6 Biggest Mistakes Tech Startups Make

Launching any kind of a company or product is inherently risky—and tech companies are no exception. No matter how much of a slam-dunk you think the product is, there’s always room for error in your business model, your marketing methods, and more. Sometimes, it may simply be a matter of the wrong product, wrong audience, wrong timing, or some combination of the three.

With that said, there are steps that any tech entrepreneur can take to mitigate risk. Start by familiarizing yourself with the ways in which other tech startups go wrong. Here are six of the most common errors—and some directions to avoid them.

Lack of a Clear Product Vision

To launch a successful startup, you’ll need more than just a fuzzy idea. You’ll need a real, fully fleshed-out product that you can present to your audience. You’ll need to know the product inside and out; to articulate its value proposition, and to discern the ways in which your product stands out from the competition. The bottom line: If you don’t have a clear vision of your product, then you really don’t have a company yet.

Lack of a Clear Marketing Vision

You may think you have the best product in the world, but the simple truth is that there is no product that sells itself. You’ll need some effective marketing, and that means knowing the audience demographics for your product; it means knowing your customer’s pain points; it means knowing which online platforms make the most sense for reaching that audience, and it means being able to condense your marketing message into something punchy and enticing. Think back to what we said before about knowing the value your product offers, and what sets it apart from the competition; that’s really the genesis of your marketing message.

Not Realizing How Much Money You’ll Need

Simply put, you’ll need more money than you think. There are always going to be surprising costs incurred as you try to get to the next level, including marketing and distribution expenses that you may not have factored into your original budget. Know where you can get additional capital if you need it, and how long it will take for that money to come through.

Overspending Early On

Another common mistake that tech startups make is overspending on costly in-house talent. While you’ll definitely want to have an eye toward team-building, it’s vital to have the other eye on your budget. This might mean it’s more logical to outsource or use freelancers as you get your business off the ground, especially for things like SEO and website design. Relatedly, it’s important to be modest about how many offices you open, which big and fancy tools you purchase, how many crazy parties you throw—all extravagances that can inflate your overhead.

Not Setting the Right Expectations with Investors

Some investors, especially angel investors, will want big results right away—but for many tech startups, that’s simply not a realistic expectation. Other investors will want to micromanage everything—likely, not something you want to see happen. Be very clear and intentional in setting expectations from the get-go, avoiding both of these unwelcome developments and keeping investor relationships positive.

Neglecting Research

Finally, tech entrepreneurs have plenty of opportunities to research their product, their market, and their competition—but many fail to do so. Make sure you avail yourself of all the research opportunities you have.

By avoiding these six common errors, you can put your tech company on a firmer foundation—and minimize the risks that startups face.


Author’s Bio: 

This was a guest post by Al Sefati who is an SEO and digital marketing expert with more than 15 years of experience in the field of digital marketing. He is the founder and primary consultant for Sefati & Co, and serves clients with their SEO, digital marketing and website needs.