The 7 most common problems startups face

You have surely heard of the "survival of the fittest" theory, and probably also the saying that a calm sea never made a good sailor.

Those ideas map perfectly onto the brutal world of startups.

There are 150 million startups in the world today, 50 million are launched every year, and around 137,000 emerge every single day.

But the question remains: how many of them tend to survive the violent waves of change that have completely transformed the nature of the concept itself?

Early-stage companies are no exception to the myriad of challenges we all face today.

In this article, I will walk through some of the biggest problems they run into.

1. Fierce competition

Business is fearless. Competition is one of the biggest survival challenges for startups, and if you run an online business it gets even harder.

A competitive environment keeps startups on alert, because there is no margin for error. Both B2B and B2C sectors find themselves in the middle of this relentless competitiveness.

To survive in an environment that covers both traditional businesses and online ones, they have to be aggressive and show real tenacity to earn the recognition they so badly need.

2. Unrealistic expectations

Success does not come alone: it brings expectations. Most of the time those expectations look realistic, but they simply are not.

Startups tend to run into trouble when they set themselves unrealistic expectations after a resounding success. Remember that success is short-lived and that expectations never stop. Sustainability is the name of the game, and it demands constant effort.

To succeed in a competitive world, early-stage companies have to be demanding while keeping their expectations attainable. That means accounting for available resources, the extent of their growth potential, and other market factors.

3. Hiring the right candidates

One of the most important factors defining a startup's organisational culture is team synergy. A team is made up of individuals with similar abilities and shared goals. To build fruitful team cohesion, early-stage companies have to hire the right candidates.

This is one of the biggest challenges they face in the digital era. When hiring the right candidate for a role, they should remember a golden rule: birds of a feather flock together.

4. Partnership decisions

Partnership is the essence of success. In these difficult times, when companies have to fight for survival, startups, and particularly those in the technology sector, struggle to find trustworthy partners.

Partnerships are highly profitable, but a startup has to weigh various factors before deciding to collaborate with another company operating in the same ecosystem. To benefit from a collaboration, they need to look for organisations with a solid market presence and a good reputation among the giants of the sector.

5. Financial management

Money begets money. Remember that as revenue grows, expenses follow. That is why one of the biggest challenges for startups is financial management.

It is well known that they depend heavily on financial support from investors. Sometimes, when there is an influx of funds, they find it very difficult to manage their finances properly and get bogged down under the pressure.

To handle this kind of situation they have to err on the side of caution. Help from a reputable financial advisory firm can prove very useful in managing the financial crises they face.

6. Cybersecurity

We are in the digital era, and to survive the challenges of this period startups have to be very agile in countering security threats.

The rate of cybercrime has risen dramatically over the past two years and will keep rising in the years to come.

Startups face online security threats, whether that is unauthorised access to employee records, bank account information, or any other information deemed critical to the survival of a technology startup.

To protect all their online data they need robust security systems. A virtual private network (VPN) connection protects a startup's information by providing the necessary encryption and data security, limiting unauthorised access to organisational data on the web.

7. Earning customer trust

Earning a customer's trust is one of the most significant challenges companies face today. With a satisfied, loyal customer base, they can grow and progress towards excellence.

Customers are the real force behind a startup's success. Word of mouth and their presence on social media can give a company an edge over every other business.

To earn their customers' trust and loyalty, startups have to work at implementing a customer-centred working philosophy, so they can reach the level of sustainable growth and progress they aspire to in this demanding, tech-savvy environment.

That brings us to the end of this article. It is true that there is no single solution for overcoming the challenges startups face today.

To cope with the challenges of this brutal business world, they have to be tenacious and strive to keep their integrity through thick and thin.