Published on May 10th, 2013 | by Jose Vasquez0
5 Major Questions Every Startup Tech Company Needs to Answer
You might feel ready to start your technology company, but you won’t get far unless you know the answers to these five elemental questions.
Starting a technology company involves a lot of brainstorming and a lot of work. Even if you have a solid central idea to drive your business forward, there are many peripheral factors to consider that will determine the eventual success of your plan. Without knowing the answers to these questions, your business plan will suffer and your entrepreneurial success could be compromised.
You can think about these questions even during the earliest stages of brainstorming, but most new entrepreneurs wait to finalize this information until they create a formal business plan.
- What problem are you solving? Every startup tech company needs to address a current problem in the market. Your technology idea should be a response to a current need or current problem, so be careful not to make up a problem that doesn’t necessarily exist just to justify your idea.
- Who is your target audience? You have to know the answer to this question, and the answer cannot be “everybody.” Think about who stands to benefit the most from your product or service, and focus on that demographic. You can always expand to other markets once you are successful in your initial target.
- How will you make money? It might seem like an obvious question, but you’d be surprised how many startup tech companies start developing technology before they understand how to monetize their efforts. You need to have a product or service that will land you a stream of revenue—otherwise, you’ll never make any money.
- How long will it take to open a stream of revenue? Understand how much time and money it will take to get to your first sale. Calculate the resources you need in order to create a minimum viable product. You can always expand and advance later, so your focus should be on getting revenue as soon as possible.
- What is your plan for growth? You don’t necessarily need all the details worked out, but you should have a plan for company growth beyond the release of your minimum viable product.
The answers to these questions should get you moving in the right direction with a suitable burst of momentum. Ignore them, and you’ll be in for a world of disappointment.