Five Ways To Stand-out From The Crowd As A Tech Entrepreneur
By Suzanne Ley - FinTech Connector Member / Banker / Start-up Adviser
Finding success as a tech entrepreneur can seem daunting at times with failure rates estimated at 70% or higher. On the bright side, there are some very tangible things you can do (and questions to consider) to improve your odds of success and stand-out from crowd.
1. Develop a strong (but adaptable) business plan
Developing a detailed business plan is the foundation for establishing the basic operating model for your business. Changes to the plan are inevitable but an initial operating construct is essential. There are some great online tools to help you develop a business plan including LinkedIn Learning’s Creating a Business Plan and Slidebean for pitch decks, so take the time and do the work.
How are you trying to solve an actual customer problem with your technology?
I love technology, but in many cases, potential buyers may not understand the value of your product so think through the connection between the customer problem you are trying to solve and your technology-based solution. It doesn’t need to be complicated, but your value proposition must be clear to non-technical users.
Is the market ready for your idea?
I remember attending an innovation conference years ago and met some cool tech entrepreneurs. While their ideas were remarkable and cutting edge at the time, few of these ideas really took hold in the mid-90s because the market wasn’t ready for their ideas. Few things are more demoralizing for an entrepreneur than being years too early for their target market.
2. Have a robust funding plan for your business
One of the biggest mistakes I see entrepreneurs make is believing that raising money from outside investors is the end goal. Creating a product that people want to buy and will generate a satisfactory return for you and your investors is the goal.
Do you want to immediately seek outside money from angel investors or are you willing to bootstrap your idea for an initial period?
If you can self-fund your idea for an initial period, you are probably going to be better off in the long-run. While I don’t advocate running up unsustainable credit card debt or pillaging retirement savings, try to figure out how much of your own money you can afford to spend to get your business up and running before you seek outside investors.
What are you willing to give up in exchange for the funding you need for your company?
Have an honest discussion with your team about giving up any amount of control and/or financial upside to your company. This can be a difficult discussion for first time entrepreneurs who are used to having complete control of their business.
How much do you need to raise for your business to get it to the next milestone?
Think about financial needs in milestones. If you need $100k to get your app up and running, focus on that. Demonstrating tangible success in your business is a great way to attract potential investors.
Are you and your potential investors on the same page about your business and its future?
Selecting the right financial partners is an essential component for your company’s success, especially in the early stages. Do your homework on potential partners and make sure they have the same vision for your company and are willing to work collaboratively with you on your idea. I met a serial entrepreneur recently who told me that she turned down much needed funds for her new business because the VC was not on the same page with her vision of the company. She ended up finding a different VC whose vision was more in-line with her own and everything turned out just fine.
3. Identify talent needs and gaps to meet company milestones
Your business plan should include a clear identification of the roles that you will need to fill to achieve your early milestones. While you are not likely to need to fill every role upfront, it is beneficial to have some potential candidates identified for later stage roles. Your advisers/board of directors can be helpful with guiding you on talent management decisions.
Do you (the founders) have the diversity of skills and experience necessary to complete the company’s initial milestones?
In the tech space, I often meet founders that have great technical skills but do not necessarily have experience running a business (someone with P&L experience). My advice is, even in the early stages, find team members that enhance your skills, not just mirror them. Also, be mindful that not everyone is willing to take equity in lieu of cash so figure out how much cash you will need to pay some of these early team members.
4. Plan your exit – sell to a strategic buyer, IPO or closure of the firm
Is your idea more valuable to a larger platform than you can provide on your own?
Not every idea was meant to be a company for the long-term. Often the best scenario is to develop a great app, product or platform, sell it and move on. Investors will be far more inclined to invest in your next idea if you have the foresight to exit your company at its “value maximizing point” rather than holding-on to the company waiting to do an IPO.
How do you know when it’s time to shut down the business?
This can be a very difficult decision for aspiring entrepreneurs. Failure is hard, but it’s not the end of the world. Plenty of successful entrepreneurs have had business failures in their careers. My advice is to have clear milestones and if you are not making significant progress towards meeting your milestones, it may be worth re-evaluating the viability of your business.
5. Get as much feedback as possible about your business
There are very often successful business people at networking events who would love to help aspiring entrepreneurs with their ideas – let them help you.
There are some great ways to get advice through mentors and advisors including 1) SCORE has been used by many of my friends with great success 2) Alumni networks (undergraduate institutions graduate school, affinity groups).
Even if you disagree with the feedback, take it all in and maybe someday it will make sense. Even little kernels of wisdom could make the difference for your business.