11 biggest challenges we've faced so far on our journey — and what we've learned from startup founder
startup founder knows from the
outset that there will be obstacles. But sometimes they can still surprise you — whether it's because you just didn't anticipate them,
you're unsure of the best way to respond, or you don't have the resources you
need to address them properly.
Here are some of the main issues you need to watch out for,
so you can plan ahead and know what to do if they do.
Challenge # 1: Money
Let's get it right: yes, you need some money. Unless you are remarkably lucky and cash flows in straight away, either from sales or investors, the money will be a matter sooner rather than later.
And when cash flow issues hit a startup, they can hit hard, delay significant progress, such as rolling out products, hiring key staff, or setting up new offices.
You will need capital to fund software or product development, office space, marketing, and more. Most of your success will come from that initial investment. So even though it might seem counter-intuitive when you're trying to minimize financial risk at the outset, the last thing a startup needs to do is cut back costs (and drop staff) in its early days, just when it needs to focus its energies elsewhere.
Entrepreneur David Roth has little patience with the people who founded the startup and then ran out of cash: "As leaders, it's our job to manage the time and money needed to get to the next level without running out of either." So plan it all out before you start, lest you find yourself halfway through and suddenly fall out of the air like Wile E. Coyote's trying to run at full speed across the canyon.
Challenge # 2: Marketing and Sales Neglect
Are you putting enough resources into marketing and selling?
Some startups think they can completely ignore these two functions and hope that word of mouth is enough. Or if they are a SaaS company, they might believe that online sales are going to grow organically and that IRL sales and marketing teams are not needed.
But it's a false economy to put your faith in customers discovering you unless you make a concerted effort to grow them with a well-structured plan to promote your start-up. An easy-to-use website builder like Bookmark is a great resource that can help you get your online presence started quickly.
Once your site is up and running, investing effort in SEO can help ensure that your website is accessible to search engines and that your content ranking for the relevant keywords drive visitors to your website. Using startups can help you monitor your SEO health and identify opportunities to improve your online visibility and when you build your sales and marketing functions from the ground up, take the opportunity to make them as aligned and integrated as possible right from the start.
Challenge 3: Lack of planning
It's amazing how many startups fail because they "forgot" to plan. Or maybe they did a plan, but they just didn't cover all the bases. Key areas such as sales, development, staffing, skills shortages, and funding are not an afterthought. They should all be part of your business plan right from the start.
Not only that, but you also need to plan things that you can't plan for. That is, even if you can't prepare for every event, you need to know what you're going to do when (not if) events take an unexpected turn. If your business plan is all optimistic and doesn't allow surprises, then you're going to have a lot of trouble. As the saying goes, "if you can't prepare, prepare to fail." So don't leave the details to later.
Challenge # 4: Find the right people
Certain skills are crucial not only for your business to survive, but also for your business to grow. Knowing the exact skills you need — and how to get those essential people on board — may be a determining factor in how well your startup thrives.
Delays in finding the right staff are costly. For a small team, the recruitment process consumes valuable time that could be spent on other areas of business, but, on the other hand, not having the right people can create serious bottlenecks and stall the roll-out of new products and services. These are hold-ups that no startup can afford, especially in the early days. And, as your company grows, you might find yourself facing another tricky staff problem: realizing that you hired the wrong people. (Or the right people in the wrong roles.) These kinds of uncomfortable truths can be revealed when the startup is expanding and the cracks are suddenly magnified. That's why it's so important to make it a priority to set out your hiring strategy right at the start. Then, when you're clear about what you're looking for, strategy key hires and thinks carefully about each role that fits in with the goals you want to achieve.
Challenge 5: Time management
In startups, as in life, there's never enough time left. There are a million and one decisions to be taken and only 24 hours a day (and some of them are supposed to be sleeping). So start with eliminating or minimizing distractions — anything that gets in the way of running your business.
Focus your time and energy on the most powerful things. Ask yourself: what's important and what can be postponed until tomorrow? What's stopping your company from growing? Those are the answers that you should be dealing with today.
And when you're trying to set priorities, borrow a tip from former Olympic athlete Ben Hunts-Davis and ask yourself: is this going to make the boat go faster? In other words, will this decision or action have significant, measurable, positive results that will help you meet your targets? Or is it just a "nice to have" you can add later on? Cut the noise and focus on things that move the needle (or the boat) around.
Challenge # 6: The Founders
It's hard to believe, but the founders of a startup — the very same people who passionately nurtured their idea from nothing to business — may actually be contributing to their woes. While the founder may have developed a great product and set the wheels of the entire venture in motion, they can't do it all. And even if they could, they're not supposed to. It's not just a time thing (see Challenge # 5), it's a skill thing.
Good leaders know the extent — and limitations — of their expertise. They know that being a great developer, for example, doesn't necessarily mean being great at sales/finance/marketing / HR / all the many other things a startup needs to do to make a successful scale.
So if you're a founder, avoid making the big mistake of thinking that you can do it all on your own. Don't listen to all the work and major decisions for yourself; spread the workload around. Hire other executives who can fill your knowledge gaps and listen to what they have to say.
Challenge # 7: Scale up
So your products or services are experiencing phenomenal growth — you're lucky! But now you're going to find yourself with a whole new set of headaches as you try to scale to meet this increased demand.
It's not just a matter of adding a few extra staff. As we've learned from Challenge # 4, you need to be strategic and prioritize roles that will have the most impact — and they're not always the ones you're thinking about. You may need to hire more HR staff (since you suddenly have a lot more staff), or you may need to focus on building up functions like administration, payroll, or support.
You may also need a larger office space to deal with your increased staff numbers (and if you haven't budgeted for that, you'll need to come up with a real quick alternative if you want to avoid stacking employees like Lego). Or you may need to set up offices in other cities or abroad so that you can better support your key customer base.
That's the price of success. If you've got a plan and cash to fund all of this, great. If not, prepare for a painful process.
Challenge # 8: Your area of comfort
So, what are you willing to do? Are you prepared to put yourself in the hard yards to make your startup thrive? Can you, for example, make a convincing pitch for potential investors when you need funding? And just as important: is there anything for you that isn't negotiable? Anything you don't want to do under any circumstances?
The early definition of your comfort zone means that you can make provision for this if you need to, so that you can find team members who are comfortable doing things that make you uncomfortable.
Challenge # 9: Contestants
No matter how great your products or services are, the market is crowded. And it's growing all the time: you're not going to be a new kid on the block for a long time, and new rivals can quickly change the playing field.
So you need to put yourself in the place of a potential customer and see how you stack up. What makes your company different, huh? What makes your products so special? What makes your brand unique to you? Why would someone have chosen you over your competitors?
When it comes to your competitors, you need to strike the right balance between "us" and "them." Don't just define yourself in relation to your competitors: you need to be confident about what you bring to the table, too.
But you also need to keep an eye on the competition and the (rapid-changing) landscape. Having the right strategy, being able to think on your feet, and being able to adapt to the new reality, will define your success — or your failure.
Challenge # 10: Poor management
One thing startups can't afford is inefficient management. A management team that has worked well in the initial stages may find itself struggling as the startup expands, as anything from poor sales to market conditions is being tested. You need the right people to make the right decisions.
So, as you build up your leadership team, you need to do two things. (Well, you need to do a lot of things, but let's focus on two for this particular point.) First, you need to make sure that your team works well together. To be effective, you need to keep everyone on the same page. One way to do this is to build transparency in the decision-making process of your management team so that everyone on the team knows how important decisions are made. Second, you need to make sure your team is working well, the period of time. Be on the lookout for what is and isn't getting results, and if you see any underlying long-term issues, address them as soon as you can before they become major issues. It could lead to some uncomfortable conversations — maybe some uncomfortable decisions — but having strong management is vital to steer your startup in the right direction.
Challenge # 11: Lack of mentoring: