Delve into the history of any successful tech start-up and you will almost certainly find moments when things could have gone very wrong.

While success can sometimes hinge on a moment of chance or inspiration, more often what makes the difference is the decisions that businesses take at the most critical stages of their development.

In this second part of our series of articles exploring each of these critical developmental stages, we consider the key characteristics of success and failure at the earliest stage of Incubation.

The Incubate stage can be broadly summarised as the period during which a business launches its first product or products and establishes a foothold in a market, typically via an initial round of seed funding.

During this stage, there are some key factors that will either set the business on a path to sustainable growth or alternatively, sow the seeds for failure.

Establishing a team to deliver the vision

While it can often take well over a year to develop a compelling product, leaders of successful start-ups will begin day one with a clear vision and clear objectives – including a focused vision of the market opportunity/problem they want their product to address. They will act quickly to solidify this vision, recruiting or partnering to gather the right people with the right technical skills and experience.

Too often, we see situations where companies cut corners when building the foundations of their first products. They may farm out part of their product design and development to a lower cost, inexperienced operation or recruit too rapidly and build a team with the wrong skills. Quality can suffer and technical issues will continue to constrain progress, resulting in a product that is not future-proofed or will prove difficult to scale.

Cutting corners in recruiting at this stage can be the first step towards failure.

Staying focused on the product

In the best-case scenario, a company will not only fully understand the market opportunities but will also build in enough investment and flexibility to iterate their product as market needs and challenges evolve. Leadership and product teams will create optimal conditions for continual exploration and testing with clear (and fast) feedback loops between market demand, direction, and realisation.

Even with a great product, it can often take time for even the most successful start-up to make a major breakthrough in the market. The high quality, experienced team needs to be motivated and incentivised until that breakthrough materialises and must have faith and share the vision that the leaders have established for the business.

The temptation will always be to tailor the product to the immediate needs of a potential client or a promising lead. This could become irresistible, even if it means veering away from the big problem or market opportunity that the core product was designed to solve.

We’ve seen instances where, at first glance, companies seem to have an outstanding product portfolio, but on closer inspection each of their different products are serving a single or a few clients, because they have taken a sales-led, rather than a product-led approach.

Each change to the core product strategy must be fully assessed to ensure it addresses a real opportunity, is worthy of the investment and can gain the necessary returns.

Establishing the right technical imperatives

On a technical level, the Incubate stage involves important decisions that will have an impact on the later stages of development.

In terms of cloud strategy, whilst offering native resilience, stability, and flexibility, it’s vital to establish a coherent strategy for how it will be used – for example, whether systems should be deployed across multiple cloud systems (multi-cloud or hybrid cloud) or whether they need to be cloud agnostic.

Best practices should be implemented from day one, including a cloud-first approach, and 100% CI/CD (Continuous Integration / Continuous Delivery). Given that a software product for a typical start-up may have several hundred thousand lines of code, testing and deploying manually should not be an option. Reengineering to meet CI/CD targets gets progressively more expensive the longer it remains sub-standard.

This is also the case for security, scalability and performance which should be designed into the architecture from day one. As an organisation matures and grows there will always be improvements to be made, but these early design decisions must always keep an eye on the future vision and support the continued evolution of the organisation and underlying architecture.

Conversely, if robust, fully automated, end-to-end processes are established early on, much of this pain can be avoided, yet can often be an area where corners are cut. As an example, infrastructure as code, environment management, data security, elastic scaling, use of cloud services (such as for data streaming, container management services, data querying, file management, key management etc) are all considerations that should be on the list of critical items to be addressed early on.

Each of the decisions taken at the Incubate stage can have a profound impact on a tech start-up’s long-term prospects. Establishing best practices from day one and relentlessly protecting those principles will be critical to nurturing success, as a business moves from Incubation to Expansion – the topic of our upcoming third article.

Read additional articles from this series: