We continue the series of materials about the launch of our startup for programmers and other IT professionals who are thinking about quitting office work and setting off on a free voyage through the vast expanses of the IT industry on their own small but proud boat. In the first part, we analyzed the pros and cons of starting your own startup for programmers, and also talked about why 90% of startups fail. This article will talk about the most common difficulties that most startup founders will have to face in developing, managing and promoting their product, and ways to overcome them. We will also analyze the most interesting tips for beginners from experienced IT entrepreneurs and investors.
“The moment you are ready to give up, you are closer to success than you think.” Bob Parsons, founder of GoDaddy
Your startup - problems and solutions
Problem #1 Lack of finance
The financial issue always comes first for any business, and especially for startups, since the amount of money to start is usually limited, and a new business begins to bring significant income only after some time. Therefore, almost all startups tend to face the problem of lack of finance at one stage or another. Lack of finance during the growth phase can be, and often is, fatal for many startups, preventing them from growing, whether it's launching new features, hiring competent people, or moving to the right office.
Solution
Make sure you have enough money to grow your startup before you start. This is a fairly obvious recommendation, but a surprisingly large number of new company founders neglect it, and in most cases this leads to the failure of a startup. “The job of a leader is to calculate the time and money needed to get a startup to the next level. If you fail to do this, then you are a bad leader,” said David Roth, a well-known entrepreneur and venture capitalist. Many experts and experienced entrepreneurs recommend that startup founders think about financial management from the very beginning, trying to minimize costs as much as possible. However, saving should not go to the detriment - reducing the cost of development or remuneration of professionals will more often harm a startup than vice versa. But on what it’s not a sin to save money - it’s in the office. It almost always makes sense for startups at the initial stage to choose the simplest and cheapest offices for placement, and many do not disdain coworking at all, and they do it right. In terms of operations, a typical mistake is the founders not understanding the underlying economics of the business and not having a detailed business plan with the expected break-even point in a certain number of months. What is the difference between income and company turnover, and is it possible to take money for everyday needs from turnover (spoiler: no, you can’t) - many young startups make a mistake on this. and they are absolutely correct. In terms of operations, a typical mistake is the founders not understanding the underlying economics of the business and not having a detailed business plan with the expected break-even point in a certain number of months. What is the difference between income and company turnover, and is it possible to take money for everyday needs from turnover (spoiler: no, you can’t) - many young startups make a mistake on this. and they are absolutely correct. In terms of operations, a typical mistake is the founders not understanding the underlying economics of the business and not having a detailed business plan with the expected break-even point in a certain number of months. What is the difference between income and company turnover, and is it possible to take money for everyday needs from turnover (spoiler: no, you can’t) - many young startups make a mistake on this.
Problem #2 Lack of planning
Another common mistake many startup founders make is lack of planning. As seasoned investors point out, too shallow and general planning before launching a startup is quite typical, and is the root cause of the failure of most startups, even those created from really good innovative ideas by enthusiastic and hard-working founders.
Solution
All key aspects of a startup’s operation, including product development, sales, and hiring, require careful and detailed planning. At the same time, planning should be done in advance, and not after the launch of a startup based on enthusiasm alone because of the original idea. The planning process should also take into account potential problems, turmoil and simply costs that cannot be prepared in advance, but which any business inevitably faces sooner or later. Experienced entrepreneurs are advised to devote maximum attention, time and money to the preparation of a business plan, which should be preceded by research on key aspects of the future business. There are many tools for more effective financial management. Here are just a few examples: Xero(a cloud-based accounting platform), Startup Financial Model (a convenient platform specifically for startup financial planning), Quickbooks (a simplified solution for accounting and financial planning).
“The feeling of running a startup is like being punched in the face every day. But working for a big company feels like they want to drown you.” Paul Graham, creator of Y Combinator
Problem #3 Ignoring marketing and sales work
The founders of some technology startups choose to ignore active marketing, hoping that a quality product speaks for itself and that a good reputation will soon do the trick. In the case of SaaS service companies, their founders may expect sales to grow organically in the same way. Both are often wrong. In fact, research shows that a well-executed and carefully planned marketing campaign, along with constant work to increase sales, results much more often than a product without advertising, no matter how high-quality it may be.
Solution
Startups, like no other company, need advertising and marketing to convey to people what their product or service is and what its advantage is. Very often this is easier said than done, because the real value of the product is often very different from that in the eyes of the startup developers. That is why marketing research is needed, which helps to understand how to build a relationship between a brand and a consumer, how to “package” a product in a beautiful wrapper, and what product functions are in real demand, and which, by and large, no one needs. A good marketing strategy should be comprehensive and include both short and long term objectives in line with the founder's vision and the company's mission. Advertising should explain what role and position the company's products or services will take in the market. Proper marketing leads to the fact that the company acquires new customers more efficiently and faster, many of whom become loyal to the brand. One classic example of extremely successful technology marketing is Apple. She has managed to attract a huge loyal customer base by making her products user-friendly and intuitive. All because old Steve Jobs had a vision: people should not use Apple products, but experience them. making their products user-friendly and intuitive. All because old Steve Jobs had a vision: people should not use Apple products, but experience them. making their products user-friendly and intuitive. All because old Steve Jobs had a vision: people should not use Apple products, but experience them.
Problem #4 Missing the required command
Some skills are key to the survival of a startup and its successful growth. Therefore, the fate of a startup often depends on whether its founder knows the people with what skills should be on his team, and how to attract them. The challenges of not having the right people on a team are varied: finding people takes time and effort that could otherwise be spent on productive work, but a lack of people creates an overabundance of work, which can delay the launch of new products or services. And most startups can't afford to waste time.
Solution
The solution to this problem is quite trivial - it is very important to have a well-thought-out strategy, including with regard to the formation of a team that will work on a startup. The founder needs to focus on hiring key performers and be attentive to applicants for the right roles in the team, selecting those people who are suitable for the company and motivated to help it achieve its goals. The key difference between finding team members for a startup and hiring employees in a full-fledged company lies in several nuances. First, people working in a startup often need to be multifunctional, that is, capable of doing different jobs, because most startups cannot afford to hire a separate employee for each important function. Secondly, you need to hire people to work in a startup, who can and want to show actual results and have real skills in their field, and not just the notorious soft skills, the presence of which often helps typical office mediocrities to occupy important positions in large companies for years, sometimes even achieving enviable career growth. And thirdly, ideally, each member of the startup team should be motivated to participate in the formation and development of the company, and not just perform the work that is assigned to him.
“There is only one thing worse than starting and failing – not starting at all.” Seth Godin, serial entrepreneur, founder of Squidoo.
Problem #5 Competition
Competition is another problem that any startup will have to face sooner or later. Startups that haven't been killed by bad planning or bad marketing can be swamped by competition. At the same time, startups have to fight competition at two levels: on the one hand, they compete with large companies that dominate the market and raise the threshold for entering a business, and on the other hand, startups compete with each other, because every year a lot of new companies appear on the market with innovative ideas and ambitions to win a place under the sun.
Solution
However, competition is a useful thing, because it is what forces businesses to improve their products in order to win the trust of consumers. New opportunities for entrepreneurs regularly appear on the market precisely because consumers get tired of their usual products or services and are ready to try new things. Therefore, the best weapon for defeating competitors is often thorough research and analysis of the market, its niche and the target group of consumers. It is best to deal with the competitive field right away, at the planning stage. To do this, it is not necessary to immediately form a marketing department. If there are problems with this at first, it would be a good solution to contact a third-party agency or an individual specialist who just deals with strategic analysis and planning for startups.
“Creativity comes from the need to overcome limitations.” Biz Stone, co-founder of Twitter
Successful Entrepreneur Tips
And finally, a selection of the most successful tips for novice startups from experienced and successful entrepreneurs.
Ignore the noise in the media
“Ignore the noise in the press about other startups. Usually at least 50% of all this is false, and half of these startups will die in a year. Focus on working on your own business to be among the survivors.”
Jules Pieri, co-founder and CEO of The Grommet.
Show, don't tell
“For a startup, it is very important to constantly prove the value of your product or service in practice. Many startups declare their goal of becoming the "killers" of Facebook or some other high-profile brand, extremely prematurely positioning themselves as one of the mega giants. Instead, talking about what your company does and what it has accomplished will help make your startup's message more honest, meaningful, and believable. Make sure you always have the opportunity to show evidence of what you are really doing now, not what you hope to become.”
Shaun Johnson, co-founder of the Startup Institute.
Sometimes it's not about you
“Good advice is not to praise yourself too much when things are going well, and not to blame yourself too much when things are bad. Once you understand that luck always plays a role in success, it will make you both more humble and more self-confident.”
Ethan Austin, president and co-founder of Give Forward.
Strive for balance
“Do deep research into your ideas, but trust your instincts. Ask for the opinions of experienced entrepreneurs, but remember that advice can be contradictory, so rely on your judgment. As for the users, let's go before we get anything from them. When working on a product, think big, but then go back to the basics. Be proud of what you have achieved, but remember that you will never achieve perfection. Be aware of the competition, but don't worry about it. Understand that the world may not accept your idea, so know when to drop everything and move on. Luck and perseverance are just as important as ideas and talent. Don't take yourself too seriously, even if you're trying to change the world.”
Jamyn Edis, Founder and Head of Dash Lab.
Make your own decisions
“We have been fortunate to have many great mentors while working on our startup, EverTrue. But often these mentors gave conflicting advice. “Focus on big clients!” “No, focus on small customers!” “Use the B2C model!” “No, use the B2B model!” Mentors simply give advice based on their own professional experience and limited understanding of your market and your customers. At some stage, I realized that while the opinions of mentors can be very useful, in the end, all decisions should be made by the founders of a startup, and no one else.”
Brent Grinna, founder of EverTrue.
“Aim for frequent failures in order to achieve success as soon as possible.” Tom Kelly, CEO of IDEO
In the first part, we analyzed the pros and cons of starting your own startup for programmers, and also talked about why 90% of startups fail. This article will talk about the most common difficulties that most startup founders will have to face in developing, managing and promoting their product, and ways to overcome them. We will also analyze the most interesting tips for beginners from experienced IT entrepreneurs and investors. 
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