MBA1639 5 Principles of Starting a Tech Startup

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Hey O. Welcome to the $100 the Business podcast you reach for to improve your business every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online. And in today's lesson you will learn the five principles of starting a tech startup. For those who have been following me, you know that I run a software company, Webinar Ninja. I started it back in 2014 and I learned a lot of hard lessons along the way. If you're thinking about starting a tech startup today, here are five principles I think you should live by to improve your chances of success. These are the five principles I wish somebody taught me when I got started back in 2014. These are critical, critical, critical. If you get these right, it's hard for you to actually fail because they protect you. They they make sure you're on the right path. So let's get into it. Let's get down to business. All right, let's jump right into the five principles of starting a tech startup. Principle number one is validate everything when you're an expert in another area. Let's say you're a great volleyball player. You played volleyball for 30 years in your life, maybe you even were a semi pro. There are things you know instinctually about volleyball. You feel the sense of like, I know what's right, I know what's good. The eye test, so to speak. And therefore, if you delivered a course on volleyball, you would probably do pretty well. You know your stuff. But when it comes to software, it's a different ball game. You may think you know what customers want. A lot of people feel like, hey, if it scratches my itch, that should be enough. It's not enough. You have to validate because you need enough people, enough of an audience that thinks that they need this product in order for you to be a viable business. We're trying to be a viable business here, not just a novelty or some sort of hobby project. And you need customers for that. So you need to validate everything, every step of the way, from the moment you start, until you actually sell the business one day, or whatever your goals are. The point here is that you have to validate, and that includes in the beginning, with a minimal viable product. Don't just assume that people will love this thing when it's finished, when it's in its deluxe form. No, what you want to do is create the most minimal viable version of your idea that solves one pain, one major pain. And you want to do this as quickly as possible, because if it doesn't get validated by the audience, by the people that actually are interested in this, whether you're using beta users, whether you're giving free access, whatever, people don't give you great feedback or are willing to, you know, use it or pay for it with maybe pre sales, you need to pivot quickly, change, improve it, use that feedback for good. So validate everything, especially in the beginning when you're trying to get your footing. So principle number two, and I kind of hinted at it in the first principle, and that's when you try to solve many problems, you solve no problems. The best startups start with solving one specific problem and they just do it really well. They really solve the problem very, very well. Just one single thing. It actually accomplishes one single goal. I can give you countless examples. PayPal, I can send money via email. That's really what it does. That's it. In the beginning. That's all it did. Okay, Dropbox cloud storage. I could store my files in the cloud and access them anywhere. That's really all it did. That's it. For the most part. That's all it does right now. That's really its value metric. That's really what it does. So just focus on being a solution to a problem, a great solution to a problem. A lot of us, when we start a new tech company, we're like, it could do this and that and that and that. And what happens is it's really hard to describe to people what it does and its benefits versus like my company does X, that's it done. And it's just clear to people, oh, I could see the, you know, the value in that. So just solve one problem at least at the beginning. Just do this at the beginning, nail that solution, get some traction, and as your company grows, you could start solving other problems that your customers have. But start with one, really nail the solution. Principle number three, high quality, low complexity. That's really what you want to aim for with a really good tech startup, a really high quality product, something that is reliable, that doesn't crash, that is very easy to use in just a very specific way. High, high quality, but very low on the complications. Meaning it's not bloated, it's not trying to do so much. There's not a huge learning curve for the user. There's not too much to get lost and get overwhelmed by these types of products. These types of apps really succeed because, because it gets the customer or the user really onboarded really quickly and it gets them adopted to the app very easily and makes it indispensable to them because, hey, this thing does this, I get it. I've mastered it very quickly and I can use it over and over. And by the way, the simpler, the simpler your software is, the easier it is for you to maintain, to solve problems, to fix bugs. The more reliable it is, the more stable it is, the simpler, the better. Keep it simple. This should be a mantra in your whole business, okay, because this is really going to allow you to save yourself a whole bunch of headaches in the future. The more complicated your app is, the more chance it will have to crash to have problems, to have bugs. This is just well known. Many apps that have so many features, every time they do an update, there is a chance something's going to break because of that update. So especially at the start, be super simple, but really have high quality. Now, with any tech startup, you're going to need some help, okay? Even if it's a co founder or, you know, you're hiring some freelancers, it's very hard to do everything in a tech startup to design the product, to design the UX ui, to develop, you know, to code, to do all the DevOps, all the server management to lead the team. And by the way, you gotta market and sell this product and do customer service and do promotions and have policies and all that kind of stuff, right? You're gonna have to start building a team and when you do that, really emphasize on getting the best people you can. I rather you hire two really high quality people than hire five mediocre people or even six or seven mediocre people. I've worked with people that have done the work of 10 people. I've hired developers that actually produce as much work, high quality work, as 10 other developers. That's why it's so important to really get quality team members. That's principle number four, quality team members. You get what you pay for, you have to spend. It's better for you to have less and then get the best as much as possible. Great workers, great communicators, great team members. And principle number five, when it comes to starting a tech startup, double everything. Okay? Everything you plan on doing, double it. Okay, the amount of time you think it's going to take to develop the beta product, double that time you think it's going to take three months, plan on six months. That's just the reality of tech. And you could tell me a million things. People should know how to stick to deadlines. That's just not the real world. The real world is that there are delays, there are things that come up and people just are bad at estimating. So double it. Budget wise, double your budget. When it comes to what you think you're gonna spend, how many leads you're gonna need to convert, the number of customers you need to launch with, double it. So you say, hey, I just need, you know, 101st customers. So I only need about, you know, a thousand leads. Cause I can convert a 10%. No, get 2000, get 3000, double those numbers. So double your numbers is principle number five.

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The five principles that I shared with you today in starting a tech startup are the principles I wish somebody told me at the start of my journey. Go back, rewind them, write them down, keep them handy, put them on a post it note on your laptop just to remind you to stick to them. Thank you so much for listening to the $100 MBA show. If you love this podcast and you've been wanting to start your first online business for some time, then I encourage you to check out my new audio course on Himalaya called Start yout First Online Business over@himalaya.com MBA and guess what? If you use my special promo code MBA, you can get a 14 day free trial. That's an exclusive trial that I can offer my people. So go ahead and check out my 10 part audio course Start yout First Online Business over at Himalaya.com MBA and use promo code MBA before we go, I want to leave you with this. Tech startups are very attractive because people feel like they grow and they scale and they can be incredible. And that's true. But you really need to get the market right and the audience right to be able to scale a tech company. It's not really about the product, so to speak. I know that sounds crazy, but it's the truth. You really need to go to a market that is really willing to buy. It's good to have competitors. It's good to have a place where people are buying but go to an underserved audience. A good example of this is Canva. People need graphic design. It's just a staple of business and work and life and school. But not everybody knows Photoshop. So Canva created a product for people that are low tech, that don't know Photoshop, that want to do some simple graphic design that looks great. So they went to a very busy market graphic design and served an underserved audience. Go for that and you'll find it a lot easier to scale. Thank you so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care. Of.

ADP knows anything can change the world of work. Like what if a blocked shipping port caused a worldwide coffee shortage. Suddenly, businesses are scrambling to manage an increasingly drowsy workforce. Productivity slips 20% just due to the extended time it takes to conduct a job interview while yawning. Anything can change the world of work from HR to payroll. ADP helps businesses take on the next anything. ADP always designing for people.