Challenges a startup may face and how to deal with them

Boris Abazher
6 min read

Thousands of startups are founded every day, but only a few of them turn into successful enterprises. 7 Reasons a Startup May Fail. Founder Experience Checklist



Thousands of startups are founded every day, but only a few of them turn into successful enterprises.

As many would consider it the latest current buzzword, “entrepreneurship” is undoubtedly a satisfying idea. But it comes with a fair share of obstacles and hardships to begin a startup since nine out of ten entrepreneurs face the rough and harsh reality of failure.

If you’re ambitious and strive to take your new company to the heights of prosperity, then be aware of stats about what proportion of businesses actually makes it to the peak. It is not meant to deter you, but to encourage working harder and more consciously. Living in a competitive world powered by innovation, everyone seems to have unique ideas and needs to outperform everyone.

You may also run into vicious circles. For example, you might be not able to acquire something you need until you get the other thing, but the other thing is also unattainable without the first. You have to conquer these challenges associated with entrepreneurship, learn to survive the unavoidable hardships, and succeed in the market environment.

Find out how we can help your Make your idea a reality

We have listed a few most common startup challenges below.

1. Product-Market Fit

Product-Market FitFor each company, one of the biggest challenges is identifying a market fit and producing a brand that will be desired on that market. Therefore, the company proposal should be assessed accordingly. A new Fortune report says that creating a service that is ideal for the consumer is the top reason why companies struggle. Failed startups are creating products that nobody wants.

To analyze the target market, recognize consumer needs, and define the rivals, you need to perform market research. Or examine the relevant research that has been done previously and identify the data that fits the priorities and budget plan.

The product is expected to be unique and high-quality before its release onto the market. A reasonable question here would be: “Is the difference just marginal or significant?”

2. Human Factor

hire employeesIt is essential to hire employees that fit your culture best from the very beginning. There are at least two factors of having the right team that will bring you profit:

  • competent people who help you succeed from the start;
  • plentiful interaction among colleagues who delegate roles and solve problems together.

After all, teamwork is an integral part of your company’s blast-off.

“When recruiting my staff, I search for three things: intelligence, energy, and integrity.”—Warren Buffet

Indeed, any business needs to acquire people with specific skills, depending on your market. This is the primary criterion on which your selection should be based. But the problem with the right employees does not end the moment when you finally find and hire them. In fact, 40% of your staff are likely to change their jobs within a year, according to Pew Research. So you need to plan forward on how to keep them.

3. Management of Finances

One of the main reasons why companies collapse is the cash flow problem. Financing your own company is a daunting challenge as you have to spend money to make money. Therefore, using your budget pragmatically and controlling costs without losing financial freedom could be the secret to business planning and assessing new opportunities.

You have two options when it comes to funding: bootstrapping and raising capital from investors. One of the toughest things to accomplish is raising funds from investors, but it is still possible. To get sponsored, you need an excellent presentation, great customer engagement, and seamless processes. On the other side, bootstrapping is a daunting challenge to overcome, but it prevents you from becoming too dependent on investors’ money.

4. Business Data Protection

Business Data ProtectionA significant challenge you have to tackle is the use of data protection and security measures. Cyber Security is a considerable concern for startups since they typically do not have such reliable protection systems as larger organizations. Loss from cybercrimes is increasing strikingly, while more than a third of international threats are affecting small businesses, and the number of attackers is also rising.

Compliance is another reason to protect your records. If you do not have a tight grip on your data protection, you can get into serious trouble. Securing the privacy of your corporate information as well as customer data is essential to you. A rational approach would be to outsource a data protection officer (DPO) without the need for full-time internal staff. The DPO can provide you with help on a variety of issues, such as GDPR enforcement guidance, DPIA specifications, creating and maintaining a data processing database, and so on.

5. Competitors

Successful entrepreneursRising entrepreneurs have to interact firmly and objectively with their competitors; otherwise, they will lag behind. It is required to sense where the opponents are, where they’re heading, and how soon they’re going to get there. But startup people don’t have to get hung up on them. What they need is a thorough analysis of own strengths and weaknesses.

Sometimes it can be helpful to talk to rivals. Successful entrepreneurs are not afraid of reaching out to other business owners in their sector because they want to learn more about the market. By keeping up with the trends in their business, they stay at the top of the game. Besides, being skilled keeps them away from becoming complacent, tests the boundaries, and encourages them to make more practical use of resources.

6. Wrong technology choice

technology choice
Often inexperienced founders choose a wrong tech stack for their project development: either because they heard a trending technology or somebody suggested them to hire certain programmers. Truth told, it’s better to realize the issue later than never.

The signs of the trouble can be observed when the company is stuck with a legacy CRM and avoided modern tools like Salesforce or Microsoft. As a result, it is harder to source talent to run the system or identify third-party applications that could integrate with the product.

Also, choosing a cheap business automation software leaves one’s team with a suboptimal set of tools that slows the workflow. Another example would be choosing physical hardware to build on instead of the cloud, and dealing with outages in servers and missing delivery deadlines.

Unsuitable technology may seem like a little inconvenience at the beginning but turn into a nightmare at the later stage when one needs to scale or expand the architecture. As an offshore software development company with a comprehensive track record, TRIARE helps teams identify such errors and obtain the right tech stack.

7. Execution

least is executio
Last but not least is execution. Based on our vast experience, this is a fatal flaw of most businesses, both traditional and innovative. One may determine value proposition and brand essence, create a marketing plan, and set up distribution channels, but failing to follow the plan diminishes all these efforts.

This is why it is critical to follow a functional framework: from a discovery meeting and road mapping through rapid, agile development to building and growing the product. Startups founders should always stick to the plan, and if it doesn’t work, change that plan.


It’s not a cakewalk to found a startup; to make it a large successful enterprise is even a more far-off accomplishment. But history is full of exciting success stories from which we can learn. Modern times’ greatest entrepreneurs have encountered challenges, obstacles, and even complete failures. But the real grit can encourage one to stand up, face challenges, and move forward. Review our startup founder checklist more often and never fail in execution.

Boris Abazher