Building A Tech Startup: Avoiding Silicon Valley Mishaps


Every startup faces an initial period of uncertainty and perhaps even public resistance, but the tech field has its own pitfalls that can break a fledgling company before it ever has a chance to find its footing. If you’re looking to bring a product or service to the world that no one has seen before, you’d better make sure you know how to keep it afloat lest a larger company swoop in and carry away all of your hard work.

Beware the tech kill zone.

There are numerous horror stories of clever startups falling prey to a larger, more well-established company hastily offering a competing service to drive its competitors out of business. Unfortunately, tech startups are in a unique sphere that allows companies to produce off-brand services more quickly than would be feasible in the case of a physical product, making it a treacherous field to rush into without a developed idea and something tangible to offer the public.

The technological kill zone can be brought about by direct action from larger companies or even the assumed threat of an established entity pushing towards the service you intend to provide. Google notably bought out Picasa, an early website dedicated to photography and photo sharing, only to reduce its budget and quietly starve it out of the internet when it failed to perform to expected levels. Instagram soon came along and scooped up the remains of its user base, leading it to take over its corner of the market where Google could have easily succeeded.

Worse yet, they may simply hire employees of high skill out of your market area and deny you the workforce you need to make your idea feasible. Make sure your idea is planned and in the process of being brought to life if at all possible.

Predict trends, don’t chase them.

Following what made a tech startup popular five years ago will rarely, if ever, lead to success. What passed as a trend half a decade ago is likely outmoded and could even be dangerous to pursue if company culture and regulations have changed significantly.

For example, companies are moving into the sphere of privacy-respecting AI in a bid to avoid coming fears and regulations relating to AI, machine learning and data harvesting. If your company simply focuses on aggregating data without care for the end user’s privacy and national regulations start to exert pressure on unethical data processing your business may be doomed from the start.

If the market demands privacy, find new sectors struggling to provide it and throw your hat in the ring. If you hear of a common recurring problem in your field of expertise, try to solve it. If everyone is oriented on technical skills and public relations are suffering, look to soft skills. Predicting what the industry needs is key for any startup.

Watch your fundraising.

There’s always going to be a lingering motivation to raise funds for your startup unless you happen to be independently wealthy. Yet as soon as you do, you allow investors and outside hands into your business that may not have the same goals and ethics as you do. Worse yet, your fundraising history might actively work against you if you opened the floodgates too soon or handed out too much stock in return for small investments.

Finding the right time to open up to investors requires knowledge of your field and a careful eye on the public’s reaction to your offerings. Confer with a corporate strategies expert and beware financiers hovering over your shoulder with small investment offerings for an inordinate amount of stock. It could keep your startup afloat for a short while, but the long-term damage may be much worse than a cash flow problem.

Avoiding basic issues with a startup requires a mind for business and social relations, but avoiding the pitfalls of the field of technology means shoring up your defences from companies with more manpower to throw at the problem you’re trying to solve. As long as you don’t leave the gate too early with ideas half-formed, your business can grow to meet new challenges in due time.

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