazon
- Description: Originally an online bookstore, Amazon has evolved into one of the world’s largest e-commerce and technology companies. It offers a wide range of products, including books, electronics, clothing, and more. Amazon has also expanded into various sectors, such as cloud computing (Amazon Web Services) and entertainment (Amazon Prime Video).
- Growth factors: Amazon’s growth is attributed to its customer-centric approach, a vast selection of products, efficient logistics (including Amazon Prime for fast shipping), and continuous innovation.
Discover more lessons from Amazon’s experience.
Fintech: Robinhood
- Description: Robinhood is a commission-free stock and cryptocurrency trading platform that aims to make investing accessible to a broader audience. It allows users to buy and sell stocks, ETFs, options, and cryptocurrencies without traditional brokerage fees.
- Growth factors: Robinhood gained rapid popularity by simplifying the investment process, offering a user-friendly mobile app, and attracting a younger community. Its approach of democratizing access to financial markets reinforced its growth.
Useful resources for startups
How to start a startup company while minimizing expenditures and elevating effectiveness? A range of tools and resources are available for entrepreneurs to attain cost-efficiency and save time.
Below is a description of the several essential startup tool categories accompanied by specific examples.
Ideation tools: MindMeister
With this web-based mind-mapping service, you can involve experts in collaboration and brainstorming in real time. You can utilize this tool for project ideation, planning, and creating presentations. MindMeister allows you to transform mind maps into dynamic slideshows.
Furthermore, the service integrates with MeisterTask, a task management tool that empowers you to turn your ideas into actionable tasks.
Startup MVP tools: Justinmind
A comprehensive prototyping solution, Justinmind is an excellent tool for startups. It can help you with all MVP-related aspects, from wireframes to interactive prototypes. With this service, you can develop a fully interactive prototype from the ground up and activate it easily.
Startup launch: BetaList
This platform (BetaList) helps you prepare your startup for a seamless launch. What’s most tempting about this it is that you can test your startup idea with an audience of business enthusiasts and collect relevant feedback.
The tool has helped numerous startups evaluate their ideas by conducting qualitative and quantitative research, thereby gaining a better understanding of their consumers. Therefore, entrepreneurs could shape a better vision of whether their products suit the audience.
Startup marketing: Hootsuite
Hootsuite is a robust social media marketing tool with straightforward UI and reasonable pricing plans. Its features and ease of use make it popular among startups worldwide.
The solution allows placing up to 30 social media posts for free. You can also gauge the ROI of your campaigns and track their effectiveness.
FAQ on startup launching
A startup begins with identifying a unique issue, need, or opportunity, developing a viable solution, and creating a business plan. Then, entrepreneurs seek funding, build a minimum viable product, test it in the market, collect feedback, and optimize the solution. A successful startup combines innovation, strategic planning, and resourcefulness to launch and grow in a competitive landscape.
You can generate your idea individually, but you’ll need a team to bring it to life. Identify the roles that you can perform yourself and the ones for which you need the other specialists. If you don’t have a technical background, an IT team will be necessary for your tech startup. Prioritize time management and skill acquisition, and gradually scale your venture.
Examine the experience of similar startups and develop your own launch strategy. Find the sources of funding and assemble a team of enthusiastic professionals. Then, be prepared to work hard, take risks, keep trying, and innovate.
Although each startup has its unique idea, most of them undergo the same development phases. In the first stage, they explore the opportunity, raising funds, creating a product, and starting their sales. The next stage includes building the necessary processes for a company to grow. Then, startups optimize their strategies to capitalize on opportunities. Finally, they transform into a successful business.
The cost of starting a tech company varies widely based on the idea, industry, scale, location, and other factors. Small businesses may launch with a few thousand dollars, while tech startups requiring specialized equipment can require millions. To be more specific, experts estimated the average cost of creating a tech startup at about $5000. Entrepreneurs should carefully analyze their business model, create a detailed budget, and seek funding accordingly.
Wrapping up
Global economic trends witness that it can be a good idea to build a startup in 2024. However, even under favorable external conditions, a tech project requires meticulous planning to succeed.
Follow the 10 fundamental steps to create a startup and describe how your idea transforms into a winning tech product. Get inspired by prominent entrepreneurs in different niches to see how brilliant tech novelties disrupt markets and grow into profitable businesses. Finally, use convenient tools to get a hand on various stages of your business development.
Even if you don’t have a technical background, this doesn’t mean you can’t build a tech company. With a professional software development partner like Coreteka, you’ll address all the relevant needs and complement your team with appropriate IT experts.
Investigate Coreteka’s practices of client communication and reporting in software development.
Understanding the requirements of emerging businesses, Coreteka provides efficient and affordable services for startups, enabling them to bring their projects to life.
Contact us to share your idea and embark on your tech innovation journey.
