Answering key questions about tech startups
Starting a business is a challenging and exciting endeavour. Each year, thousands of entrepreneurs come up with new startups with bold ideas. In the 21st century, tech startups are on the rise. The past decade has seen a number of tech startups quickly reach a billion pounds in value. The spread of cheap computing and smartphones has played a major role in the success of tech startups. Just like in starting any other business, starting a tech business has its challenges. Below are answers to the most common questions about tech startups.
Why are tech startups dominated by the young?
Steve Wozniak and Steve Jobs started Apple in their 20s. Bill Gates put the idea of Microsoft into action at 20. The young have been creating new technology for a long time. However, tech startups being dominated by the young does not mean people over 30 years of age are not involved in tech startups. Jeff Bezos started Amazon at 30 while Netflix created were 36 and 37. So why are tech startups dominated by the young? This is a commonly asked question. It is argued that younger people are more relaxed and laid back. They are less bound to contemporary thinking and are more innovative and disruptive. Young people have more time and energy. The responsibilities are few and they can put in time trying to come up with new things. Investors are also associating themselves with young founders.
Why do tech startups & companies always have inflated valuations?
It can be difficult to valuing technology companies. It requires a degree of predicting future competition and growth as well as profits. In the last 2 years, global ranks on tech companies have more than doubled. The world is connected through social networking leading to creation for tech companies. Smartphones have led to the creation of a lot of wealth and helped propel companies like Google, Facebook, Uber, Snapchat and others. Technology plays a major role in innovation and has contributed to much change in the world. Technology companies have revolutionalised the economic world.
Tech companies practising innovative and unconventional ways to meet the demand of customers will mostly dominate the markets. Billions of pounds managed by insurance companies, hedge funds, foundations, mutual funds and more are being invested in the private tech markets. Traditional companies are learning to embrace emerging and disruptive technologies faster. All these factors contribute to giving tech startups an edge leading to inflated valuation.
How do I find an advisor/mentor for my tech startup?
Having a mentor/advisor for improves the chances of your tech startup being a success. A potential mentor should be willing to invest time for a sustained period, have domain expertise and willingness to be emotionally invested in your company. To get an advisor for your tech startup, you should first tap your network. Go through your connection while trying to create new connections. In the process, you can find one advisor who is a perfect fit. You can have multiple advisors. Research on the areas you need mentors and find out the best people in those areas. If you feel a person is the best fit, do not have to have had a connection to them. Be aggressive while approaching them. Compose a polite, professional compelling message that you can send via email or LinkedIn. Be prepared as not everyone will reply nor accept, but you should not give up. In the end, you will get excellent advisors for your tech startup.
How to value high-tech startup companies?
Valuations are subjective. There is no correct way to value tech companies. However, in search of precise valuations, investors use well-established principles. Components of high tech valuation and traditional valuation process for established companies are the same, but they differ in order and emphasis.
You begin from the future working instead of starting with the company’s past performance. Focus on the potential size of the market and the capital the company might earn in relation to its market share. Since change is constant and the future unpredictable, use different scenarios on how the market might grow under different conditions. It is important to understand what drives the value of the business across different scenarios is important.
Is Silicon Valley still a good place to start a hi-tech startup?
While technology has made it possible to work remotely from anywhere, choosing the right ‘home base’ for your tech startup is vital. Due to decades of concentrated innovation and talent, Silicon Valley is still an ideal place for a hi-tech startup. However, are great for hi-tech startups. Uber is a multibillion-dollar unicorn based in California. Its app is used all over the world to request for transport services. Artomatix, a tech startup in Ireland uses artificial intelligence to develop a hyper-realistic 3D world automatically hence helping game and graphic designers. Erbil Delivery is a tech startup in Iraq. It is a grocery delivery service in Erbil. Supernova, a Baghdad based school creates Arabic language content to help prepare the future generation of Iraqi coders for success. It is important to think global when it comes to hi-tech startups.
How many (by percentage) tech startups are founded by Engineers?
The world tech scene continues to grow day by day. More than half of tech startups are started by engineers. This means, over 50% of tech startups are founded by engineers who then hire support staff to run and manage the companies.
I'm so interested in having a Tech startup in the near future. What does this entail despite low capital?
Like every other business, hi-tech startups require capital. Doing your research on how previous startups have become a success is important while finding and attending tech-related conferences. This broadens your knowledge and enhances your idea for your startup. Despite having low capital, have a definite plan and capital structure for your hi-tech startup. Great plans and capital structures will attract investors who can invest in your business. Like any other business, patience is important to achieving success.
How can a new B2B enterprise tech startup build a large marketing prospect database?
To build a large marketing prospect database, a NEW B2B enterprise tech startup can open its blog. Own content in the blog and cross-link with a medium publication. Have new interesting content constantly while supplying every post with a call to action. With new content constantly on your blog, you will get views daily and in the process build a marketing prospect database.
Writer: Keith Barrett