Thinking of founding a startup? Let's get your business off the ground! Take a look at these essential tech startup tips that can help new entrepreneurs avoid common pitfalls and build sustainable ventures. Join us as we take a look behind the scenes in founding a tech startup.
Core Principles Every Tech Startup Should Follow
Some of the most valuable tech startup tips stem from these core principles:
A Clear and Defined Mission: Most startups operate in the business of solving real-world problems with innovative solutions. Clearly defining the problems, solutions, and mission is the first step in founding a startup.
Innovation and Creativity: Fostering innovation and creativity on an individual level can help diffuse these values on a larger scale throughout the company.
A Scalable Business Model: Designing a business model that can scale without exponentially increasing costs is key to ensuring success later down the road.
Talent and People: A startup's most valuable asset is its people, which is why it is important to find those who have both the talent and can cultivate the company culture.
The What, Where, & Who of Your Startup
While foundational principles are half the battle, let's take a closer look at some of the strategic decisions to take into account when founding your startup.
Flat company structures vs. hierarchical
Companies within the corporate and startup world are generally structured in one of two different ways: flat or hierarchical.
A hierarchical structure is what most people imagine when they think of large corporations. This type of organizational hierarchy consists of a long chain of command with many managers. Authority is very clearly defined, which is meant to streamline decision making.
A flat organizational structure is a more modern approach, typically adopted by smaller companies. This type of organizational structure has less defined authority, fewer layers of management, and gives more responsibility and autonomy to each individual.
While the efficacy of both structures is highly debated, many larger companies are starting to find a middle ground that works, like in the case of Ag Biome.
When founding a tech startup, it is vital to analyze the ideal management structure, which usually comes down to one thing: the people. The more a company can rely on its people and their talent, the more autonomy and less bureaucracy is needed within the company.
Being fully remote vs. office based
Since the Covid-19 pandemic in 2020, remote work has been on the rise. In an episode of the McKinsey Institute's Forward Thinking podcast with Nicholas Bloom, it is estimated that about 15% of workers in the U.S are fully remote, while another 30% are hybrid. Many of these workers are in sectors like IT, technology, or human resources.
On one hand, fully remote work offers financial benefits for startups because they can save on rent and operational costs. However, not having people in the office calls into question how to hold employees accountable and how to create the office culture that startups so heavily rely on.
The choice at hand for many founders often comes down to one key question: how does remote work affect productivity? Unsurprisingly, studies show an immense variability in the quality and output of remote workers, with up to a 30-point spread in productivity results. Some studies cite a serious decrease in productivity of employees that work from home, while others are able to produce double-digit percentage increases.
However, most of these studies seem to agree on one key conclusion: the effects and results of remote work ultimately depend on the company, their incentives, and their management. Most successful cases involve a hybrid combination of remote and in-person days, as well as high-quality managers. When properly executed, working from home for at least part of the week can bring benefits for both employees and employers alike.
Preparing to make your first hires
People are one of the most valuable assets that startups have, making hiring one of the most important steps in founding a tech startup. Before starting the interviews, it is important to clearly define company values and culture so that the interviewers can assess what makes a good fit and what questions to ask.
Many veterans of the industry agree that hiring versatile, self-motivated individuals with diverse skillsets can sometimes be more powerful than hiring highly specialized experts.
Putting in the effort at the beginning to hire talented people who cultivate a healthy atmosphere in the office is the groundwork for a high retention rate and motivated employees. Don't know where to start? Over the years, countless startups have discovered unique talent to bring to their companies at the VivaTech event.
Planning for Product Market Fit Tests
Product market fit is a concept used to evaluate how well a product fulfills the demand of a certain market. A product market fit test normally takes place during the Minimum Viable Product (MVP) stage, which is when a first prototype has been developed to test a hypothesis in the target market.
The product market test consists of four main things:
Define and research the target market
Use your core value proposition to develop an MVP
Collect user feedback using surveys and analytics
Iterate and improve based on data
A validated product market fit shows that customers are consistently buying the product and showing satisfaction, which sets the stage for future growth and scaling.
Navigating the journey of building a tech startup requires balancing foundational principles with strategic decisions about structure, hiring, and market fit. By applying core tech startup tips – like choosing the right structure, hiring smartly, and testing product-market fit – founders can build adaptable, growth-focused businesses.