How to start a tech company: Your guide to starting a tech business
Learning how to start a tech company could be an extremely lucrative strategy in today’s digitally transforming world. The technology landscape is evolving at a phenomenal rate, with innovations and solutions appearing all the time.
Starting your own tech business could mean you could become the next Mark Zuckerberg or Steve Jobs.
Starting a tech company can be a very versatile option for entrepreneurs too. After all, you can explore various different tech sub-categories, from the software and hardware landscapes to Information Technology and consulting.
You could even consider diving into one of the most disruptive tech areas, such as artificial intelligence, the metaverse, or XR.
However, as fantastic as running a tech business can be, it’s not without its challenges.
Not only do you need exceptional knowledge in your chosen field, but you’ll also need to figure out how to structure and build your technology company to cultivate success.
With over 305 million tech startups branching into the industry each year, standing out is difficult.
Today, we will look at some key steps in starting an effective tech business to help you prepare for success.
How to start a tech business: Choosing an idea
Let’s start with the basics.
One of the most complicated parts of starting a tech business is simply coming up with the right idea for your company. There is no shortage of options for tech companies today. You could create your own custom software for a specific audience, like accountants or gamers.
Or you could build innovative computer systems, chipsets, and graphics cards.
Some technology companies even resell other solutions from larger brands, like hosting, specialist software, and tools. To figure out where you’re going to focus your efforts, you’ll need to start by considering three core things:
What kind of technology are you most familiar with? Where does your knowledge lie, and what are you most passionate about?
What kind of customer do you want to serve? What are their specific goals, pain points, and issues?
To succeed in the tech industry, you’ll need to choose a niche that’s thriving but not overly saturated. There should be clear interest in your chosen product or service, but not too much competition.
Conducting in-depth research will be essential to ensure you’re setting your organization up for success. Start by learning as much as you can about your chosen niche or market.
Research the trends affecting your industry and what kind of innovations you may need to be aware of in the space. There are plenty of market reports available online to guide you.
Next, ask yourself who your target audience is going to be. Create comprehensive buyer personas outlining the pain points and specific goals of the customers you want to serve. Determine what your customers are going to be looking for most from a technology provider.
What kind of problems can you solve for them with your solution?
Finally, conduct a thorough competitive analysis. Ask yourself who your main competitors are going to be, and make a list of them.
Conducting a “SWOT analysis,” where you consider the strengths, weaknesses, opportunities, and threats associated with each competitor, can help you determine how you will set your solution apart from others already in the market.
How do you structure a tech company?
Once you have an idea for your technology company, the real work begins. You need to start thinking about the structure of your organization.
When starting a tech company, the first “structural” decision you’ll need to make relates to the legal structure. In other words, how are you going to identify your business in the eyes of the government?
Many smaller companies start as sole proprietorships, which are managed and operated by a single person. Alternatively, you could consider partnering with another founder or building a limited liability company to protect yourself from various tax and legal issues.
If you’re not sure which option works for you, the best thing you can do is speak to a professional with a deeper knowledge of your industry. They’ll be able to assess your idea and offer advice on the kind of structure that makes the most sense.
Other points to think about when structuring a technology company include the following:
Your go-to market strategy
There are various ways to take a technology product “to the market.” For instance, you could produce software and hardware and sell it directly to your B2B and B2C target audience with your own offline and online stores.
Alternatively, you might choose to sell your products on a wholesale basis to other companies. Many organizations use a combination of strategies. For example, you can buy iPhones from other market-leading phone distribution companies or the Apple store.
One option could also be to resell other products created by larger companies. This could be a good idea if you don’t have the technical knowledge or resources to produce hardware and software yourself, with in-house support.
Your ideal team
While it’s possible to start a technology brand on your own, there’s a good chance you’ll eventually need to hire some specialists to help you. Ultimately, there’s only so much you can do on your own before accessing additional employees.
Depending on the nature of your business, your ideal might include the following:
These are responsible for running the business and ensuring the company generates consistent growth and profits. Your management team may include a Chief Executive Officer, Chief Marketing Officer, and Chief Technology Officer.
These are specialists with the industry knowledge required to produce the technology you’re going to be selling, such as hardware or software. They’ll also work with logistics teams and other partners to get your product to market.
Sales and marketing professionals
These are experts responsible for advertising your technology and making sure you create consistent revenue. These teams can promote your brand and connect with crucial customers on a daily basis.
Depending on the solution you want to develop, you may also need to invest in customer service personnel, operations teams, and quality assurance specialists.
Your business plan
When learning how to start a tech company, many entrepreneurs overlook the importance of a business plan. This document is a comprehensive overview of everything an investor, employer, or business leader needs to know about your company.
Your business plan should outline the key services and products you will offer, as well as what makes them stand out from the other solutions provided by your competitors. It should describe your target audience, with clear user personas, and your go-to-market strategy.
Business plans can also outline how you will charge customers for your products or services, what your profit margins are likely to look like, and your growth plans.
How much money do you need to start a technology company?
A major and often complicated part of starting a tech business is figuring out how much money you will need to bring your organization to life. Ultimately, it’s difficult to know for certain how much any specific technology brand will cost to create.
The reason for this is that every technology business is different. If you’re reselling hosting services to companies in search of cloud computing solutions, you’ll probably spend a lot less on set-up than you would if you were designing new computer chips from scratch.
Sometimes, it’s even possible to learn how to start a tech company with no money. For instance, you can offer consulting services and IT support from home without paying or design an e-commerce store with a dropshipping partner to sell tech products to consumers.
To figure out how much money it might cost to start a tech company, you’ll need to think about all of the following expenses:
- Equipment and supplies: The crucial equipment involved in running your business and making your product. This could include machinery, computers, and desks.
- Business formation fees: Some costs can be associated with forming a business entity, such as fees for setting up an LLC and getting new patents or trademarks.
- Software expenses: The cost of paying for critical software. This could include paying for licenses to use certain types of software within your hardware.
- Real estate: The cost of paying for retail locations, office spaces, and any other physical premises you may need.
- Branding costs: Prices for logos, brand guideline creation, advertising support, and anything else you might need to make your company stand out.
- Website costs The price of creating your website, hosting it, and making sure it’s populated with the right content.
How to start your own tech company: Creating an identity
Now you have a business plan, a clear idea of how you will structure your company, and an understanding of how much you may need to spend to create your tech company; it’s time to begin working on your core identity.
Ultimately, few things are more important than having the right brand identity for today’s technology companies.
In the competitive tech landscape, investing in a brand that connects emotionally with your target audience is the best way to improve your chances of success.
Your brand strategy starts from the moment you create your organization and influences everything from your choice of name to your logo design and even your marketing strategies.
Here’s what you’ll need to get started:
1. A vision, mission, and set of values
First, you will need to establish some of the core components of your brand essence. In other words, what does your business stand for? Identifying the “why” behind your technology company will help you to send the right message to your target audience.
Ask yourself what you want to accomplish as a technology brand. Do you want to encourage the world to “think different,” like Apple, or make information more accessible, like Google?
What will the core values of your company be? Are you committed to creating sustainable and eco-friendly products that make the world a better place? Are you focused on being on the cutting edge of your industry and investing heavily in research and development?
2. A memorable name
A name might seem like a small component of your overall technology brand, but it’s more important than you might think. Imagine what the world would be like today if Google hadn’t chosen its memorable title, based on the word “Googol.”
What if Twitter hadn’t chosen its iconic moniker, or we had never heard of brands like Zoom or Slack?
The right name should resonate with your target audience on an emotional level while still conveying useful information about your business and personality. Ask yourself what you want your customers to think when they hear your name.
Do you want to be associated with speed and simplicity, like Zoom, or are you focused on collaboration and community, like Microsoft Teams?
3. An impactful voice
Your brand voice is how you convey the personality of your company to your audience in your marketing campaigns, website copy, and press release statements. It’s the language you choose to explain what makes your business special and the way you present yourself to your clients.
Ask yourself what kind of identity you want to be known for.
For example, Spotify has a playful, fun, and youthful tone of voice to appeal to a younger audience. Alternatively, companies like IBM are more authoritative and formal in their content because they want to appeal to a more sophisticated, educated group of consumers.
Your voice should clearly resonate with the audience you want to reach.
4. An unforgettable image
You begin working on your visual brand assets only once you’ve identified your voice and personality. Your brand image consists of everything from your logo to the shapes, colors, and typography you use in your marketing campaigns and on your website.
Something as simple as the color of your logo can make a huge difference to how your brand is perceived. Colors like green and blue are common in the technology industry, as they’re associated with growth and reliability.
However, a lot of brands also experiment with colors like white and black because they’re modern and sophisticated. Make sure your image is consistent across every channel you use to promote your tech brand.
5. A promotional plan
Finally, you’ll need a plan for how you will promote your technology company to your ideal target audience. There are a number of options available to experiment with here.
For example, you can start by building an attractive website, which you can use to speak to your target audience with optimized content.
Social media can create a two-way connection with your ideal customers. You could even think about working with influencers and thought leaders to stand out.
Most technology companies will experiment with a handful of different promotional strategies and use the information they collect from each campaign to drive their future efforts. Don’t be afraid to explore everything from offline marketing to email advertising.
How to create a tech startup with growth potential
As the technology landscape continues to evolve at an amazing pace, learning how to start a tech company could be an incredible way to earn a fantastic income. However, as we’ve covered so far, starting a tech business does require significant work, focus, and commitment.
Even if you develop the ideal brand, as well as a phenomenal product or service, there’s a good chance you’re going to need to invest significant effort into growing your business too.
One way to boost your chances of success is to seek out additional support from marketing and branding experts that can help to position you effectively in front of your target audience.
Here are some other ideas to help you grow:
Focus on exceptional customer experience
For many people, technology isn’t something purchased on a whim. Both software and hardware can be expensive in today’s world. As such, customers are more careful about how they spend their money.
To generate long-lasting trust and preserve your company’s reputation, you’ll need to focus on delivering a phenomenal customer experience. Ensure you’re always going above and beyond for your clients, and try to collect reviews and testimonials for social proof.
Build your network
As a technology business owner, the people you know can make all the difference to your chances of success. Connecting with specialists in your industry is an excellent way to unlock new growth opportunities.
You may find partners who can work alongside you to take your product or service to the next level. Building your network will also allow you to search for investors and shareholders. The more people you have investing in your business, the more likely it is to grow.
Use data to your advantage
Most technology business owners know data is powerful. The more information you collect about your audience, your product, and even your marketplace, the more likely you are to make intelligent decisions for growth.
Invest in analytical and reporting tools capable of delivering both real-time and historical reports. These tools will give you a direct insight into what you need to do to evolve and grow. You could even consider hiring a data scientist as part of your team.
Protect your intellectual property
Copyrights and trademarks can be extremely valuable in the technology world. If you come up with a powerful solution unique to the market, it’s important to prevent other competitors from swooping in and stealing your idea.
You might even consider applying for specific patents which give you complete control over the solutions you develop. Remember that applying for and securing patents can take some time, so you may need to get started early.
Defend your reputation
Just as it’s important to protect your ideas, it’s crucial to keep a close eye on the perception customers have of your brand. Technology companies can face a lot of scrutiny for how they collect and manage data.
With this in mind, watch what people say about you and pay close attention to compliance standards. Have a strategy in place for how you might handle any reputation issues.
Can you start a tech company successfully?
The good news for anyone interested in learning how to start a tech company today is the barrier to entry in this market is lower than ever. There are various ways to get involved with starting a tech company that doesn’t necessarily require a huge amount of initial investment.
However, you’ll still need a solid plan in place and a clear vision for where you want to take your new venture. Using the tips above, you should be able to boost your chances of success. Just ensure you don’t underestimate the work you’ll need to put in.
Most importantly, remember seeking out additional help can be extremely useful as a beginner. Plenty of design, branding, and marketing experts are out there to guide and support you.
Fabrik: A branding agency for our times.