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In our blog, we have repeatedly talked about the difficulties and challenges that new technology business projects face at different stages of development. Today we present to you an important process that largely determines the future success of the tech startup - His Majesty IT Consulting.
According to Statista, the share of technical consulting in the global market is increasing every year. For the period from 2011 to 2020 it increased by 23%. This dynamic indicates that the tech consulting market, with a high degree of probability, will continue to grow. Another factor is that one of the main consumers of IT consulting are technology startups, which are about 30 thousand in the world today, according to the data of AngelList startup platform.
As reported by the Hello Tomorrow and BCG analysis survey, conducted among 400 startups in 2016, the most important resource for creating successful deep-tech startups is financing (80% of respondents). However, market access (61%), technical expertise (39%) and business knowledge (26%) are crucial as well. For at least the last two points, it will be extremely useful to consult with experts in the technical field.
How IT Consulting can help your tech startup
Every year tens of thousands of startups are developed but, unfortunately, about 90% of them fail. As cbinsights.com notes, most new business startups get closed within the first year of work. What leads to this outcome? How to “strengthen the immune system” of a business project so that it grows, develops and produces results? What should be taken care of first when developing a startup? What does IT consulting do and how exactly does it help technical startups? - Answers to all these questions are here.
Causes of startup failures
There are many examples where even promising projects that have gathered large investments did not meet the expectations laid upon them. Among the main causes of startup breakdowns, according to cbinsights.com are: No market need - 42%, Ran out of cash - 29%, Not the right team - 23%, Got outcompeted - 19%, Pricing/Cost issues - 18%, User unfriendly product - 17%, Product without a business model - 17%, Poor marketing - 17%, Ignore customers - 14%, Product mistimed - 13%.
It turns out that there are many reasons for business startups failures, but one of the main ones is the inability to plan strategically. So let's take a closer look at this problem.
Often the cause for the startup loss lies in the “cracked foundation", that is, when founders rushed and did not pay enough attention to the detailed project planning and designing. Without this assessment, planning and recommendations made by IT specialists, a technical startup would unlikely to go.
Some data to help us
As you can see in the infographics from BCG survey, respondents of 400 deep tech startups point out technological expertise as one of the most important priorities when creating a technology startup.
Practice shows that many startup founders underestimate the need for creating a strategic plan. They rush to create a startup product, quickly test it on the market, and believe that the startup will automatically succeed if its idea is good. Others use the services of IT consulting.
Information technology startup consulting is not just about giving or receiving advice. In fact, everything is much more complicated. Effective and successful tech startup consulting involves a number of processes and services, such as evaluation, analysis, development of an IT strategy implementation system, system management, and more. IT consulting is critical in the very early stages of startup development. You'll hear about this from managers of the startup projects that became the heroes of our article.
So how does startup consulting work?
Let's take a closer look at how this “machine" works. Tech startup consulting helps founders of a business project achieve their goals and make them ready for solving real problems of implementation and functioning of the system.
IT consulting is carried out at the very early stages of a startup, most often at the Pre-Seed and Seed stages, and its impact on the further development of a business project is enormous. IT consulting allows the development company to study your business as accurately as possible and develop software that will really bring satisfying results.
Startup consulting includes:
- strategic consulting (or strategic planning)
- tactical consulting, which, in turn, consists of:
- architectural planning
- operational assessment
- implementation planning
Strategic startup consulting as it is
Purpose: To help the startup team assess IT needs and formulate plans for the implementation of the system, as well as adapt future software to the business model and goals of your company.
More about the process: To put it briefly, the strategy is all about “What?”. In other words it helps you answer the question: “WHAT are we trying to achieve?”. During tech startup consulting, the software development company will study your project and business strategy. The consultants will also help determine the right goals for your startup and develop a strategy to achieve them. In the process they will find out if the company has the necessary capabilities and resources.
You will get the recommendations on issues related to the overall IT strategy, for example, determine what should be placed locally and what is in the cloud. In addition, IT experts will help you choose the type of technology and functionality needed in the context of your business.
Tactical startup consulting as it is
Everything is pretty clear with the strategy, if it answers the question “What?”, then tactics says “How?”. Tactical consulting allows founders of startup to answer the question: “HOW are we going to achieve the goal?”. At this stage of startup consulting, the developer company analyzes in more detail timelines for achieving goals, a set of necessary tools and resources, and also determines the specific actions to be taken.
In other words, tactical consulting is planning, during which step by step a detailed plan for developing your product is created. The IT company transfers to the startup all its experience and expertise, answers customer questions in planning and makes the project truly effective.
So let's take a closer look at the three components of tactical consulting:
- architectural planning
- operational assessment
- implementation planning.
I. Architectural planning
Purpose: To create a logical architecture for both the system and the infrastructure, which will satisfy the requirements of a business project.
More about the process: In this phase of tech startup consulting:
- the so-called logical foundation of future product development is being built,
- the construction of components of the development process is being analyzed,
- general points and technologies are discussed.
At this point, IT consultants make a decision in favor of certain technology and programming languages that are best suited for application development. It turns out that during architectural planning you define and design a technological solution that matches the strategy of your business. Then, during startup consulting, you choose the right platforms, tools, and the best methodologies for working with your IT project.
II. Operational assessment
Purpose: To evaluate the performance and potential of the client’s IT environment.
More about the process: If at the previous stage the development company defines technologies in general, then during the operational assessment it makes decisions about the details. It is here that tech startup consultants set specific tasks aimed at creating an architecture, select the best frameworks for the development process, and also determine the performers and write estimates for each assignment.
Advantages: The operational assessment in tech startup consulting provides planning and evaluation of your business project, workflow, resources, systems, equipment, information, as well as the data necessary for the development of short-term and long-term improvement plans.
III. Implementation planning
Purpose: To plan the deployment and testing of implemented business startup solutions.
More about the process: Based on the architecture the software company plans a consistent implementation of IT development. At this stage of tech startup consulting you plan the creation and launching of MVP (minimum viable product). The consultants will help you calculate everything in a way that you do not spend too much time developing a prototype. Plus it will save you a lot of money. Recall that the purpose of creating the first MVP - check functionality, demand and performance of startup idea. Having received real reviews and constructive criticism of the product prototype from users, the IT company will refine your product before entering the market.
Learn more about analytic tools for startups, as well as features of creating MVP in the article “10½ True Tips for Startup Success in 2019”
What do you get using IT consulting for tech startup?
.1 You remain relevant in the market
One of the main advantages of tech startup consulting is the use of effective methods and models for analyzing the market, the needs and desires of the target audience, as well as a detailed inquiry of your startup business project. Which allows you to determine the feasibility of launching and testing a software service or product.
One of the methods we use during startup consulting is Canvas by Peter Thomson - an effective method to test your business ideas. Using questions on canvas such as desires, fears, and needs, you will be able to explore your target audience, in addition to an analysis of the benefits, features, and experience of your startup product will show whether consumers need it.
All this contributes to the fact that your tech startup product or service will be relevant in the market. In addition, IT consulting will advise the most efficient model of data placement in your particular case - cloud or server.
.2 You get advice, assessment, and solutions from IT professionals
Custom software development companies have significant experience in developing non-standard software and use analytical tools that allow you to predict and build a plan of action on how your company can achieve its short and long term goals. So, with IT startup consulting, you get access to knowledge and experience to use more advanced technological solutions and services.
.3 You avoid unnecessary costs and reduce risks
Planning allows you to create an architecture in such a way as to get only the necessary functionality in the application, without any extra functions that you would have to pay for. Risks are leveled by the fact that the customer definitely gets exactly what they want, because the software will be developed exclusively according to their goals and needs. IT consulting will not only be able to figure out how to embody the customer’s desire, but also to give valuable advice on how to improve their desires.
During tech startup consulting, software development analysts will examine your project, analyze it, and give you valuable professional advice that will help you not to waste money. One of them, for example, may be that it is better to “build up” capacity as the storage requirements and end-user requirements increase, rather than spending precious startup funds to purchase capacity from the very beginning.
.4 You create the basis for growth
A flexible IT environment allows you to quickly expand your IT infrastructure and take advantage of business opportunities. Well thought out IT infrastructure and careful planning will enable you to develop your service or product so that it can be scaled when and how it is needed. Also, an IT consulting company will provide your startup business with access to planned, weighted approaches to ensure ongoing system maintenance, security backup and disaster recovery, which minimizes downtime.
.5 You do not spend time on difficult tasks
In consequence of startup consulting as part of a custom software solution, you do not spend time upgrading and maintaining your IT infrastructure. Why must you spend resources on something that can safely be handled by professionals? Let them take care of network connectivity, security, backup, disaster recovery, database administration, program management, and much more. You and your staff during this time are able to focus on core business functions.
.6 You reduce overall IT costs
IT startup consulting allows you to effectively manage business cycles by setting up your IT infrastructure and operational processes. Moreover, IT outsourcing will reduce your capital costs and operating budgets. A software development company will help your startup develop a budget and a plan that meets your specific needs, which reduces both the operating and general costs.
.7 You increase the value of your business
When you use the advice of an IT company, and also receive an expert consulting in product improvement, the value of a startup business project for future investors increases significantly. That works especially if you focus core resources on products, innovation and marketing, and not on IT planning and infrastructure.
.8 You get tech support service
As a result, a tech startup IT consulting company will assist you with planning and creating a quality MVP (minimally viable product) that realizes your business concept as much as possible. Using the first prototype you can test the functionality, demand and performance of the startup idea. The work of an experienced IT team does not end with the strategic and tactical planning, development and proper implementation of your IT systems and networks. It provides your tech startup with further services in the event of any inconvenience in the future, eliminates errors and inaccuracies.
Of course, IT consulting is not a magic wand nor even Aladdin's lamp. It is better! It is impossible to lose it, and its importance can't be overestimated. After all, using the service of tech startup consulting as part of a custom software solution, you prevent possible risks in the development of your business project, and eradicate small problems that strive to become dangerous. Moreover, you carefully plan product development, think over processes, take into account all the subtleties, and in the end, significantly save your money and time. And time is money. Oh yes, we already heard it somewhere.
After all, the strategic and tactical planning of your technical startup will not only save you from an unnecessary headache, but also make your business effective, competitive and strong. High-quality IT consulting is the very secret of a successful startup! ;)
Let's talk about your project!