Startups, especially in the tech and IT industries, have been popping up all over the world but on the other side, have also been failing and fading incredibly quickly. According to Forbes over 90% of all startups fail, a staggering and intimidating statistic for anyone that wants to start a new business or company. The biggest reason for this comes from a survey performed by Fortune that found that 42% of startup founders identified a lack of need for their product in the market as the failure of the company. Of course, this will cause issues for any company, but it is especially troublesome for a startup, as their first product can end up being their last due to this issue. Another issue that many startups have found themselves struggling with is structure. Dijiwan, a tech startup, identified this as its failure, realizing that having employees work in fields they are not specialized in was the failure of their business.
So, maybe you still think you can develop a strong startup as you believe you have an excellent idea for the tech industry or otherwise. There are multiple issues and problems to tackle, but the big, burning question is how to generate revenue. Another article from Forbes that is specifically focused on the IT and SaaS (Software as a service) industries tackles this question head on. Software has become easier and easier to develop and access thanks to advances in technology and the accessibility of SaaS but starting and running a company is still a difficult task. It is a difficult market exactly because of this, as customers now have an array of choices at their disposal at affordable prices, making entry into the industry and maintaining status difficult.
Even if it is difficult to start and run a business in this landscape though, that doesn’t mean its impossible, as the aforementioned competition can lead to better products and general innovation. The first thing to do when starting an IT or SaaS company is to craft opportunities for alternate revenue as it can be slow at first even with an amazing product. CEO of Yocale.com, ArashAsli, states that additional revenue sources were the boost that allowed his company to get past the dangerous initial phase of starting the company and move into working on their main product. He also stated that SEO tools and marketing services are excellent industries to offer secondary services in.
Referrals are another way to boost revenue and generate a customer base. A 2016 Nielsen study stated that 82% of consumers want recommendations from family and friends when considering different services and products. A referral can be handled in multiple ways; One way is offering a discount for referrals as an enticement. Another way is offering a commission for each product sold through a referral, giving benefit to both the customer and the company offering it. Overall though, some strategies may work for some companies but not others, it is important to find which system works best for your company and your customers.