The pandemic could have easily stunted the UK’s startup growth, instead, the shift to remote work and increased reliance on technology created a plethora of new opportunities for would-be entrepreneurs. In in the year to March 2022 over 750,000 new startups were founded in the UK, the second-highest number of startups registered in one year.
However, with soaring inflation and a potential recession looming the past year has seen a jump in business insolvencies – up 30 per cent to a 13 year high, according to The Insolvency Service.
The tech investment market is feeling the effects of the current economic slowdown with technology investment in the UK falling 22 per cent last year, one of the sharpest drops in Europe, due to challenging economic conditions.
For tech startups these economic conditions mean that it has never been more important to build and deliver tech products as efficiently as possible.
When finances are tight, effective resource management is crucial for startups, and adopting a cost-conscious approach is important as it helps the entrepreneur take the business to then next level without incurring debt or diluting ownership.
In the current economy, maintaining a frugal mindset is not only a wise practice but necessary to ensure long-term success for a startup. Figures show that 38 per cent of startups failed because they ran out of cash or failed to raise new capital.
Certainly, there are financial efficiencies to consider in each stage. In the development phase, for instance, entrepreneurs should look closely at what their minimum viable product (MVP) is going to look like.
It is difficult to define an MVP, given they can vary so dramatically in form, function, purpose, and audience. The concept of a minimum viable product (MVP) is a key step in the development of a tech startup. It's the initial form of a product that can be released to users to gather and analyse data and determine future development.
With no easy cash in circulation, the aim should be to create an MVP on time and on budget. Bring something to market that showcases the core purpose of the tech products, and then worry about adding further functionality further down the line, ideally when the business is revenue-generating or seed investment can be sourced.
At the heart of the ‘lean’ startup methodology is the principle of getting a product into the hands of customers as quickly as possible, eliminating wasted resources, and maximising efficiency. Then, it can be tested on real use cases, and the value of the product assessed. Internal feedback loops can be more quickly side-lined, and resources can be concentrated on building and learning – allowing startups to authenticate the worth of their concept and present a robust case for viability to potential investors.
The increasing desire for smooth digital experiences is proving to be a challenge for startups and growing companies, which are often limited by their budget and lack of user experience (UX) expertise. A shortage of tech talent has further exacerbated the demand for app and web development, outpacing the supply of workers with the necessary skills.
As such, low-code and No-code development have become a popular solution for these challenges. These platforms offer a collection of pre-made core components and building block style functionalities that can be easily personalised by users with limited technical skills.
No-Code frameworks are programming platforms that allow non-technical users to create applications using a visual development interface without writing a single line of code’. The drag-and-drop capabilities of No-Code platforms makes them easy to use for non-developers enabling them to visually create a working mobile and web app.
Utilising cost-effective strategies such as MVPs and No-code development can help startups with developing their product more efficiently without cutting corners.
Ready to launch
Developing a new tech product requires a well-planned strategy during the early stages in order to ensure a successful scaling process.
Taking a methodical and intentional approach, rather than rushing or making impulsive decisions, can prevent potential expensive obstacles and guarantee a smooth launch. Startups often fail because they have a flawed business model.
It's important to understand that creating a new product is not just about launching and leaving it be. After the discovery phase where the business vision and end-user needs are established, the product needs a clear roadmap for ongoing improvements post-launch.
Agile development helps keep this a cost-effective approach and avoids focussing on unnecessary features, while ensuring the product meets the needs of its users. As the product is used by more and more people, updates can be made based on user feedback, allowing the business to prioritize the most important features and functionality needed to scale the product.
Reducing waste is crucial. Startups that focus on getting the essential aspects right will succeed in scaling despite rising inflation and increased overhead costs but with the proper strategy, I have no doubt that we will continue to see aspiring tech entrepreneurs introduce innovative products and services.
