Building a Software Startup: Key Aspects
SOFTWARE STARTUP MARKET HIGHLIGHTS
The whole startup market is expected to expand to $3 trillion by 2023, with software and software-enabled businesses accounting for a large share of the market.
Deep tech, such as AI, blockchain, robots, tech, and cleantech, now account for 45 percent of the fastest-growing software firms in the world.
Fintech, cybersecurity, tech, gaming, Ed-tech, and digital media are among the traditional tech sectors that are not far behind.
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THE EFFECTS OF THE COVID-19 CRISIS
Since the onset of the crisis, over 72% of companies have seen their revenue shrink, with the average business seeing a drop of 10% to 30%.
Surprisingly, just approximately 12% of firms had significant revenue growth.
The good news is that governments recognize the importance of startup software companies in reviving the economy and have proposed support packages.
Naturally, startup specialties that can assist during the crisis will receive the most assistance.
Healthcare (assisting with testing, sanitation, and contact tracing), social services (offering non-health-related care and food delivery for the immunocompromized and old), and e-education are a few examples.
How to Launch a Software Startup: Important Stages
1.
Conduct market research in order to uncover business prospects and productize ideas.
2.
Developing a value proposition and a market-entry strategy
3.
MVP project planning, including feature set overview, technology selection, and architecture design.
4.
MVP project planning, including feature set overview, technology selection, and architecture design.
5.
(If applicable) Obtaining a long-term competitive advantage as evidenced by a patent or patents.
6.
Development and deployment of the MVP
7.
Customer MVP testing, feedback analysis, product/market fit measurement, and revenue model development.
8.
Fundraising. (optional)
9.
Continuous iteration to increase product-market fit, as well as active product and brand marketing.
Popular Startup Business Models
Multi-sided marketplace (or XaaS)
There should be at least two types of users: service providers and service consumers
(for example, Uber - drivers and passengers).
Commission-based and subscription-based revenue models are two kinds of revenue models.
eBay, Uber, Airbnb, Spotify, and LinkedIn are just a few examples.
Focus on:
(in the case of ecommerce marketplaces) The best ecommerce platform for launching a multi-vendor marketplace (e.g., Magento).
Search and recommendation engine with a lot of power.
Marketing automation is a term that refers to the process of
Confidentiality of commercial and personal data is assured.
Features that allow prices to be adjusted automatically.
Software-as-a-Service (SaaS)
Software is available as a subscription service (monthly, annual, etc.) or as a pay-per-use service.
Customer loyalty is given a lot of attention.
Salesforce.com, Dropbox, and Netflix are just a few examples.
Focus on:
Payments on a recurring basis (if subscription-based).
Pricing is based on a freemium model (basic functionality is free, but more extensive plans cost money):
A well-designed conversion funnel that converts free users into paying customers.
A solid infrastructure capable of supporting a large number of free users.
Licensing in bulk (for enterprises).
User-generated content
Users are given a free or low-cost app, which can then be monetized by adverts or the sale of data segments.
Instagram, TikTok, and Snapchat are among examples.
Focus on:
High-volume traffic
Cookie-based targeting and advertising.
Data Collection
Selling research services or aggregated, de-identified data to generate profit.
Google and PatientsLikeMe are two examples.
Focus on:
Traffic volume is high.
Common Functionality of a Startup Prod
Security measures for data.
Scalability of software and infrastructure.
Common Functionality of a Startup Product
The common functionality of modern startup software solutions is listed below. The specific features will be determined by the product’s purpose and intended audience.
Identity and access management
Login with a single account.
Authentication with many factors.
Permissions granted to users.
Management of the session
Detecting the presence of an unauthorized session.
Anti-multi-session protection.
Countermeasures against session hijacking.
Data Protection:
Potential security threats are assessed automatically.
Investigation of vulnerability roots using machine learning.
DDoS protection is built-in.
Compliance with PCI DSS, GDPR, HIPAA, and GLBA, for example.
Payment:
Payment gateways that are integrated (Braintree, PayPal, Adyen).
Card, bank transfer, Apple Pay, Google Pay, and other common payment options can be used to make one-time or regular purchases.
Payment retries that are intelligent, as well as automatic payment failure emails.
Marketing:
Social media integration is possible.
Management of pricing and promotions.
Loyalty management is the management of a person's loyalty.
Email marketing is a type of marketing that involves sending emails to
Surveys of user experience
Analytics and Reporting:
Monitoring of SEO indicators has been improved (for web solutions).
Heatmaps for mouse movements and clicks on homepage items, session recording, A/B testing, personalised conversion routes, and web form analytics are all examples of conversion optimization.
Tracking of visitor profiles.
Pattern tracking and user interaction.
User input can be gathered through live chat, brief surveys, and social media.
Controlled experimentation and feature management
A/B testing is used to find the best version of a new feature or to track your progress.
During runtime, feature toggles (feature flags) can be used to hide, disable, and enable certain capabilities without publishing additional code.
Use feature variables to quickly customise components or parameters without deploying code, and experiment to find the best values for each.
Strong Competitive Differentiators
Monetizing on privacy
Customer intimacy has become an industry as a result of the rise of corporations that make money by gathering consumer data — more and more individuals are looking for software that respects their privacy (e.g., DuckDuckGo, a privacy-focused search engine).
Advanced techs
Because market leaders rarely pioneer radical changes, a startup’s competitive edge can come from the launch of an innovative product or service.
- Personalization, behaviour and business process prediction, simulating the mind of a human being and executing human-like activities, advanced data security, picture analysis, and more are all possible with AI and machine learning.
- Smart, connected devices, smart cities, industrial IoT, and IoMT will all benefit from IoT technology.
- To ensure fair transactions, blockchain uses data privacy and openness.
Exceptional customer support (especially important for B2B startups)
- Anticipating client problems or inquiries.
- Providing solutions and answers to prospective concerns in a proactive manner.
- Assuring customers that they get the most out of your product or service.
Planning to Deliver New Software Product or Online Service?
Failure is attributed to not having the correct team in place by 23% of startups.
Hiring the proper people takes a lot of time, money, and management effort.
ScienceSoft’s business advisors and developers are just a click away to help you with:
Designing a market entry plan.
The process of turning an idea into a product.
Product development strategy and technology selection
The new software product was developed and deployed quickly.
Sample Investments, Skills, and Timelines
SaaS MVP Development
Duration:
3 months
Skills:
- BA/Consultant
- UI designer
- Project manager + 3 developers + 1 tester
- DevOps engineers
SaaS Application Development from Scratch
Duration:
6 months
Skills:
- BA/Consultant
- UI designer
- Project manager + 3 developers + 1 tester
- DevOps engineers
Ways to Optimize Startup Product Development
Ready-to-use cloud services (e.g., AWS and Azure's AI and IoT services) to streamline development.
APIs that are exposed to the public (for examples, open APIs of social media tools).
Using systems (for example, Magento for an online marketplace launch) and adapting them appropriately.
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