Well folks, it's November and seems I've got Thanksgiving on the brain. I, like many of you, have started reflecting on this past year and listing the things I'm most thankful for. Being an entrepreneur, technology is certainly near the top of that list; I'm constantly reminded that it's the reason we can do what we do from anywhere and connect with people from all around the world. Certainly reason for thanks! But this Thanksgiving season, I'm particularly grateful for the journey.
Starting a startup is a learning process to say the least. We can't every be totally prepared for what gets thrown our way and sometimes it seems near enough impossible to succeed - particularly when we're constantly being reminded that 90 percent of startups fail. By becoming entrepreneurs, we accept a great challenge that we must work like hell to conquer.
And that is what makes our job great.
If starting a business was easy, everyone would do it - but that's simply not the case. Many would-be-entrepreneurs live in fear of the challenges...I say, let's be thankful for them! So with that in mind, I asked a bunch of entrepreneurs to tell me about the biggest challenges they've faced in their journey. Here's what they said.
Money, Money, Money
Because they're often run by a handful of founders, or one very dedicated individual, the biggest problem facing most startups is funding. Costs tend to outpace income during a company's launch phase and most startups are either self-funded or require outside financing. At the same time, it can be tough for an unproven company to qualify for a small business loan or other assistance simply because they lack an earnings history, and are considered a higher credit risk. CEO Greg Solometo of Alliance Homecare remembers clearly the challenges involved with being part of a self-funded startup, where none of the co-founders drew a salary. "We all had to have separate, primary jobs. Eventually, we grew enough to be able to afford minimal salaries, but those first two years really felt like five."
How great is it to overcome challenges like those as a team? #grateful.
The Menace of Multitasking
When a startup is young, it's not uncommon for team members to have to pitch in where necessary until they're in a position to hire the help they need. Unfortunately, what we often refer to as multitasking is really a form of task-switching, and it's neither efficient nor effective when it comes to business performance. According to the American Psychological Association, there are "switching costs" involved every time we're forced to change tracks from one complex task to another and back again, and those costs take a significant toll on our productivity. This common dilemma is often a major contributor to a startup's growth being minimal during its early stages.
As you face this challenge - don't get frustrated, be grateful. Learning how to multi-task productively is a skill that support your success for years to come.
Standing Out From the Crowd
One of the hardest things for many new startups is to differentiate themselves from everyone else. This is especially true in up-and-coming industries where there are dozens of other companies eager to get their services out there - services like online security and fraud prevention, corporate wellness, and artificial intelligence solutions. Grok is one of hundreds of startups that develop AI-based solutions, and founder Tarun Gangwani understands firsthand how difficult it can be to try and communicate your company's value, and unique approach to a problem. Especially, says Gangwani, "when the hype for this capability outstrips the reality of what other companies can deliver."
Figuring out how to rise above the noise is a puzzle for sure. Good thing entrepreneurs thrive on solving problems!
When you're operating on a shoestring budget, growth seems like a Catch 22. You want to instill faith in potential customers by having a great looking office space, marketing, etc. But you may only have the money to do that once sales start coming in. When you have very little money, it's tough to put your best foot forward...which just means that you GET to be creative. Bill Bennett of LevelOffice faced that problem when it came to finding affordable office space - which prompted him to start his business.
We should choose to be grateful for resource obstacles - they might just lead to bigger, better ideas!
Even after a successful launch, many startups find it hard to gain the traction they need to experience real growth. Some have the opposite problem. There are companies that get big so quickly that they lack the necessary infrastructure and know-how to support their own weight. "To grow any business beyond the "mom & pop shop", you need scalable processes and technologically-streamlined solutions," says Alliance's Solometo. The last thing a young company wants to do is fall victim to the "silo effect", where growth becomes unsustainable due to a lack of information flow between its various parts. Expansion that happens too fast - or in one direction only - can hamper effective communication and lead to a dangerous drop in productivity.
Scaling is, perhaps, one of the biggest challenges entrepreneurs face. But take stock in the fact that you are getting enough business that scaling is necessary - and let that be what motivates you to do it well.
Startups are not for the faint of heart, friends. And the challenges don't stop after you've "made it." This is why enjoying the journey is key. This Thanksgiving, I urge you to see your entrepreneurial challenges as gifts and let the learning process propel you to greater success. Happy holidays!