How to Build a Successful Tech Company From the Ground Up

Approximately 90 percent of startups fail before they become profitable. Nearly half of these tech company failures are avoidable.

Approximately 90 percent of startups fail before they become profitable, often because of a few basic mistakes. Nearly half of these tech company failures result from the product not being something people actually needed.

Other common causes of startup failures include running out of money or team members who weren’t well-qualified for their roles. These stats paint a bleak picture of your chances for success. However, knowing the biggest traps to avoid can give your startup a fighting chance for survival.

1. Focus on the most essential features.

Great startup ideas are often based on solving one of the founder’s own pain points. This is mainly because the founder is the person best qualified to describe such a solution. Furthermore, you can bring early adopters on board to help refine your product’s value proposition, assuming you can find others with the same pain point.

The process of nailing down the product’s required features and validating its concept is crucial to ensuring your product roadmap will take you in the right direction.

Making the right choices is critical to survival at this stage of product development, as poor product-market fit accounts for 42 percent of failed startups.

You must be careful to develop the Minimum Viable Product (MVP). Do this by focusing on just the features users need to achieve their goals. For example, a project management app needs to upload attachments more than it needs custom emojis.

2. Get into the weeds of online conversations.

Once you’ve validated your MVP and applied multiple iterations of user feedback, you need to release your product to a broader segment of your target market.

You can still lose out to a competitor if no one knows about your product, even if it has all the right features. In addition, an extensive sales team and ad campaign are usually out of the budget for most startups. This is certainly a disadvantage.

This challenge needn’t end your startup, but it does mean you’ll have to do a lot of manual promotion.

One common strategy for promoting a startup is to get involved in online conversations with prospective customers, which also helps you refine your idea. The main drawback with this tactic is that it doesn’t scale well. At some point, you’ll need to change your marketing approach as your idea gains traction.

3. Lean on customer feedback.

Keeping your customers and their problems in mind as you develop your product is key to fully realizing the sales goals for your product. A customer-based solution to an existing problem can create demand very quickly. This is true whether it’s an entirely new product or simply filling a market gap.

Inexperienced entrepreneurs often try to pursue a tech company goal without first developing a strategy for achieving it. However, the time you invest in market research, product development, and understanding your customers’ needs will pay off in the long run.

You can begin to think about marketing your product more once you have a business plan, branding, and funding in place. Market research should always be closely tied to your product, whether that research is formal or informal.

Customer feedback and reviews are inexpensive methods of conducting market research.

This is especially helpful when you plan to sell your product through significant eCommerce sites like Amazon. These platforms have the necessary functionality built into their structure. This makes it easy to find out what customers think about your product.

4. Sell your product before you make it.

Bringing paying customers on board as quickly as possible is an effective way to avoid running out of cash, especially with a startup.

Early customers have a financial stake in the product. They’re typically willing to provide their opinions in exchange for getting the features they want and are willing to pay for. Finding out that people will pay for the product you’re planning to build is one of a young startup’s most significant turning points.

Several strategies exist for pre-selling an MVP.

You can focus on achieving a single user goal, which will validate the need for that feature and promote early adoption. You can also combine existing products to develop your own unique offering, which helps minimize costs. Another option is to manually perform the product’s functions to understand the best ways to automate them.

5. Build a great team and inspire them with the vision.

Building the best team that you can is essential for a successful startup. You should typically focus on accounting, marketing, and operations, which are fundamental for most businesses.

However, hiring qualified staff is particularly challenging in the tech industry.

The U.S. currently has a shortage of software developers. You may not be able to find any with the specific skillset that you need. Even if you can find someone with the skillset, you may not be able to afford the salaries they expect.

Use the same care and enthusiasm to fill each and every position on your team. If you’re a tech company, it’s easy to think you should splurge on top talent for the dev team. Instead, find someone with a little less experience to lead the marketing side of things.

However, this can easily lead to issues down the road and less success for the company overall.

Starting from the top of the org chart down, each leader needs to be enamored by the vision and ability to drive that into their team or department as they build it out. All departments are critical to have the right leader, even if the department is only one or two people in the beginning.

6. Highlight your MVP to secure funding.

Many entrepreneurs make the mistake of thinking that funding is the first step in starting a tech company. However, it should actually come later in this process. It’s more important to ensure your idea has a market.

Get yourself some early adopters and validate your MVP before obtaining financial backing.

Scaling up funding for self-serve acquisition and improving infrastructure can be productive, but starting large sales and marketing campaigns too early is a common cause of failure.

Seeking funding after you already have a validated MVP and paying customers also will help you compete for investor capital more successfully.

7. Expect to fail.

The critical importance of speed when starting a company means that you’ll make many decisions without extensive study.

Some of these choices will be incorrect, resulting in a temporary setback. It’s vital to view decisions as changeable, making them opportunities for improvement.

Rapid decisions are part of the calculated risk-taking that’s part of launching a startup, but that doesn’t mean you should simply throw money at a project.

Building your own company also requires you to be pragmatic when making decisions. This is especially true when they involve assessing your own weaknesses.


The uncertainty of a volatile market combined with the unpredictability of a team poses a substantial risk by itself. Furthermore, the complexity and rapid advances of technology ensure that few tech startups will survive.

On the other hand, this fact allows entrepreneurs who use the right strategy to outcompete those trying to build a tech company the wrong way.

Keep these tips in mind to have a leg up on your competition and get your company started well.

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