Though the relentless march of technology never ceases, last year’s innovations came largely from proven commodities. One quick look at the numbers makes it apparent: 2013 was not a good year for tech startups.
As the saying goes, those that do not remember history are doomed to repeat it, so what changed in 2013 that made tech startups a shell of their former selves? And how can you avoid a similar trend for your own startup in 2014?
The Conditions That Led to a Slow 2013
The major reason why tech companies had a sluggish time last year was due mainly to a lack of investment capital. The defensive economic market in general played a large role, but adding to the problem was Facebook’s maligned public offering -- one that made casual investors wary about the current marriage between popular, modern technology and classic financial strategy.
The lesson to take away from this situation is that seeking funding for a startup depends on many factors beyond simply whether or not your startup is a good idea. Investors are greatly into things like predictive analysis and historical trends, and the reason is simple. The reason that investors invest is because they want to get the fastest, largest return on their money. Some may be in it for philanthropic or high-risk reasons, but the majority of people willing to offer your startup money is because they think it can turn them a profit.
Even if your business is poised to do great things, investors will shy away if someone tried something similar and wound up losing money. While you shouldn’t sit around and wait indefinitely for market conditions that favor your company, it’s important to be aware of what kind of capital you’ll be able to attract in the wider scope of things.
Bucking the Trend: How to Make 2014 Robust for Tech Startups
Anybody hoping to introduce a tech startup in 2014 is looking at a different market already -- thanks to Twitter’s massive success in their own IPO -- but there are a number of steps companies can take to entice investors in this current calendar year.
You should be able to explain to potential investors why they should offer you money. A simple, long-term business plan is a great tool in showing investors how you intend to keep pushing your startup forward. A lot of tech startups know what they want to make, but don’t know how it should be monetized, marketed, or manufactured.
One look at the success of crowdfunding at the concept makes it apparent: these are companies that have an idea and want only to make it. They develop a specific relationship with individual customers immediately and forego the possibility to grow and support a brand in most cases. Just compare the list of successful campaigns with that of companies that have been prolific after the release of the product in question.
Also, don’t think that you can’t get anything done without money. A lot of planning and conceptual work can be done without any outside assistance, and you should also have been saving some resources of your own to bring this dream to life. Waiting until it becomes crucial to gain additional funds means that you will have more control over your company, a more complete product to show investors, and a bigger share of the eventual profits. Knowing your craft is also key to steering your tech startup in the right direction, and it’s imperative to not only have people working with you who know the ins and outs of the tech you’re focusing on, but to eat, breathe and live the tech yourself. Getting acclimated with the behind-the-scenes areas of your field isn’t even that difficult, with resources like FreeCCNAStudyGuide providing study guides on everything from computer routing, networking, switching and more.
It’s too early to determine whether 2014 will be lively and promising for startups like 2012 was, or cautious and difficult like 2013. Either way, a sound long-term strategy and as little a reliance on outside funds as possible will make the early stages of your tech startup easier to navigate and succeed in.