It’s a well-known fact that 97 percent of tech startups and new businesses fail within their first year. Why does this happen? What causes so many companies to crash and burn so quickly? Well, an insanely high level of competition certainly plays it’s part. In niche markets, competitors aren’t too much of an issue because there aren’t that many companies selling the same product. Tech is a little different. There will be always be someone offering a product or service vaguely similar to yours that customers can choose instead. But that’s just one of the possibilities. The best way to ensure that your business doesn’t crash and burn is to make sure it’s formidable from the start.

Avoid Obvious Outsourcing

If you’re going to outsource part or most of your tech startup, and many business owners do, make sure it’s a white label company. This means that the service they provide should be completely invisible to your customers and clients. Clients should have no knowledge what so ever that you are in fact using an outsourcing service. If you can guarantee that you can avoid the possibility of them switching to a different company because they know you’re not delivering the full service. Customers tend to accept outsourcing, as long as they don’t see the evidence it’s happening. If customers can tell you are outsourcing it suggests there is an issue with quality control.

Cut Costs Down

When you start your new tech company, you want to keep the level of staff down as much as possible. Research has shown that out of all the costs in the tech industry, and there are plenty to consider, staff costs are one of the most expensive. To avoid the issues here, you could consider hiring freelancers. Using freelance workers essentially means that they are not under a contract. As such, they do not get job benefits as a given. They can also be hired on far cheaper salaries making things far easier for business owners. Particularly, tech startups where it could be useful to constantly change and shakeup the workforce to deliver better results.

Tech Startup business

Pass On Some Jobs To Customers

If you are working in the tech industry, you could be providing tech and software to clients. You might want to consider providing self service analytics options. By doing this, you will allow customers and clients to run their own analytics, and this means that you can cut the cost and time spent on IT support right down. You can also make sure that you are delivering the best product possible to your customers.


Lastly, one major mistake a lot of new tech startups make is to focus on the sale of one product in particular. Instead, businesses should be focusing on selling a variety of customers from day one. Doing this, if one product isn’t as successful on the market as you might have hoped, you can still rely on other products being sold by your company to maintain a profit.

Tech Startup business girl

Take this advice, and you should have no issue avoiding the failures that cripple most tech startups.

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