What is the most common cracking point in Tech Startups?

We love working with Tech startups.

There are so many advanced innovations that come out of the technology industry and it is an exciting world to be a part of.  With a high mortality rate the tech sector can be hard to crack, so here's are our view on the good, the bad and the awesome of the tech industry and why you shouldn’t be deterred by the high failure rates.

Find a way to make your mark!

While there are some big players in the market, the smaller companies can still be really competitive and make their mark. There are so many opportunities, so many different niches and markets that you can develop something very specialised and still be very successful. With a global market and the internet even if you have a very niche product you can get it out to a bigger global market.

Have you noticed our #FridayExpertTips... here's one that relates to #Technology

"Many Startups succeed because they've identified a niche and have cornered that market. By discovering a service or product no one else has thought of, or at least effectively pulled off, you give your company a shot at success."

Nevertheless, a fact that a lot of tech startup businesses fail is a sad and harsh reality. The tech industry is seen as being even more volatile than other industries. With the tech startup failure rate at around 90% it can feel a bit daunting, however, just remember that someone has to be the 10% and maybe you will be the 10% that shines.

So, what is the most common cracking point in Tech Startups?

#1 Missing Market Validation
Making sure you validate your market before you start and really securing the right product for the right market is critical to success. Often people who fail create something that no one wants, or needs. While you didn’t know you wanted an iPhone till Apple made it, they had a multi billion dollar marketing budget to educate the consumer. If you don’t have a big marketing budget stick to solving a problem that people know they have.

#2 Having the wrong team
The other reasons businesses fail in this industry is that they have the wrong team. The people function in startups is extremely important. The wrong team can mean that the product doesn’t do what you initially intended it to do, you didn’t get it to market fast enough and you don’t have the right people in place to promote it for you.

Related: Most CEO's miss these 3 things when scaling their business

#3 Bad Cashflow
For almost a third of businesses, they simply run out of cash. They underestimate how much it is going to cost or it is taking too long to get it off the ground and they can’t support the wages of people or the production of the product without the sales coming in with revenue.

Related: How business owners can avoid Cashflow crisis?

#4 Lack of support
At some point in your business lifecycle you will hit a ceiling and realise that strategic advice from those that know their particular area of business exceptionally well can speed up your progress and success. You need to have a big picture, long term view to ensure that what you are building for today will also have the longevity that you require for the business.  A lot believe they can go it alone but the reality is seeking strategic guidance from a talented pool of Advisors will only help your business navigate it's way through the many layers of growth and challenges that you will face.

Azure Group works with high-tech and emerging growth tech companies because the challenge of seeing you succeed is what drives us to work harder, think smarter and be at the forefront of our industry. We offer a range of services that support the evolving needs of a tech company.

Related: When is the right time to engage an Advisor for my Startup?

If you want to succeed you have to do your homework!

So there are still huge opportunities for businesses wanting to play in this space. But the key message from us is to do your homework. Firstly, make sure you are building something people want, secondly, make sure you have the right team and finally, make sure you have enough money and the right support!

Have you noticed our #FridayExpertTips... here's one that relates to #Technology

"Being a Tech Startup Founder usually means an exciting world of innovation and creativity. While it's great to do something you love, you need to make a living of it. Working with an Accountant that understands the Tech sector is a great way to master proof your growth plans."