How to overcome StartUp challenges


The world is riding on the StartUp wave currently. Everyday, we have hundreds of news about new startups coming in, StartUps getting seed funded, StartUps getting acquired and a lot more things revolving around the startups. In last few years, millions of startups across the world have changed the way we look at youngsters and the young companies.

It all started with a few StartUps like Google, Facebook, SnapChat, Twitter and Instagram being started b young entrepreneurs or college students and reaching to million and billion dollar valuations in no time. Facebook, which was started in 2004, has made the entrepreneurs believe that the world is not so small that it can not afford just another idea with a new and innovative approach.

Well, as it sounds, starting with a StartUp and making it big is no more an easy task. With the competition at its highest level ever and more and more people trying to make a name, the StartUp market is saturated. There are a lot of challenges faced by the young entrepreneurs in the initial stages of their endeavor. This article is all about the biggest challenges faced by the entrepreneurs in the initial stages.

1. Competition

Business competition

The biggest challenge for anyone starting with an idea is the competition. An idea which might be new now, might have several hundred people working on that a few months later. All this is because of the change in approach which has taken place in last few years. The entrepreneurs are not afraid to take chances. With the new thinking and the success stories of a lot of people around, entrepreneurs do not need a second thought before starting with the idea. No matter how old or young they are, no matter how stable they are financially etc. All this has increased the competition (well, it is a good thing for sure as healthy competition is always a good thing to be in).

However, as I already mentioned, healthy competition is the best thing which can happen to any entrepreneur. Just because of the kind of competition you have, you will be confident enough to take out the unique tactics into the business which might just click at one moment making you the industry leader in no time.

In the competitive scenario, it becomes very important for the entrepreneurs to take their time in analyzing what the competitors are doing. The competition does give you an upper age because you get to know about the mistakes your competitor is doing and you can try not to implement them in your business. Facebook did realize the mistakes done by MySpace and Orkut and tried to go ahead of them, and well, we all know where Facebook is heading currently and Orkut has been officially shut down.

Another such example of learning from the competition is Google. Google was the 12th search engine to start and Yahoo was doing pretty good at the time Google came around. However, after over a decade, we have Yahoo valuing at $39 Billion and Google’s valuation is around $367 Billion (According to as of May 18th, 2015). All this was possible because of Google thinking out of the box to build a search engine which could address all the end-user needs.

2. Business Model & Execution


Once you start working on an idea, the business plan you have with that and the way you execute the idea, both the things matter a lot. Over the recent years, we have seen a lot of promising StartUps evolving out of nowhere, showing that they have what it needs to change the world and then disappearing somewhere. A lot of this happens because of the lack of business execution strategies.

Business model mainly includes everything from manufacturing to marketing. How you make, how you distribute, how you market and how you ship. Before starting with the operations, the StartUp needs to have a proper clarity on each of these things. There have been a few teams of enthusiastic people who start building a product out of enthusiasm and once the product is ready, they do tend to forget the kind of pricing they need to have or the kind of consumer segment they need to target or the demographics where they need to expand. Failing at either of the above mentioned segments can affect your startup pretty badly and you surely do not want to take that risk right at the start.

One of the solutions to this problem can be to take some time out at the beginning. Think about your strategies, your product, market and the customers. Plan out strategies, learn from your competitors, analyze the good and bad things about your business and then act accordingly. Having specific goals for short time periods is the best thing you can do in the beginning. Always have a plan for next 3-6 months ready in the mind and work for that instead of chasing the million or billion dollar valuations. Also, remember one thing, execution is as important as business planning and you need to give equal importance to both of them. A great business plan might just go waste if you do not know to execute that properly. Things look pretty cheesy on paper on inside the air-conditioned offices, however, once you are on them (trying to get some sales for your company or trying to convince a client to try out your product or service), things change drastically. It is always more challenging to do things in real than to see them on papers or to see others doing that.

So my advice remains, take some time out in planning the business strategy and how you are going to implement that. Initial things do have a lot of importance and you can not afford to fail right at the first try. Also, learn from others’ mistakes, because life is too short to try everything on your own.

3. Team issues

Team examples

Having a team of people as crazy as you about your product is always a great advantage for anyone out there. A good team can add to your fortunes and at the same time, improper balance in the team can cause you a lot. There are a few issues which new StartUps face related to the teams

  • Not the right size of the team.
  • One member with a lot of responsibilities.
  • Not a proper coordination among the team members
  • Lack of interest for the product etc

There have been a few examples where the lack of right guys for right roles did prove to be vital for a StartUp. At the beginning, the teams are short and the guys tend to do everything on their own. I have personally seen the computer science graduates taking sales calls and managing the balance sheets despite of having any idea about the same. This is pretty common in the fast paces StartUp scenario and a lot of StartUps fall for it in order to save some bucks.

At times, the think heads of the startups forget that things like marketing and sales are petty big things for the StartUp in initial stage and they should not risk with a computer science guy doing each of those things. If you can not afford a full time MBA, convince someone about your idea and either make him your partner or make him work with you part time without affecting his daily job. In that case, you will get the needed expertise and at the same time, you will not have to spend a lot on hiring someone full time.

Along with that, figuring out the internal roles is one of the most important things. At the time of beginning with a StartUp, most of the people do not care about the roles they have to play, however, once a StartUp is established with a few quality clients, you need to be serious about the roles and specifically, for a few roles like marketing manager, CEO, CFO, CTO.

Lot of people tend to find the right balance in giving the efforts to the StartUp and managing their role. Or a few people might have the jealousy about the other guy getting the CEO role. A simple spat in the beginning can turn out to be a big one in future which might just spoil the reputation of individuals as well as the brands. So these are few of those things which need to be addressed right at the beginning.

Distribution of the roles should be according to the performance and not influence. Having a transparent system with your early colleagues is the thing which can take you and the brand to new heights, because those are the people who will be equally responsible in making your brand a huge success.

4. Hiring

Investor meetings

Hiring for a StartUp is an evergreen issue and till now, there is not a constant solution for that. Hiring is a challenge because of a lot of issues related to trust, financial condition of the new StartUps as well as the expectations.

An employee working in a StartUp might not have the dedication same as the founder, however, the expectations from everyone are huge and surely, new age StartUps do not have all the resources and funds to spend a lot in training, personality development and training of the new employees.

However, the thinking has changes since a bit of time and people are not considering money as the only thing they can get from the StartUps. According to a recent report by a leading US newspaper, most of the new people who are looking to join a startup expect growth and possible share in the equity. If a new StartUp can address the new guys on both these issues, then there is no way hiring can become a serious issue for your startup.

Another such thing which you might need to do while recruiting the new talent is to do things yourself. There are hell lot of recruiting agencies in the world who will help you for huge money, however, despite of that huge sum, you might not be able to get the right kind of talent which your StartUp needs. The recruiting agencies are for big corporate who have all the budget and time to train the candidates from scratch after hiring.

5. Balance between Growth & Quality

Business quality & growth

Quality is one of the most important things for any StartUp out there. In the beginning, literally every StartUp (be it a product or service) focuses on the quality to get things right. To convince the customers, to get the investors and to satisfy themselves.

However, once the startup starts to get established, the priority changes. Once you have a few customers and a profitable business structure, that is the time when the term called growth starts to knock your head and blows you away. With the thought of growing more and more, there are a lot of times when the team starts to concentrate less on the quality and that eventually becomes a serious issue going forward.

A lot of people suggest to have a mentor by the time you reach that level. Having a mentor is surely an amazing thing for any startup as you get a go-to guy who becomes your approach for any trouble, be it in the product, be it in the marketing, be it in the business strategy or be it in the customer management.

Another approach to tackle this problem is to have a dedicated team to monitor the quality of the product or service. The team which can be consistent in determining the quality level of the product by analyzing it on their level or by taking regular feedback from the customers as well as the creators. There are a lot of things which need to be balanced in order to have a proper coordination of growth and quality factor, however, the balance surely works out in favor of the entrepreneur and StartUp because that’s where a lot of ventures fail and I am sure, you would not want to fail at a level where you consider yourself just a few steps away from becoming a well sought brand in your domain.

6. Funding

Initial Angel Funding

Funding is the reason why a lot of StartUps fail. You might have a great idea with a great business plan. You might be running it well or having an idea of running it well in the coming future. However, everything else remains behind the curtains if you can not get right amount of cash at the right time.

Well, funding is surely not the sure shot way of succeeding, however, it does help at crucial times. There are very few StartUps who can actually bootstrap and wait for things to go their way to make it big. As I already mentioned in the beginning, an idea which is new now, might not be new anymore after a few months and in those kind of scenario, the entrepreneurs literally do not have a lot of time and choices than to go and approach the investors right from the day one.

The issue with funding is a big one. There are millions of StartUps struggling to get funding and at the same time, there are lakhs of investors (Angel and VCs) looking for right opportunities to invest their money. This gap in the expectations and thinking of the investors and StartUps is the thing to tackle and most of the StartUps fail to do that.

Approaching an investor should not be the only way forward, you should wait for the right time and then with right planning and implementation, the investors should be approached. According to Martin Zwilling, founder of

Investors do have a lot of money to invest, however, they need to be convinced about the opportunity which strikes. More than “I want money to build my business” what convinces them is “I need money to scale up”. The kind of approach you have towards your own business and the investor is another thing which gets a lot of importance in the investor meetings.

So according to what I got after talking to a lot of investors, the problem is not with the investors nor the problem is with the StartUps. The main issue where problem lies is the approach and that needs to be corrected in order to have a positive impact on the investor right at the first try.

Until and unless you have an amazing idea which has never been implemented and you are the right guy to implement that, investors will really not consider seed funding the venture. Only when you have a few positive balance sheets to show and convince them that the opportunity they have is a good one, they will not come and invest. Having an investor is more like finding a mentor as well as the money guy and this might be tricky sometimes.

So for all the entrepreneurs, looking to get an investor on board, try to implement a business with whatever resources you have. More than the idea, a running business attracts the investors and the chances of your startup getting funded are more. Also, have a right balance in the team. While investing an amount of money, the investors are also interested in the background of all the influential people behind the StartUps. You might not be qualified enough, but relevant experience in the domain can help make the case strong.

The last thing which comes is how you approach and keep your case in front of the investor. There are many StartUps who never get a chance to present their business pitch in front of an investor, so if you have a chance, make the most of it. Have a business plan which gives all the information about your business. The investors do not want to go through 25 pages just to know what you are selling. Be specific about things like what you are providing, how big you can become, what you need, who is your competition etc. First 2-3 slides of your presentation should be enough to give them an idea about your business and business plan. Because those 10 minutes with the projector in front of the investor are the most important minutes you can ever get, because the golden opportunity does not strike twice.

7. Over Dependency on Founder or CEO

When you are working on an idea, it should not be centered on one person. Internet is full of stories where over dependency on one person did cost to the startup. Right from the beginning, it is very important to have specific goals and control over the venture that even if one person leaves, the remaining team can handle things accordingly without affecting the overall operations.

Founder is mostly the guy who treats the startup as his baby and most of the founders can not accept on the terms of diluting their equity to someone other than the investor. The founder is the guy who wants to have the control over the operations and this just proves to be vital sometimes. Well, every single time, it is not really necessary to fail because of that, but it’s better to be safe then sorry. A startup needs 2 major kind of guys, one who can create and the other who can sell. The founder can just be one of those and at times, you need to give control over to others.

This is another problem which actually doesn’t need an expert advice, because things like are internal tasks. This is the kind of issues where having a mentor comes out to be handy as the experienced guy can take you through all the troubles and guide to for whatever is the best.

Well, this was the compilation of the biggest challenges faced by the Startups. Let me know if I missed something or the suggestions you have and we will be more than happy to listen to your views.