Many founders of tech startups are engineers, programmers, designers or technology inventors and think little about the business side of things. This can lead them down a bad path, because this is like only having one half of what is needed to create a successful business. Below in this article, we will cover Why Founders of Tech Startups Should Start with a Business Mindset.
To avoid ending up in a sticky mess, we’re hoping this article will encourage tech startup founders to become a bit more practical.
Here are some suggestions for tech startup founders to steer towards business, rather than away from it.
Starting with the Right Mindset
While it’s easy to act like the crazy inventor coming up with the latest technology ideas and being unrelenting in your pursuit of excellence, it leads to an unbalanced outcome.
As a startup, you’ll need to develop products, find markets for them, and package and promote them successfully. This represents a broad mix of skillsets that one person usually doesn’t possess at the starting line. However, many are learned skills.
To create a successful tech startup, it’s necessary to develop a business mind to go with the creative or inventive one. This way, you can appreciate the nuances of the business world and what’s required of any founder.
Partnering Up or Developing a Team of Supporters
When you’re more of a creative person and not business oriented, pulling in a partner may be a great solution. This is usually an equity partner in the business, but it can equally be someone who’s recruited to be the CEO while you remain the chief technology creator. Taking this approach would remove much of the day-to-day business strain off your back.
In addition, it’s beneficial to focus on building a solid team of supporters around you. They each should help cover the other areas that the startup will need to function. This steadily moves the business from a garage-only operation to one that’s starting to resemble a real, mature business.
Getting the Numbers Right
The business won’t survive unless the basic financial numbers make sense.
When selling on the web, you must understand your gross from your net. Of course, we’re talking gross profit margins here and earnings that fall to the bottom-line. In between, there’s costs for the goods sold and other relevant expenses. The more complicated the business, the more line items there will be that must be factored in.
Only when you have a good understanding of the financials can you ensure that the startup will survive. Otherwise, it’ll require angel investors or venture capitalists to fund it in exchange for a large chunk of equity, which will be a painful experience!
Knowing When You Should Step Aside
For startup founders, there sometimes reaches a time when it’s worth thinking about whether to step aside. This may be suggested by the Board of Directors, but other times, it’s because you know it’s the right time to do it.
Why do founders sometimes step down? The main reason is that they’ve reached the limit of their capabilities to grow the business. At that time, bringing in a more experienced CEO is the best move for the company.
Once you have both a technical mindset and a business one to go with it, you’ll be virtually unstoppable, as long as you have the right technology ideas too.