Smart Tech Spending for Startups


At a startup, all decisions about hiring, product development, or marketing campaigns have to align with cash flow.

One area that can eat into funding is technology spending. How does a young startup know which technology to spend in, and which technology they need? Oftentimes, the trends of the season are obsolete by the end of the year. And industry experts will praise the unlimited potential of state-of-the-art solutions or hardware.

Navigating this environment is difficult, but not impossible. By taking baby steps, and considering the lessons learned by countless others, it is possible for entrepreneurs to spend on technology intelligently. Rather than rushing to spend in a development project or off-the-shelf software solution, take your time and assess. While a new website or mobile app may seem worthwhile in the short term, you may regret your decision if capital runs low.

Here is a list of best practices I have picked up through my own experiences:

1. To Outsource or Not: For software development, outsourcing can be an efficient and economical option, depending on the scale and duration of a project—especially if software development is outside of your businesses core competencies. This allows your people to stay focused and avoid distraction.

2. When In-House Works: Small projects such as updates to a website for an e-commerce store can often be handled by an individual in-house. But assembling the talent required for larger Web design and software projects can be difficult. Knowing when to conduct in-house IT or outsourcing requires balance and knowledge of your own capabilities.

3. Mobile Apps Should Be Outsourced: If your team is considering the development of a consumer mobile app, it’s a good idea to outsource development. There are plenty of reputed firms out there that specialize in outsourced mobile application development. Shop around and do your research. But prior to beginning a project, make sure you clearly define the business requirements for the app through extensive documentation.

4. Consider Web Tools: If you need more control over your website but hiring an in-house Web developer is not a suitable option, there are other solutions. Content management systems such as Drupal and Mambo make adding and editing content to a website as easy as updating a blog. Drupal is also open source, and provides extensive customization options to organize and manage your content.

5. Digital Marketing and SEO: One of the most economical and effective ways to reach potential leads and new customers is to make sure your customers can find you in search engines. Services such as Google Analytics, Clicky, and Visual Website Optimizer are effective ways to help increase Web notoriety through search. Also consider social media as a means of pushing out content to a wider audience. Quora and LinkedIn Groups, for instance, are very effective ways to share content with like-minded professionals in your industry.

6. Project Management and Collaboration Tools: Take a look at Basecamp and Trello in order to increase productivity and facilitate collaboration. Project management tools can help you meet deadlines and directly track progress. Startups focusing on software development and programming should consider version control systems such as Git and Subversion.

7. Seek Out Guidance: If the adoption of a technology or the desire for software development is beyond your knowledge, startups should consider the help of an IT consultant. By collaborating with experts who are knowledgeable of startup environments, you can avoid numerous headaches and hit the ground running.

Remember that the goal of spending on new technology is to increase productivity and potentially cut costs. By carefully assessing the business value and end result of potential technology, startups can conserve cash flow while increasing operational efficiency.

Himanshu is Founder and CEO of Icreon, a New York-based designer of custom websites and applications. Follow @himanshusareen

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