How to come up with a Tech project and make money: we tell you how to plan a startup cycle

Technology and man

Technologies are changing our lives at all levels: from growing agricultural

cultures to modes of transportation.Who would have thought 10 years ago that we would order groceries for home delivery in 15 minutes, ride electric scooters everywhere and open bank accounts online in a couple of minutes. Technology plays a paramount role in these changes. However, the open question remains: is technology driving change, or are we changing the way we approach everyday issues through technology? I vote for the second one.

This applies to any tech-sphere.The requirements for business solutions for everyday life are changing: new types of customers, more complex issues and needs, tighter time frames. To work optimally and provide affordable services to people, you need to increase the intelligence of processes.

For example:

1. Use technology collaboration tools to improve communication between colleagues and with clients.

2. Automate the creation of documents to save resources. 

3. Use speech software to avoid manually typing texts.

4. Transparently share information with clients through IT systems. 

5. Store documents in the cloud to work with them from anywhere.

All these technologies make the work of any IT service much faster. They also help to respond more effectively to the needs of their clients. 

It turns out that first a person goes through thisway manually, there is a need for digitalization, and then an understanding of what technology is needed. On the contrary, it doesn't work. It's difficult to create a technology and try to find application for it in any industry. Business may simply not be ready for such changes. 

Let’s say a novice entrepreneur comes tohead great idea. He is a decisive and active person, he quickly assembles it, packages the MVP and then waits for sales. But there are no sales. The entrepreneur does not give up: he redesigns, changes the price, adds new features, assembles a new team. Waiting for sales. But they are gone again. 

This is all a typical, albeit simplified, cycle of life.a product that turned out to be not needed by the market. This product can be of high quality or low quality, expensive or cheap - all this is not so important. It simply turned out to be of no use to those to whom they were trying to sell it. 

Technology must be economicallyexpedient. Let's say you're building a food delivery startup with robots. Will the robot be able to go up to the 12th floor? Will it be able to go around snowdrifts and curbs? How much will one such device cost? What about his service? And if it breaks down on the road, who will deliver the order? Isn't it cheaper to buy a bike and hire a person?

This is how innovative technology turns out to be out of reachcases, and it is replaced by a regular courier. And behind the implementation of this task, there is also a manager-manager who hires and trains staff, orders uniforms, monitors productivity and maintains accounting.

business and money

Business exists to make money.And technology helps scale processes. How, for example, can you handle 300 administrative cases with two lawyers or launch a massive educational course in English with a limited number of teachers? 

Understand the problem → come up with a solution → test it in different scenarios → automate → scale

When my team faces a problem, I ask how it should be solved. I don’t come up with ideas for them, I don’t rush to spend money on implementing unnecessary technology. 

Such delusions are a common problem among young people.entrepreneurs. They are inspired by the idea, spend all their resources on beautiful packaging and technology development, test designs and invest in promotion. But they completely forget that the product (technology) should solve the specific pains of consumers and help the business scale.

The correct solution for this situation is:launch a minimum viable product with minimal investment, quickly test the market need of the idea, and then iteratively develop the product, occupy new niches and enter other markets, but only on the condition that the technology simplifies and scales the operational activities in the company, and not the team works to ensure development of technology for the sake of technology. It's like paddling. If one side of the boat does not row, and the other rows twice as intensively to compensate for the inaction of the partners, then there will be no sense from this anyway - the boat will simply be turned in the opposite direction.

How Tech Startups Develop

German FinTech startup Wundertax has digitizedwork on tax refunds for certain segments of the population. By the way, in Russia, such a “startup” has long been the taxpayer’s personal account on the website of the Federal Tax Service. In Germany (as in many other countries in Europe and not only) there is still a gigantic scale of bureaucratic paperwork. Obtaining any document, permit, or certificate can take months, because all notifications come in the form of regular letters to your mailbox. Even if we imagine that Deutsche Post AG (German postal company) operates without cases of lost letters, the volume of mail transfers does not significantly speed up the processes of receiving correspondence. Tax refunds in Germany also have a number of features for each segment of taxpayers: resident workers, freelancers,  students, migrants, police and military personnel, etc. Figure out whether you need to file a return, as well as taxes on what expenses can be returned in your case, collect the necessary documents, go through paperwork and manage to do all this within a limited time time - was a serious challenge for those who do not have a financial education and do not know the intricacies of the process.

Wundertax service digitized all steps to receivetax refund: from the system of preliminary assessment of the amount of the tax refund to the registration of documents with the tax service using Tax ID, which imposes additional obligations on data encryption and tracking the status of the application. All of these steps were created and designed to automate the work of tax consultants, who form the basis of the Wundertax service. Working with certain categories of clients, determining the specifics of the taxation of each group and service support remain the basis of the company's operational work. At the very beginning, the German startup went through a long iterative development path, starting with the peculiarities of tax legislation and creating a consumer path for successful digitalization. Even now, a consultant is behind any controversial moment, and a whole expert group reacts to any change in legislation in this area. The regular operating activity has not ended even at the stage of technical maturity of the product.

When did judicial precedents appear in Russia inIn the sphere of copyright protection, I decided to test the idea of ​​a service that would automatically detect the theft of content and negotiate with violators about compensation for the authors of this content: I found a photographer who faced the problem of theft of works, connected a lawyer, together we achieved compensation. And I realized that the idea might be in demand. I quickly put together a landing page, launched ads, and got my first audience. The next step was to develop technology for searching for content usage, including on marketplaces, and risk scoring. The risk scoring technology allows you to assess the likelihood that a particular Internet resource uses pirated content and analyzes the practice of such cases from judicial practice to calculate the amount of compensation.

In parallel with the development of the LegalTech product, Ibegan to assemble a team of lawyers who would apply all technological developments to a standard procedure for interacting with all participants in the process - the content author, the offender, the court, the bailiff, and even the postal service. Without knowing the nuances of working with the judicial system, the intricacies of filing claims, the deadlines for filing documents and making decisions, and many, many other important issues, it is impossible to write an algorithm that will automate the process to perfection.

Any examples of FoodTech services will show thatsuch a business is basically impossible without well-established operational activities. The food delivery market in Russia is estimated at hundreds of billions of rubles, which means that the need for couriers is one of the most acute for such a business. The Russian last mile delivery service Broniboy, focused on consumer delivery under its own brand, even organized the sharing of couriers (training and management) for third-party companies that do not focus on debugging work with personnel and business processes for hiring such employees.

Taking into account the peculiarity of each individual Tech startup, I define a single life cycle as follows:

Idea → Idea testing → MVP → Development of working scenarios and business processes → Creation of a full-fledged product

For an idea to make money, it must bepractical. You need to go through the entire development path (and more than once) on your own, work out dozens of consumer scenarios, draw schemes by hand on a napkin, in order to later understand where the technology can do better than a person. In addition, someone should deal with accounting, personnel and ensure that there is always coffee and Internet in the office.

A few tips for those who are launching a new Tech project or are in the MVP stage:

1. Walk the path with the client.Even if you are sure that everything is as clear as possible, do not be lazy to stumble at every step in solving simple (or not so) everyday problems. Top managers of Uber have tried on the role of taxi drivers more than once, otherwise how would they know that many customers underestimate carriers only in order to receive bonuses for future trips from the support service.

2. Don't expect the perfect product. That moment will most likely never come. Work will continue in the second release, and in the thousand and second.

3. Maintain balance. There are times when Tech needs to be relegated to the background, because fakaps in the operating system do not provide the opportunity to demonstrate even the most innovative development to the client. 

This approach helps to avoid situations where the idea has turned into an expensive product that either does not solve user problems or cannot scale.

Core philosophy - don't get hung up onreference technological product. The product must solve the problem of the client, and one technology may not be enough here. Develop iteratively: go through all possible paths with the client, stumble over consumer and bureaucratic barriers, collecting bit by bit knowledge to digitalize the process. Start selling and scaling as soon as possible. If there are sales, then someone already needs the product.

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