4 Tech Investments Your Startup Should Splurge On Early

Guest Post, YEC, Startup, Startup Tips, Technology for startupsNo matter how you slice it, launching a startup is a major expense. It can be tempting to cut corners by paying less for certain business necessities. But don’t go too crazy with the budget blade, especially when it comes to technology and your website’s infrastructure. Experience shows that companies that invest in good technology from the outset find a bigger payoff.

The challenge, then, becomes knowing exactly where to invest. Here are some basics:

A Great Website

Your website conveys who you are, what you do, and what makes your company different from the rest. It doesn’t need to be overly flashy — some of the most effective messaging is simple and streamlined.

Your website should have an attractive job application page that outlines your company’s mission. Great employees want to be part of something bigger — a company with a vision — so this page will be one of your greatest assets in attracting A-level talent.

A Reliable Hosting Provider

Choose a larger service provider early on when deciding on a site host. I recommend skipping a VPS (virtual private server) altogether and going straight to cloud hosting, like Amazon’s EC2 CloudStack. On a VPS, if one of the other sites on that server is experiencing a lot of traffic, your site becomes slow or unresponsive. Cloud server hosting is incredibly scalable and can save you headaches down the road.

Email Deliverability

Larger companies pay for email deliverability. An ordinary email system will often send relevant messages to the spam filter. It simply can’t distinguish what should and shouldn’t be tossed out. If you pay for a deliverability service, you are effectively paying a small amount per email (around a cent) to ensure you don’t miss out on important communication.

An Efficient, Scalable CRM

Finally, if you foresee your business having a large number of clients, then you need a powerful CRM (customer relationship manager) from the get-go. Staying on top of your business relationships quickly becomes a challenge with the addition of just a few clients. A basic CRM keeps track of your relationships with clients, prospects and anyone else with whom you do business.

Excel and QuickBooks are too simplistic, too quickly overwhelmed and they don’t scale easily. Google Drive might seem like another option, but it can soon become chaotic and time-consuming. Sometimes, the best option is a custom CRM tailored it to fit your needs, both present and future. If you decide to go with a commercially available CRM program, make sure it is designed to be scalable so it can accommodate your company’s needs as it grows.

The Benefits

Investing early on in great technology can improve your company’s growth in two ways:

  1. It ensures that you can handle increases in demand. Investing in reliable technology, capable of handling spikes, means significant growth won’t stretch your organization.
  2. It will allow you to entertain the idea of large partnerships that can grow your company by multiples. If you’ve got a reliable tech base, then you’ll be in good shape to handle considerable expansion.

Scout Out Technology

A commitment to investing in great technology is one step — then, you have to actually find the best technology for your needs. Here are a few ways to get started:

  1. Do your research. An item’s cost does not guarantee its efficiency. Sometimes, market leaders really do have the best offerings at the lowest cost, but it’s also worthwhile to check out smaller tech companies. What the smaller outfits lack in bells and whistles, they often make up for with a higher level of service, which can prove invaluable.
  2. Ask around. To find the right tech fit, talk to fast-growing tech companies to see what they use. These companies have higher standards than Fortune 500 companies, which tend to be out of touch and use highly complex programs supported by a huge, in-house technology workforce.
  3. Compare offers. Before committing to a technology, obtain multiple bids and demos to ensure you’ve found the right fit at a reasonable price.

Invest in the proper technology infrastructure now to avoid wasting large amounts of time and money later on. You will be set for rapid future growth — and very few headaches.

Chuck Cohn is the Founder and CEO of Varsity Tutors, a leading national tutoring and test prep company with operations in 25 cities, 2,000 tutors and 80 employees. Prior to Varsity Tutors, Chuck was a venture capitalist with Ascension Health Ventures, a $550 million venture capital firm. Prior to that role, Chuck worked as an investment banker in the Energy & Power Investment Banking Group of Wachovia/Wells Fargo.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.



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One comment

  1. 1

    Excellent article! As much as I was hesitant on the CRM acquisition early on, I am certainly glad we did it! I can see right now that it’s already saved me some headaches.

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