How to turn an IT startup into a profitable business?

Do you know that out of ten IT startups only one survives? How to become one who is better, faster, stronger? How not to get bogged down in a bureaucratic routine, not to lose a financial reserve, to create a product that will be in demand in the market and become a leader in its business niche?



Many of us have asked similar questions in the process of launching our business. Some are frightened by the prospect of uncertainty, others are inspired. But regardless of which group you belong to, you need to take into account a number of important points in order to move from a number of IT start-ups to a fully functioning and profitable business.

• Suggest a solution

The most important thing for a startup is proper market segmentation. You must clearly understand what problems your product helps to solve and for which target audience it is designed. Nobody needs 1001 Facebook, all the more so that number 1 on this list copes with its task with a bang. A complex, not user-friendly project will probably also not find its admirers in the proper amount. To assess the prospects of your product, it is necessary to identify the problem of the potential target audience and try to solve it as best as possible. Remember how Android appeared, because by that time there were already both Symbian and iOS. But Android has found its niche, becoming a more convenient alternative to Symbian and a direct competitor to iOS, the closed structure of which was intended only for Apple devices.

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And how not to recall fierce competition among the three giants of search Google, Yahoo and MSN / Bing? Probably, nobody already remembers such search systems of the early 2000s as AllTheWeb and Altavista? But once Google was a “garage” startup, but a special approach to creating a search service allowed us to occupy more than 70% of the world market in its business niche. Google solved the problem of finding information on billions of pages better and faster than others, offering more relevant results, and quite succeeded in this.

• Do not miss the little things

It would seem that the subject of the product is known, the target audience is defined and studied, the developers are professionals with a Big Letter, the leader is a fan of his work and an ideological inspirer. Destined to success? No matter how wrong! It is not enough to collect the best players - we must also teach them to play in the same team. In the case of a startup, job responsibilities are a little blurred and everyone can and should do things that are not quite typical for his usual specialization. Developers need to understand the marketing component of the product, and marketers to understand the main aspects of development. This is not about how to force the sales person to program. Remember, “for everything that we do, we will answer together!”. I am just about that. Success or failure depends on each link of the startup team.

• Do not be afraid to change

Probably, before the launch of the product into development, more than one month of analysis and calculations passed. A detailed business plan for the development of the project is not one decade long. A plan is good and valuable, but life makes its own adjustments. I have not seen a single business plan that is 100% consistent with reality. And that's fine. The plan operates with key parameters, but it does not provide for operational changes and data obtained in the real market, empirically.

• Growth rate is important

Rapid growth is an indicator of choosing the right idea and business strategy. Besides the fact that explosive growth directly affects the company's revenues, it also encourages investors to invest in your business. What will show potential better than the growth of the project? In addition, a startup always has the risk of not having time to reach the break-even level before the initial investment is spent. If growth is not sufficient, the business may simply choke, and not reaching the planned indicators of profitability.

• Difficulties exist in order to overcome them

Did you know that at the end of the 90s, Apple was on the verge of bankruptcy, and in 2014 its profit amounted to more than $ 39.5 billion (1st place in terms of profit in accordance with the Fortune 500 rating )! Only a couple of decades ago, few people believed that the revolutionary ideas of Steve Jobs could take the company out of the protracted crisis. But the main key to the success of the founder of Apple - the belief in yourself: your ideas, strengths and capabilities. When a new product line is brought to the market, no matter how remarkable the creator intends, it is far from a fact that the target audience will be enthusiastically greeted by it. Here it is important not to give in to the difficulties, but to prove that your product is more convenient, more reliable, safer and simply better than its analogues.



If your business is developing steadily and even began to make a profit, congratulations, you are doing everything right and you have avoided the typical mistakes of startups. Probably, your product effectively solves customers' problems, your team is well-coordinated, you are flexible enough to adapt to changing market realities, and you see difficulties on the way as opportunities that provide your business with an adequate level of growth. This is really a great success: do not share your recipe?