Technology is the crutch that has allowed hundreds upon hundreds of startups to get going and grow into full-fledged businesses, employers of many, and changers of world. Without some of the simpler tools taken for granted today, many startups would not have happened, and those that were strong enough to function would likely not have grown as big as they have. So going forward, experience says a number of tools are critical for immediate footing and startup technical success. Most start-ups are technology related presently, thus it is a necessity. Having the technology is one thing, but make sure you understand how to use the technology is the main thing.
The most cost-effective and lowest operating demand approach for a startup continues to be use of software before graduating to any kind of physical capital assets. Designs can be transferred by email, production can be outsourced, distribution can be handled by drop-ship methods, and services can be delivered without being physical present. Software is critical to do all the above and then some, including administrative functions. Some of the top tools available include the following:
- Processing payments: Paypal, Square
- Social development and brand development: Google+, Facebook, Twitter, Instagram
- Communication: Hangouts (Google+), Skype
- Document access, control and backup: Dropbox, Box
- Sales and customer records management: Capsule CRM, Nutshell
- Project management: Basecamp
- Accounting: Xero, FreeAgent, FreshBooks
The majority of these tools are free, and eventually small companies can upgrade to better tools, such as Quickbooks for Accounting needs. The fact that these tools can even be accessed for little or no cost is an amazing advantage for startups that didn’t exist ten years ago. This provides a sense of security for start-ups to handle finances more efficiently.
The top technology tools in terms of hardware need to be the tools that manage all the above software, aside from those that produce goods where a product is involved. Laptops and smartphones with requisite Internet and cellular service are the top choices. Most startups can’t function without these tools available, connected, and working. More capacity can be added on later, but without the ability to communicate and compute, most startups won’t go anywhere. And where a startup is really bootstrapping it, laptops and phones can be spread out over leases where necessary. Granted, a person will pay more than buying up front, but on a cash flow basis a startup can function easier until payments start to come in.
However, even phone and laptops can get out of hand. A good rule of thumb to follow is that every new purchase should directly relate to producing more sales or revenue for the business. If the tools can’t pay for themselves within a few weeks or three months, then it needs to be deferred. And where hardware is justified, get only what’s needed. Don’t buy the Porsche of laptops, for example, when a $300 unit will do the job just fine. These two rules should be followed religiously until cash flow is stable and reliable. Technology will change quickly, so the latest tools that seem to ring the bells and whistles today will be a has-been tomorrow. However, all that matters for a startup is whether the tool used today works, and if you have a reliable Ethernet virtual connection. If it does, stick with it until something better comes along that does the job faster or cheaper or both. Don’t get caught up in the fashion parade of showing off the latest tools bought with borrowed money. Instead, focus limited financial resources on stretching as far as possible. The most successful startups follow this plan like a mantra.