Starting your tech company: Identifying your product
20 Oct 2017
7 minute read
Being able to code is the one of the most empowering skills you can have today. Knowing how to code enables you to pursue almost any career path that you can think of. One of the less realised, but super rewarding, careers you can pursue with coding is starting your own company. Since you have the skills to create whatever technology you feel is worth creating, it makes it easier to come up with a range of innovative products/services.
One of the first things you need to think about when starting a company is finding out what you should make. This decision will dictate everything else in the business. First and foremost, you need to ask yourself some questions about your future product. Here are a few to start with:
Step 1: What do you want to make?
The best tech companies out there were started by people who were passionate about what they were making. They felt an overwhelming need to introduce their tech to the world, and therefore made it their goal to see their idea come to fruition. As an example, Netflix started because Reed Hastings became frustrated with having to pay a $40 late fee to Blockbuster, so he came up with the idea of creating a service where there are no late fees. Since Reed was making something he personally desired, it became easier for him to predict what users would want to gain from using Netflix.
Your second option when deciding what business to launch is to come up with a solution for something you think might be a problem other people are facing. However, this route is risky as you might misdiagnose a problem.
Step 2: Why will people buy your product?
The second question you need to think of is ‘what is it that you are offering’. What do you bring to the table that will draw people to your product? This needs to be something that people will experience first-hand, but it's not merely UX/UI either. Making the app user-friendly only takes you so far. You need to think of a combination of features that will make it a fantastic experience to use your product. Think back on some of the best apps you have used. You will encounter that it's not only one feature that made it amazing, but a whole ecosystem of elements that contributes to a great experience. However, the best tech companies think of impacting customers beyond the digital world. For instance, Netflix, with its massive online streaming library, made it so easy for people to access entertainment with no hassles that going back to DVD became an afterthought.
Step 3: Do people want what you are making?
While you might think the answer to this question is relatively simple, 42% of tech startups fail because there is no market need for their product. Generally, there are two kinds of products you can create: ‘makeable’ and ‘marketable’. A ‘makeable’ product is fun and cool to make, but nobody needs it. A ‘marketable’ product is something that you can sell. As an entrepreneur, you need to find a balance between these two types of products. The best way to gauge whether people want what you are making is to talk to them and get their feedback. The most effective way to do this is by creating many prototypes, going out into the world, and asking people to be honest about their experience. As you keep iterating based on customer feedback, you will end up with a solution people are willing to pay for.
Step 4: How will your product make money?
Unless you are super altruistic, one of your motivations for wanting to start a company is to make money. Every business decision you make, especially what product to offer, boils down to whether it can generate money. But, how it will earn money? This is a crucial aspect to think about because once you release your product/service into the world, it will be challenging to change how it is was priced. There are various ways of earning revenue including: one-off purchases, subscriptions, in-app purchases, licensing, and so on. Think about which revenue model will be best suited for the type of product/service you are trying to offer. If the only way to earn money is through one-off purchases, and you need to sell 200,000 of them to break even, then it might not be a good idea to go forward with it. A good idea needs to make monetary sense.
While these questions may seem obvious to you, do not be fooled as their simplicity is deceiving. There is much thought that needs to be put on what product you are going to make. The options at the start are many, and its might seem like all of them are going to be equally successful. However, going through these questions will help you narrow down the options to the ideas that are truly worth chasing after.
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