How to start a tech startup?

There is no easy path from an idea to a prototype. Myth and reality: dependence on a service provider, tech debt, and an almighty CTO.

What problems does a nascent tech startup face on the path from an idea to a prototype? How to find a “proper” service provider? What is tech debt, and is it possible to avoid it? Where to find a highly-qualified like-minded CTO who will be able to support the realization of your idea? Below is our take on these questions.

Part 1. Everybody in IT has heard about it: a standard set of actions at the initial stages of a tech startup.

Nowadays, step-by-step instructions for a nascent tech startup is a very popular Web query. Presented in many variations, often overlapping each other, they do increase traffic, bringing value to website owners. Even though this article pursues another goal, we will also mention this list here to take a closer look at the steps, highlight some hidden issues, and find appropriate solutions where possible.
To begin with, let’s discuss a relatively standard list of steps any tech startup starts with.

1. Provide a detailed description of your idea and the value and benefits you expect it to bring. Draw diagrams and charts.Make each aspect of your project clear for anybody.
2. Hire two essential specialists: a business expert (CEO) and a technical expert (CTO) to implement your startup. Since you are reading this article, you will probably be a business expert, but you still have to find a CTO.
3. One of your main tasks as CEO is to build a project finance model, not to speak of a business plan.
   To make your startup a success, you should first investigate how big the market you are going to operate in is and what you should do to get profit or, for example, increase the number of users.
4. CTO’s task will be different. He will have to build a team and an MVP (Minimum Viable Product) to receive user feedback and to find out whether the idea is as good as it seems. The question that bothers any CEO and CTO of a nascent startup the most is if anything worthy will come out of their enterprise. And only after both of them get enough evidence that their time and effort won’t be put in vain…
5. …They should try to persuade investors that their project is worth investing in. Unfortunately, according to statistics, the great majority of tech startups stop their existence somewhere within these four steps.

Part 2. Searching for a technical expert for a tech startup. Guru, geek, or student?

The great majority of tech startups stop their existence somewhere within these four steps.
Searching for a CTO will be your first big challenge. Usually, people start browsing LinkedIn first thing, trying to recollect all the “geeks” they know. But the question is whether you need a CTO at all, as strange as it may sound. Who said that it’s important? Moreover, a lot of companies believe that hiring a couple of students who will gladly do everything needed for quite a reasonable fee does make sense.
Following this policy, they recommend others to do the same.

“Give up on finding experts. You will not get experts. Forget them. Find some talented high school kids or
college students who are willing to put in the work.” (A quote from Quora expert)

and

“Ask friends for help. We were able to barter some custom-made dog beds to a web developer friend in exchange for her spending 5 hours redoing our website.” (Also a quote from Quora).

We can’t but agree that the value of expert knowledge has dropped dramatically in the 21st century. Anyway, underestimating expertise and experience can lead to undesirable consequences. It will never occur to anybody to entrust a medical student to remove their appendix no matter how many lectures on anatomy they have already attended. So, why do you think that a student who spent a couple of hours studying technology will be able to help you develop your startup? If you are just afraid of failing and are trying to minimize possible losses, then you’d better refuse from your venture at all: where there is no risk,
there are no losses. On the other hand, as we have already mentioned, any tech startup can be divided into two big parts: building a product and building a business. Building a good product is no less important since the better your product is, the easier it is to sell.

“The best way to recruit, evangelize, market and sell is to have a great product. Because selling, marketing, and evangelizing a great product is easy.
Selling, marketing, and evangelizing crapis hard.”,- Guy Kawasaki.

And if there is anybody worth listening to, it’s Guy.

Part 3. Who can product building be entrusted to?

A tech startup can be divided into two parts: building a product and building a business. Building a good product is as important as building a business. That’s why you do need a professional who will help you create that very great product. The most obvious tip, in this case, is to find a CTO co-founder. This is, of course, easier said than done. If your friend is a genius and is eager to join you, your problem is solved. (As it was with Steve Jobs or Bill Gates.) But if not? How to tell between a future genius and an ordinary geek? Trying a lot of different candidates isn’t the way out at all as it is time-consuming and costly. So what should we do? Let’s decompose this problem into components:

1. What qualities should a CTO have? Expertise and tech erudition, ability to set tasks for developers, ability to code at least feebly, ability to find nonstandard solutions, especially when resources are limited.
2. Where should we look for such a professional? We can use resources like CoFoundersLab or, for
   example, post an advertisement on LinkedIn. But we should keep in mind that highly-qualified professionals cost a lot.
3. How to understand that a potential candidate possesses the needed qualities? To find an answer to this question isn’t an easy thing to do. To define which of the candidates meets your expectations is hard, especially if you lack appropriate knowledge and experience for such an assessment.
4. If you are lucky enough to find a worthy professional, how to make them interested? According to Global Entrepreneurship Monitor, more than 1.35 million out of 100 million annually launched startups, are tech startups. No wonder that the competition for a highly-qualified and experienced CTO is
   really fierce! That’s why outsourcing seems to be a logical alternative. This approach offers the following benefits:

• Relatively simple vendor search.
• Possibility of validation (at least on references and portfolio).
• Price. I would recommend starting with an MVP only and pay not for the team but the developed product. Such an approach allows minimizing risks.
• You kill two birds with one stone, finding a CTO and a team in one place. Besides, you have your MVP
  built for a reasonable price and are ready to take the following step – contact investors.
  Sounds awesome? At first glance, yes. But there is an alternative opinion and to be honest, it is also quite reasonable.

Part 4. Is tech debt such a big problem?

“Never outsource your product – you won’t be able to control its quality and the correctness of the implementation.”

That’s what some people claim. Let’s take a closer look at this situation and find out if it is really such a big problem.

**”Absolutely pay upfront and do not outsource. Outsourcing often puts you in “technical debt,” as development quality varies wildly and is hard to gauge for non-technical people. Much of my career has been cleaning up messes like this.”

At the first stage of your startup, your main task is to have an MVP built, and you have to do it fast. As they say, “Fail fast and move on”. But, if seriously, you need a product that will stir up interest among users (in this case, it’s more about early adopters) and attract potential investors. The problem is that in most cases, at this stage of startup development, its budget is limited. Thus, you find yourself in a textbook situation of tech debt.

Common causes of technical debt include:
~…~_
Business pressures, where the business considers getting something released sooner before the necessary changes are complete, builds up technical debt comprising those uncompleted changes.
(Chris Sterling (10 December 2010). Managing Software Debt: Building for Inevitable Change (Adobe Reader). Addison-Wesley Professional. p. 17. ISBN 978-0-321-70055-1)
…

What is more, tech debt occurs regardless of whether you’ve hired a CTO or an outsourcing company or do everything by yourself. It occurs because there is no way to avoid it under such circumstances!
So, there is nothing out of the ordinary in tech debt. The problem is that a lot of people forget that debts have to be paid off. You shouldn’t be surprised that as soon as your MVP allows you to attract
investment and hire a good CTO (by that time, you will already have convincing arguments to persuade him to join your startup) you will have to refactor, redesign, and implement other changes. There is nothing wrong with that. On the contrary, by then, you will have already accumulated so much user feedback, come up with so many new ideas, and face so many technological advances that you WILL want to redo everything. It happens in all spheres of our life, starting from house renovation and ending with writing a book. There is no need to regret the things you’ve done, and if you haven’t spent too much money on your venture, there is nothing to regret at all.

In conclusion, I can advise you to use the opportunities that are available to you. If you can cope with the role of the technical leader yourself – great, this is the best option. If you have a friend like Steve Wozniak, it’s a good option too. If not, don’t be discouraged, choose the right outsourcing company and build an
MVP.

Good luck! And maybe we will meet soon!