Startup Survival: Tackling Rapid Technological Changes
Wilbur Wright, inventor of the airplane, once said: “No flying machine will ever fly from New York to Paris.” Less than 60 years later, the first human walked on the moon. Fast forward to today, and experts predict that we will achieve more tech progress from 2020 to 2030 than the previous 100 years combined.
Technology is evolving exponentially, driven partly by startups at the forefront of innovation. But as catalysts for change themselves, these companies must adapt and stay up to date with advances in the tech world to achieve success within their respective niches.
As a startup founder, if you don’t have a solid plan to overcome technological obsolescence, it won’t be long before you enter survival mode. In this blog, we’ll share valuable strategies on how to avoid technological obsolescence for startups.
What Does Technological Obsolescence Mean?
Technology or Technological Obsolescence is when a tech-related product or service is no longer needed, not because it’s not useful anymore, but because newer and more advanced alternatives are now available. It could also imply that support for previous product and service versions has ended.
Let’s better understand this concept by way of examples.
Common Technological Obsolescence Examples
Smartphones: Every new release of the Apple iPhone has features that make the previous models feel outdated. For example, the iPhone 12 introduced 5G capabilities and an improved camera, making previous versions less desirable.
Software and OS: Microsoft Windows 10 was a significant upgrade from the previous versions. It boasted higher-level security features and a modern, sleek user interface. Soon after its release, Microsoft ended support for the older versions.
Video and Audio Formats: Today, streaming services like Netflix and Hulu have replaced older technologies like DVD and Blu-ray players. It lets subscribers access and view thousands of shows and movies instead of relying on physical discs.
Film: Demand for traditional digital cameras (like Sony, Nikon, and Canon) continues to fall because of the ever-improving, in-built smartphone camera technology. With most modern smartphones, you can take high-quality photos and record videos, so it doesn't make financial sense to purchase a standalone digital camera except for professional use.
Transportation: Tesla's Model S and Model 3 are viable alternatives to gasoline-powered vehicles, especially for people who want to reduce their carbon footprint. Some of these electric cars offer better performance and driving experience. As battery charging/swapping stations grow globally, it’s a matter of time before electric cars overtake their traditional counterparts.
Data Storage: The emergence of Google Drive and similar cloud storage services have made USB flash drives almost redundant. Most people now prefer sharing files online rather than carrying USB sticks around.
Navigation: Navigational apps like Google Maps have now replaced standalone GPS devices. These apps are readily available and accessible and provide real-time traffic updates.
This brings us to an important question, what does a tech obsolescence risk mitigation plan look like?
Strategies to Avoid Technological Obsolescence for Startups
Do Continuous Market Research
Keep up with technological changes and emerging trends by subscribing to industry publications and journals. An easy way to do that is by setting up Google Alerts to get the latest industry news and developments. Another way is to attend conferences, webinars, and local meetups. This way, you're always in the know and can adapt and implement new technologies before your competitors.
Foster an Innovative Work Environment
Since startups (particularly tech startups) are becoming synonymous with innovation, promoting and fostering a culture of innovation within your company makes sense. However, that's only possible if the upper management encourages employees to experiment and take calculated risks.
At one point, Google implemented a 20% time rule, which encouraged its employees to set aside 20% of their work hours (or one day a week) to work on projects of their choice, completely unrelated to their main responsibilities.
By ‘unbinding’ employees from their primary responsibilities and giving them freedom of choice, you increase the likelihood of new and valuable ideas emerging without investing in R&D.
Invest in R&D
Speaking of R&D, startups should ideally allocate resources for research and development purposes to stay ahead of the curve. While the previous two points help foster and promote a culture of innovation, realistically speaking, getting tangible results insofar as improving your existing products and services and setting the ground for future developments requires time and money.
One tip for startup businesses is to contact local universities to interact with talent and offer internship opportunities. This way, you can leverage talent at relatively low costs while possibly creating a pipeline for recruiting ideal candidates in the future.
Build a Skilled Team
You need to hire the right people to establish and grow a startup. These employees are:
Knowledgeable and skilled with the latest tech and
Willing to adapt to new trends
But to hire and retain such individuals, your company must offer competitive salaries and provide training and personal development opportunities.
Take Amazon, for example, which invests heavily in its employees by offering the chance to enroll in its Technical Academy, Machine Learning University (MLU), and Amazon Web Services training programs.
As a startup, your ability to provide such opportunities is probably limited. Here are some inexpensive but effective strategies you can leverage:
Enroll in online courses: Online web learning platforms like Coursera, Udemy, and edX have many online courses across multiple industries. Most of these programs are low-priced (as low as $10) and are taught by experienced people.
Create mentorship programs: Encourage (and maybe incentivize) your more seasoned and skilled employees to lead informal training sessions for newer recruits to enhance their overall skills.
Give feedback: It’s crucial to recognize your employees' growth and, at the same time, share tips on how they can further improve and overcome their weaknesses. Don’t hesitate to give praise where it's due. Each person is different – some might contribute more to your company via increased monetary benefits, whereas others gain fulfillment through praise and recognition.
Create a Customer Feedback Loop
Not knowing what and how your customers feel about your product or service is a recipe for disaster. It might result in your most loyal users jumping ship and choosing a competitor while you're left scratching your head, wondering what went wrong.
If you haven't already, create a customer feedback loop to understand their needs and preferences in an ever-evolving technological environment. Start by offering surveys to encourage feedback directly on your website or relevant Reddit and Quora threads. Then, gather all the information to identify areas of improvement while keeping users in the loop about the latest development.
Consider Slack, the famous team messaging platform. As the app grew in popularity, users began to face difficulties in keeping track of conversations, especially in busy channels. Slack quickly identified the problem by listening to its users and soon introduced its "Threads" feature.
This feature allows users to continue a separate ‘thread’ based on a specific message that doesn’t disrupt the context or flow of the main conversation. The response was positive and solidified Slack’s reputation as a user-centric platform.
Protect Your Intellectual Property
Fostering an innovative culture, investing in employee training, and dedicating resources to R&D can go to waste if you don't take steps to protect your intellectual property (IP). Apply for patents to protect months and years of hard work and register your company logo, design, and other unique identifiers.
That's not all. We recommend staying updated with the IP landscape to not infringe unknowingly on others' rights, as that can drag you into costly legal battles.
Conclusion
You can significantly reduce the risk of tech obsolescence by implementing some of the strategies shared in this blog. However, external changes like regulatory changes or rapid shifts in consumer preferences can render your business model ineffective.
At such a point, repivoting to stay relevant can waste valuable resources. It's better to wrap things up and start planning your next move.
Unfortunately, the traditional model of shutting down startups is incredibly expensive (potentially tens of thousands of dollars) and takes way longer than necessary.
Here at SimpleClosure, we help company founders legally shut down their businesses minus the time delays and excessive costs.