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Creating a tech startup can be a daunting and thrilling experience and Mark Germishuys, CEO fo NGA has provided some tips of advice for new tech startups.
These practical tips of advice are gathered from first-hand experience
Established in 1999, NGA is South Africa’s first data consolidation and online real-time reporting method. Beginning as a tech startup, NGA is now considered on of South Africa’s leading data science experts.
Globally recognised for his expertise in data science, Germishuys can offer some practical insight into building a tech startup.
Seven tips for tech startups
1. Know your risk and your requirements to set up a company and the regulatory requirements for running such a company. Taking short cuts in the start takes a lot of time to sort out later especially when it comes to contracting the supplier. The onboarding process is much stricter on compliance than it was many years ago.
2. Protect your IP and ideas with patents or trademarks as soon as possible before making them public knowledge. We patented online reporting in 1999, which was a first in the world as well as the words Online Real-Time, which helped us with our business today, 21 years later. Clients also feel that they have the confidence knowing that they have leading-edge suppliers who invest in innovation and R&D.
3. Have a business network or join a mentor program as soon as possible. We relied too heavily on our contacts, which resulted in us losing a lot of opportunities in the market where we had no knowledge and contacts at first.
4. Don’t sign exclusivity contracts unless they have a big business network and you are one of the key products they want to market.
We signed any business partnership or alliance opportunity that came our way, which we later realized was to keep us out of the market as they realised we were going to become a threat to them in the future. The result was that we lost a lot of opportunities as we could not sell our products to other clients due to these constraints. We learned some valuable lessons from this.
5. Do not hire permanent staff until you have signed contracts with clients in place. Rather hire staff on a contract basis upfront. We hired permanent staff before having any clients, and then when we did get our first client, our offering had changed and the skills those staff had weren’t needed. We ended up losing a lot of money and had more stress trying to keep those staff busy than focusing on the business and the marketing of it.
6. Use open space offices or coffee shops at the start until you have 3 to 4 permanent clients. We learned this valuable lesson when we opened up offices with reception meeting rooms and four admin offices before getting any clients in the first year.
We always seemed to meet potential clients at their offices. Therefore it would be better to invest in your appearance than in having an office at first.
7. Budget for a least one year without any income coming in. We only got our first client after 1.5 years so we had to sell properties and I moved in with my parents to save money.
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