The majority of tech start-ups are propelled by dreams of becoming a paper billionaire. In fact, in this tech-driven world we live in, launching a tech start-up it is becoming easier and easier. On the other hand, turning your genius app or web service into a global giant that attracts millions of users can be more difficult.
Not everyone experiences the success of global giants like Google, Facebook, Airbnb, Uber and Spotify – 90% of all early stage businesses fail. The reasons can be anything from lack of investment, customers or sales. According to research company CB Insights, there are only 143 ‘unicorns’ – privately-held tech companies worth more than $1bn – worldwide. Of this number, half are based in the United States.
Every tech business began with one big idea. When giving advice once to other tech entrepreneurs, Brain Chesky, co-founder and boss of Airbnb, said to “build something 100 people love, not something one million people kind of like”. Ask yourself some important questions: what problem does my technology solve? What service does my tech provide that has never been provided before?
Being able to look at your idea realistically is powerful. Many people come up with great ideas, but fail to realize that it does not quite make it as a real business venture. Greg Wolf, of corporate finance house Widebridge Group, also advices to make sure that an idea is “protectable”. In many sectors, there is really only room for one market leader. According to Wolf, this is especially true if you are targeting a consumer audience. Consider Facebook, Amazon and Google – the largest social network, e-commerce business and search engine. Wolf shares that, in some cases, “it really can be a winner-takes-all game”.
Another big challenge in building a successful tech businesses is finding skilled people who share your vision and purpose. By hiring great people, you will attract more great people to work for you. However, if you compromise, your business will suffer for lack of talent and inspiration.
According to Zack Sabban, founder and executive of Festicket, the huge challenge for fast-growing tech companies is retaining its culture and values as the number of employees begins to grow. “If you have a strong company culture, people will be more independent, autonomous and entrepreneurial,” he explains.
In the midst of your plans, don’t forget the importance of your location. It greatly affects how successful you are. According to CB Insights, 60% of today’s biggest privately held start-ups are located in the United States, 23% in Asia and 13% in Europe. Why? Europe’s venture capital firms are historically heavily staffed with bankers and accountants, making them more risk averse. In the U.S., many investors have been tech entrepreneurs themselves. These individuals have built successful companies and are more willing to take a chance on new ideas.
For U.S. tech start-up, there is a huge advantage – a huge, ready-made and largely monolingual market just waiting for them. Tech start-ups can grow quickly and move globally from the very start. With the right merchant cash advance program – like the one offered with FAM – your big idea can “go big” and global in no time!