Did you know that entrepreneurs in the US launch around 543,000 small businesses every month? According to startup statistics, as many as 50 million companies enter the global market every year.
So, should you consider jumping on the bandwagon and launching another tech startup?
Well, this is a tricky question, and it requires an in-depth analysis. For that reason, we decided to dive deeper into the world of technology and startups in the United States.
Fasten your seatbelts, and let’s get this show on the road.
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Startup Statistics in the US
At the moment, startups are one of the pillars of the American business economy. Companies like Apple or Twitter started as startups. The same goes for Uber and a multitude of other brands.
What’s more, startup statistics reveal that a quarter of the world’s unicorns come from Silicon Valley. San Francisco still ranks high on the list of the best cities for startups.
Nevertheless, the average survival rate for tech startups in the US is 10%. Moreover, eight out of ten startups cease to exist within the first five years.
For instance, startups that deal with transportation or construction have a 75% failure rate.
Therefore, it is clear that entrepreneurs need to be on top of their game at all times if they want to succeed in the world of small business.
On top of that, the IT sector is more competitive than ever. Here are the reasons why owning a tech startup can be a challenging task. Without a doubt, this mission is not for the faint of heart.
Why Do Many Tech Startups Fail?
If you are thinking about starting your tech company, these are the traps to avoid.
First of all, you should know that 42% of startups fail because there is no need for their services on the market. Furthermore, startup statistics show that 35% of them had the wrong business model in the first place.
Thus, it is essential to position yourself in a niche that offers plenty of business opportunities.
Similarly, almost a third of tech startups fail because they run out of money. To be precise, 21% of startups in the US fail because it takes a while for their business to turn a profit.
Most importantly, as much as 13% of tech startups fail because the owners lose focus. No matter if the reason is a lack of passion or burnout, the bottom line is that the owners decide to shut down the business soon after the launch.
So, if you want to open another tech startup, you should thoroughly evaluate your and your team’s abilities.
Let’s take a look at the steps you should take if you want to run (yet another) successful tech startup.
Things to Consider When Launching a Tech Startup
As we said, one-third of startups in the US fail because they choose the wrong niche or a faulty business model.
What does that tell us?
Well, one of the crucial things you should pay attention to when launching a new startup is market research. In other words, you should invest plenty of time and energy into the analysis of the industry.
That said, it is vital to establish the proper pricing structure for the product or the service you are trying to sell. So, define the features of the product in full detail before you decide to do anything else.
Nonetheless, the majority of tech experts will agree that the critical thing is to start lean, without a complicated structure. Thus, you should try to lay the foundations of your startup during the early days, not plan for ten years in advance.
By doing so, your focus will stay on the tasks that have the highest importance.
To help you out, we provided a comprehensive guide for starting a tech startup. Let’s take a quick look at the best tips and tricks for launching a new business in the tech world.
Tips and Tricks for Launching a Tech Startup
First of all, you will need to create a business plan. Every self-respecting entrepreneur understands the importance of this document.
Thus, make sure to include all the relevant aspects of the business in the blueprint of your company. If you already have experience with running a tech startup, then you can copy the essential elements and use them to get the general idea.
For instance, 8% of emerging startups quickly fail due to legal challenges.
On the other hand, the financial aspect can also be an issue for tech startups. Therefore, you should start looking for suitable options as soon as possible.
Plenty of entrepreneurs decide to bootstrap the business. In essence, this means that the owners use money from their savings accounts to launch the startup.
Then again, lots of startups are in search of the so-called angel investors. The creditors can provide you with financial support for the venture. However, you will have to give the capitalists 10–15% of the company in return.
Once you have secured the funding, you can move on to the technical aspects of starting a tech company. For instance, you will need to hire the most skillful team of designers, engineers, and developers.
Depending on the scope of your endeavor, you may also require accountants and marketers. That said, emerging tech startups should pay attention to the quality of their branding as well.
So, create the best-looking logo and design an intuitive website if you want to attract customers in this day and age. Of course, the process of buying a domain is also a part of the job.
Make sure that everything is responsive, optimized for SEO, and the usability of the website is at the highest level.
As you can see, there is more than meets the eye when it comes to running a tech startup. After all, the tech industry is a competitive arena. Companies like Apple or Twitter do not just appear out of thin air.
At the same time, the tech industry is a place where anything can happen. With enough hard work, your startup could climb to the top in no time.
For that reason, the ideas we provided in this guide can be your golden ticket to launching another successful tech startup.