How to turn an IT startup into a profitable business?
Did you know that out of ten IT startups, only one survives? How to become the one who is better, faster, stronger? How not to get bogged down in a bureaucratic routine, not to lose financial backlog, to create a product that will be in demand in the market and become a leader in its business niche?
Many of us asked similar questions in the process of launching our business. The prospect of uncertainty frightens some, inspires others. But regardless of which group you belong to, you need to consider a number of important points in order to move from a number of IT startups to a fully functioning and profitable business.
- Suggest a solution
The most important thing for a startup is the correct market segmentation. You must clearly understand what problems your product helps to solve, and what target audience it is designed for. Nobody needs 1001 Facebook, especially since the number 1 on this list copes with its task with a bang. A complex, non-user-friendly project will probably also not find its fans in the proper amount. To assess the prospects of your product, it is necessary to identify the problem of the potential target audience and try to solve it as qualitatively as possible. Remember how Android appeared, because by then there were already Symbian and iOS. But Android has found its niche, becoming a more convenient alternative to Symbian and a direct competitor to iOS, the closed structure of which was intended only for Apple devices.
And how not to recall the fierce competition among the three search giants Google, Yahoo and MSN / Bing? Probably no one remembers such search engines of the early 2000s as AllTheWeb and Altavista? But once Google was a “garage” startup, but a special approach to creating a search service allowed it to occupy more than 70% of the global market in its business niche. Google solved the problem of finding information on billions of pages better and faster than others, offering more relevant results, and was quite successful.
- Do not miss the little things
It would seem that the subject matter of the product is known, the target audience has been identified and studied, the developers are professionals from Capital Letter, the leader is a fan of his craft and an ideological inspirer. Doomed to success? No matter how! It’s not enough to gather the best players - you still need to teach them how to play in the same team. In the case of a startup, job responsibilities are a little blurred and everyone can and should do things not quite typical of his usual specialization. Developers need to understand the marketing component of the product, and marketers understand the basic aspects of development. This is not about how to get a salesperson to program. Remember, “for everything that we do, we will be responsible together!”. I’m about this. Success or failure depends on each link of the startup team.
- Don't be afraid to change
Probably, before launching the product into development, more than one month of analysis and calculations passed. A detailed business plan for the development of the project is not a dozen pages. A plan is good and valuable, but life makes its own adjustments. I have not seen a single business plan that would be 100% consistent with reality. And this is normal. The plan operates with key parameters, but it does not provide for operational changes and data obtained in the real market, empirically.
- Growth rate is important
Fast growth is an indicator of choosing the right idea and business strategy. In addition to the fact that explosive growth directly affects the company's income, it also encourages investors to invest in your business. What better will show the potential than the growth dynamics of the project? In addition, a startup always has a risk of not having time to break even before the initial investment is spent. If the growth is not sufficient, the business may simply drown out, and not having reached the planned profitability indicators.
- Difficulties exist to overcome them.
Did you know that Apple balanced on the brink of bankruptcy in the late 90s, and in 2014 its profit amounted to more than $ 39.5 billion (1st place in terms of profit in accordance with the Fortune 500 rating )! Just a couple of decades ago, few believed that the revolutionary ideas of Steve Jobs could bring the company out of the protracted crisis. But the main guarantee of success of the founder of Apple is faith in yourself: your ideas, strengths and capabilities. When a new product line is introduced to the market, no matter how wonderful the creator plans, it is far from the fact that the target audience will enthusiastically meet it. It is important here not to give in to difficulties, but to prove that your product is more convenient, reliable, safer and simply better than analogues.
If your business is developing steadily and even began to make a profit - congratulations, you are doing everything right and have avoided the typical mistakes of startups. It is likely that your product effectively solves the problems of customers, your team is well-coordinated, you are flexible enough to adapt to the changing realities of the market, and consider the difficulties along the way as opportunities that provide your business with the proper level of growth. This is really great luck: do not share your recipe?