Starting a company is hard but building that business into a long-term success is even harder. We’ve learnt many things on our incredible journey since launching Avinode in 2002. Here are seven of our top tips on how to turn a tech start-up into a lasting enterprise:
1. Make sure people need your product.
All the evidence suggests 90% of tech start-ups fail within five years. And the most common reason entrepreneurs give for the failure of their business is a lack of demand. Your marketing might be brilliant but, in the end, you just can’t build a company on products people don’t want. First identify a need, then develop a solution.
Look at Jacob de Geer, who launched Stockholm-based payments company iZettle in 2010 when he noticed small entrepreneurs were being forced to turn away business. They couldn’t afford the costs of accepting credit and debit cards but their potential customers were not carrying cash. So iZettle unveiled card readers that could be plugged into smartphones or tablets to help small merchants accept payments in a simple, affordable and secure way. In 2018, digital payments giant PayPal bought iZettle for $2.2bn.
2. Sell, sell, sell.
It’s not all about the product, it’s about selling the product. A terrible product no one wants, and a wonderful product no one knows about, are both equally certain to fail. And make sure you sell the user benefits when you talk to people, not the clever tech.
3. Make the right connections.
Is there really such a thing as stand-alone tech anymore? If you want your start-up to become a lasting success, you need to be passionate about interconnectivity. Those affluent digital natives you want to be your loyal customers for the next 20 years love seamless integration. They love the Internet of Things (IoT). They love how easily Amazon’s Alexa virtual assistant ‘talks’ to the Hive smart home service, and how efficiently Intuit’s QuickBooks accounting software synchronizes with PayPal. Your customers today don’t just want your products to connect to the rest of the world; they expect nothing less.
Try to see partners out there, not rivals, and keep monitoring developments. When the next generation of ‘bright young things’ unleash their breakthrough ideas, don’t resist or assume “we’ll be fine as we are”; make sure your tech can talk to their tech. Don’t get left behind as the world changes.
4. Be seen.
Find a way to stand out from established companies. Even if you’re offering disruptive technology with few direct rivals (if any), you’ll still be competing for industry attention with many other advertisers on websites and exhibitors at crowded events. At Avinode, we never worry about what people will think of the bright green shoes we wear at conventions. If we hear someone ask: “Who are those people in green?” as we move around the show, we’re happy. Tomorrow, they’ll know exactly who we are. Job done.
5. Listen to feedback but don’t be afraid to take the lead.
In 2007, in a world full of hugely popular BlackBerry devices, Apple still knew people would really want touchscreen smartphones. The iPhone was launched. You know the rest.
6. Build the right team quickly.
Avinode’s three co-founders met as students at Chalmers Institute of Technology in Gothenburg, and the strength of that early friendship, trust and respect undoubtedly helped the team through the challenges of launching and running a start-up.
You’ll need a versatile group at first, with everyone probably helping with everything. As that small team grows, though, and roles become more defined and independent, make sure critical business needs don’t slip through the gaps between job titles. You’ll always be better working together.
7. Keep close to your customers.
Talking of teams, the strong relationships your customer service team build with your clients will be critical if you want your start-up to last. In fact, every member of your staff, at every level, should consider themselves part of the customer service team. Your company’s products must evolve as your clients’ needs change. Build everything around your customers…and make sure they know that’s what you’re doing.