Tech is a competitive space that’s constantly evolving — which means knowing how to innovate and disrupt the market is essential. Starting a tech company takes more than just a good idea. From securing funding and building the right team to planning expansion, there are plenty of moving parts that need to be aligned.
The reality of starting a technology business
When money isn’t a problem, it’s easier to move fast without stressing over the cost — but that’s rarely the case. Most founders start small, with limited funds, and the reality is: building a business under those conditions is tough. Recent data show that up to 90% of startups fail. While around 10% shut down in the first year, the failure rate jumps to 70% between years two and five.
So why do most startups fail? The top three reasons are:
Understanding these common pitfalls gives you a head start. By knowing what to avoid, you can build a more strategic foundation — giving your startup a real chance to grow, scale, and succeed.
Build, measure, learn
Small businesses that focus on constant improvement and listen to user feedback are more likely to grow over time. When you’re just starting, it helps to begin with a hypothesis — something you’ve researched that you believe the market needs.
From there, you can start building, test your idea, track results, and learn what’s working and what’s not. You can ask for customer reviews or gain user insight to see what is liked and disliked by them. That learning will guide whether you pivot or keep going in the same direction. The more you build, measure, and learn — the further you’ll go.
So, curious how to do this? Let’s break it down.
How to start a tech company
Here are 7 steps to take to start a tech company from concept to launch:
Step 1: Understand your market
Start by thinking about the industries you’re genuinely interested in, or better yet, where you already have knowledge or experience. Entering a space you’re familiar with helps you recognise opportunities specifically within that niche and gives you the chance to position your business in a way that stands out.
In tech, markets move fast — so it’s crucial to stay on top of trends and see what your competitors are offering and at what prices. That way, you can find the white space, ensure there’s a real demand, and build from there.
Step 2: Find your unique selling point (USP)
Your unique selling point (USP) isn’t just about what people want — it’s about solving a real, ongoing need. What pain points are your target users facing? What’s slowing them down, frustrating them, or costing them time or money?
In tech, spotting gaps in the market or finding smarter ways to solve existing problems is what keeps you afloat in a competitive space. A strong USP lets you offer something better, faster, or more efficient and that’s what sets you apart.
To drive growth, your USP needs to be laser-focused on your audience’s shared challenges. If your product solves a problem that matters to them, you’re already a step ahead. The more relevant and specific your solution is, the more likely it is to resonate and convert.
Step 3: Design your MVP
When you know your USP and the vision you want to reach, it sets the perfect foundation to create your Minimum Viable Product (MVP). An MVP is the first, simplest version of your product or service that continues to be remodelled over and over until it’s perfect. It gives you the chance to test and refine your USP based on real-world data and customer feedback. You will be able to make changes based on how it performs and then make a new version to test again. Think of your USP as your why vs your MVP as your how.
Be selective. Think about how you can successfully achieve your goal within a minimum set of features. It doesn’t need to be flashy at the start, it just needs to work extremely well. At this stage, watch out for three common mistakes: trying to appeal to everyone, launching in the wrong market, and refusing to pivot when things aren’t working.
Step 4: Gather feedback and test
Once you have your MVP, it’s time to trial it. Share your product or service with your users and get feedback on how to improve before fully launching it. What’s working for them? What do they like or not like? Their insight will guide you down new paths you may not have seen or considered at the start.
The user experience must be seamless and convenient from start to end. It must be intuitive and easy for them the entire time, so they don’t get frustrated or confused, especially in the tech world. Build, test, learn, and then repeat until it’s at its very best.
Step 5: Build a skilled founding tech team
Even if you’re starting solo, it’s smart to bring on a few key roles before launch. A product manager can keep development on track, a designer can ensure the product looks and feels right, and a lead developer can make sure your tech is solid from the start. If you’re really niche, you may want to consider getting some specialists in AI or cybersecurity too.
Whether it be via LinkedIn, your professional network, or with recruiters, there are many ways to find your team. When you’re looking to hire, it’s important to consider both the cultural and skills fit. It’s ideal to find someone who shares similar values and gels well with you as well as shares the same vision and aspirations for the business.
Be clear about what you can offer, the growth opportunities, as well as the schedule of remote vs in-person working days. A strong team that works well together will be stronger than going at it alone.
Step 6: Legally protect your company
Before launching, your legal protection must be in place. Pick one business structure (LLC, S corp, or C corp), because your tax preferences and liability concerns will change depending on which one you are operating under. Once you have that clear, you need to collect all the documentation to register your business to operate within the government. For tech startups with valuable tech assets, ensure your IP is protected by including trademarks, patents, or copyrights.
If you’re hiring any team members or working with co-founders, it’s important to write up contracts for them so roles are outlined and ownership is protected. There may be some specific tech industry regulations that also may need to be considered as well.
Here is a recent 2025 Laws and Regulations Report for Australia. Check it out for further information.
Step 7: Gain the funding you need to scale
Last but not least, it’s raising capital. Some entrepreneurs think this is step #1, but really, this is the last step because the tech idea needs to be tested and created before an investor gets involved. But once it has been, it’s time to start funding so you can scale.
There are a couple of ways to do so.
First, is the simplest, which is bootstrapping. This is where you use your own money or money from close family or friends to support your business at the start. This gives you full control over your finances and the company’s direction.
Next, is searching for outside capital from angel investors or venture capitalists. Angel investors are wealthy individuals who are well-versed in the startup world. They usually invest in high-potential early-stage companies in exchange for equity as well as offer mentorship and extra guidance to the entrepreneur throughout the journey.
Venture capitalists (VCs) are another option, which are firms, rather than a person. VCs invest large sums of money into your business but take more control of it, giving you less. However, businesses tend to scale very quickly with the amount of help they provide.
Lastly, there is crowdfunding which is where a wide range of people make investments, helping to build a community of early adopters. The levels of control depend on the type of crowdfunding that is used. Once you know which funding route you want to take, prepare a strong, snappy pitch that will clearly state what you are looking for and what unique twist your business offers.
Start your technology business today
There you have it! With these 7 steps, you can take your tech startup idea and turn it into a booming technology business. With the right tools and resources, it’s more than possible.
Curious about starting your own tech business? Join our community of innovators and business owners here at Melbourne Connect Co-Working. Filled with heaps of personal and private space, community events, and networking opportunities — this is the place to start growing your business.
Interested in learning more? Contact us here!