While starting an online or tech business may sound daunting, it doesn’t have to be. The internet is a vast repository of helpful information on how to start a tech company, and in the 21st century, online businesses are the new norm. Having a great idea is an excellent place to start for launching a tech company, but it isn’t enough.
Regardless of whether your business is online or has a physical location, you will need to name your business, select the business structure best suited to you and your company’s needs, and likely register your business with the relevant local, state, and/or federal authorities. Beyond these initial considerations, you will need to consider the challenges and opportunities that are unique to this type of entrepreneurial venture.
How to Start an Online & Tech Business
While starting an online business may be uniquely challenging, it can be extremely rewarding in today’s digital age. The following are the first steps to consider when starting a new online or tech business:
1. Determine your niche by the market need for maximum success.
Many people seeking to open an online business make the mistake of devising a product first and looking for a market for that product next. In reality, you should determine before you start your business whether there is a market for your product. This is because you must ensure that the product you are offering is filling a need and therefore can be profitable. While having a business idea is a great first step for an online tech business, you will need to ensure that your product idea is actually relevant to people’s lives and that they are willing to buy your product.
You can find your niche in a variety of ways. Ideally, you should try to find a group of people who are looking for a solution to a problem but do not have a lot of existing ways to solve their problem. The internet can be a great place to start to identify your market. Oftentimes, people will post to online forums and web communities to ask about ways to solve a problem. In addition to checking online forums and message boards, you may want to conduct keyword research to see what people in your market are searching for on the web.
Finally, survey the competition by visiting their sites on the internet and take note of what they offer in terms of products and services. Using all of this information, you can craft a product and brand identity that can help people fulfill a specific need and outpace the competition in the process.
2. Initially, keep things simple.
While you may be tempted to start your e-commerce business with a big, fancy launch, the truth is that setting up your business in this way gives it a high risk of failure. Therefore, you will want to keep your initial business rollout to a few core features, based on the research you conducted of your target market, as we discussed in Step 1 above. You can minimize the risk of your venture failing by conducting research to define your target market, plot out how individuals will use your technology and eliminate any features that are not high-priority.
3. Evaluate your target market.
Having a good idea of your target market will set your business up for maximum success. You will need to determine who the ideal customer is for the products you are selling online – this includes figuring out their age, occupation, location, income, and what they read, listen to, and watch on a daily basis. Of course, you will also need to become knowledgeable about the problems they are facing in order to craft an engaging storyline about how your product can simplify and improve their lives.
4. Establish a minimum viable product (MVP).
Once your business is more successful, you can choose to serve multiple customer types, but it’s best to focus on one target market in the early stages of your business venture. Therefore, strive to keep things simple and basic in the initial stages of your business development, offering a product with the most high-priority features targeted towards a single, specific audience. It may help you to engage in storyboarding in this phase. In storyboarding, you develop a story narrative about how people will interact with your technology at each step of the way as they seek to obtain a solution to their problem through your product. Storyboarding will also help you determine which features are essential and which can be omitted for a minimalistic, viable product. Your minimum viable product is essentially the first version of your product, reduced to only the most essential, core features, which can help your market achieve a solution to their problem.
To establish a minimum viable product, you may consider many different structures that enable you to learn more about your consumers and their needs and determine market interest. For example, you may choose to set up a website, drive traffic to the site by online marketing, and perform analytics on the site and see how many people sign up for your product.
To determine market interest and raise money for your venture, you may instead consider opting for a crowdfunding campaign, in which you can measure how many people donate. Finally, you can offer some or all of your services in a hands-on and/or automated manner to generate feedback, help brainstorm new ideas, and learn more about your potential consumer base. You will want to learn as much as possible about your potential customers, their needs, and their behaviors to ensure the best possible launch for your minimum viable product.
5. Once you have a minimum viable product, attract early adopters.
Early adopters are your business’s very first customers, who could be a very powerful source of information and consumer insight for your business and could also be your brand’s most loyal following.
To recruit early adopters, focus on driving a small percentage of your users within your target demographic to sign up for an early version of your product. You don’t need more than a couple of hundred early adopters, and they serve as a powerful and highly informative source of insights. Early adopters can tell you whether your product is indeed filling a need in the market, or if you are spinning your wheels. Save your energies and reach out to just a few hundred people rather than launching an aggressive marketing campaign. Offering extra features to early adopters is a very popular business structure in online and tech companies and could drive repeat business if your venture does end up being successful thanks to your early adopters’ unique insights.
In addition to the early adopter model, you will want to start building awareness for your online e-commerce or tech business both in real life and on the web. You may consider a more grassroots approach by flyering college campuses and becoming active in online communities and forums. Another approach is to start developing relationships with social media influencers on YouTube, Facebook, Instagram, and other popular online platforms. You can allow influencers to test your online or tech service for free, and offer their honest opinion in exchange for access to your product.
6. Monitor analytics and crunch the numbers.
Once you’ve put in all of the work to develop your core product with the essential features that help fulfill a need in your target market, you’ll want to make sure that you’re continually analyzing how users are interacting with your product online. This will tell you which of your solutions and strategies are working and which ones you need to cut or adjust before allocating further resources.
Consider not only how many people are signed up for your service, but what subset of those users is regular, active users. Analytics such as average visit, user behavior, and retention rate can clue you into how customers are interacting with your business’s website. Pay attention, also, to ratings and reviews, as they offer objective customer insights and are relied upon by your potential user base to determine how useful your product or service is to them. Nothing tells the story of your business better than the cold, hard numbers, so take the time to do the math.
7. Carefully plot your next move.
Take some time to investigate what the user analytics is telling you – and use it to plan your next move. If everything’s going as expected, then you may not need to change anything in your business plan. In a perfect world, this would be the case; however, a more likely scenario is that you will need to make adjustments or improve upon your service to make it match customer need. This could include conducting a competitive analysis to determine what competing services can be improved upon, to help you better define your position in the market. It could also mean that you need to look inwards to determine what features users are taking advantage of the most, and other metrics specific to your business.
The reality is that in the dynamic and fast-paced world of online and tech businesses, you will need to rely heavily on data to see whether you are meeting your business goals. Failing to take advantage of the many opportunities to gain insight into your business metrics in a timely matter could potentially lead to the demise of your business.
8. Become an expert in online business law.
Trademarks, shipping, and zoning can make or break your business, so make sure to learn about the legal issues that affect those engaged in online business. Make sure to consult with a lawyer, if needed, to determine what business licenses you may need to successfully ensure that your business is in compliance with all local, state, and federal rules and regulations.
The most important aspect of starting a successful online tech company is to pay attention to details, start slow, and work in small efficient increments to decrease the risk of failure. After you develop a business idea driven by the market, make sure to minimize the product to its most essential, high-priority features. As an entrepreneur, you want to make sure that you provide useful content to the consumer beginning from the earliest stage of your internet business in order to fulfill a need for the user, which will help your profit margins as more and more users learn about and purchase your product.
You will need to start a website for your online and/or tech company so that you can have an internet business presence, which will help you better sell your product online. There are many helpful tools on the web which can help you with the specifics of how to create a business website, and if needed, you can enlist a professional web development service. Consider marketing the product to a couple hundred early adopters in your business’s initial stages. Once you have launched your product, don’t forget the importance of data analytics and user feedback. The cold, hard numbers can tell you whether your products and marketing strategies have been successful, and if they have not met your business goals, can help you devise new strategies.
Startups that survive these initial stages and can offer a validated solution can seek initial seed funding and are more successful than other startups in doing so. This is because startups that follow these stages prove that they can develop an innovative product and market it in a way that is well-planned and strategic.