India has a blooming startup ecosystem, although these creative ventures face countless challenges in this journey of self discovery and learning. Most startups come with an extraordinary dream, although these dreams require a lot of dedication and hard work to build into reality. It takes much more than a great idea to become a successful startup and the determined execution of the idea involves a multitude of challenges for startups. Over the last decade, about half the people in the country have shifted from being job seekers to job creators but only few of them have the access to the startup ecosystem in our country. The academics in the Indian education system does not prepare one to be a successful entrepreneur and starting a new venture is tough and every country like ours has high numbers of startups which face failure than success. The life changing 5Ps, perseverance, passion, personalization, patience and positivity are crucial for the advent of startups. Challenges make the journey of startups interesting and overcoming them is what makes them meaningful and there is no challenge more challenging than the ones which challenge to improve one’s performance. The following are some of the challenges faced by startups:
Competitive Rivalry
The market is fierce and there is intense competition for gaining large market share. Startups face competition from the companies which have dominated in the market making it difficult for a new player to survive and numerous other companies which are launching in the market with their innovative solutions to consumers. Competition posses’ challenges of survival although this competitive environment can help them to work aggressively and efficiently as they have no room for errors. Startups should research and plan their ideas, create a unique product or service, execute the business model and monitor the performance from time to time.
Mentoring
Startups often are unable to mold and execute the idea keeping all the different trends and factors in mind. They need to know the insights of the industry and develop strategies accordingly which will help them to gain a competitive edge and differentiation. Mentoring can help them to add valuable inputs from industry experts and leaders with the relevant expertise and experience in the industry they want to operate in. An honest and unbiased evaluation is needed to break the ice and address the problems better.
Cash Flow Management
One of the main problems startups face are related to finances. With the increasing expenses and delayed invoicing, they struggle to pay their bills while waiting for money to arrive on time from the clients. Startups offer a service or product, and wait for days for receiving the payment after sending the invoices and in the meantime they have to pay all the other incurring expenses. It is highly recommended for startups to have invoice factoring where they can factor their receivables assets to meet its present and immediate cash needs. Accurate budgeting and planning will help to manage finances. In a digital era where everything happens online, secure payments can be made easily through mobile phones and tablets.
Delegation
Startups fall prey to the common trap of doing it all themselves and believe it will be done perfectly only if they do it. They cannot be jack of all trades as there is not sufficient time to accomplish the entire task alone. It is important to do what they are absolutely best at doing and delegate it to the employees who are capable of handling it or outsource it. They might have to pay a little more but it will result in substantial time savings and help them to focus on their key business goals and tasks.
Risk Management
Each startup faces risks while running the business. These risks ascend due to uncertainty about the consumer preferences, market orientation, competitor performances, economic changes and many more. Startups have to confront these business risks, mitigate their effects on the business, prioritize them and adapt to the changing dynamics. Insurance, backup of the database, timely research and an effective judgment call has to be taken so that they can be cognizant to the risks.
There is not going to be a sugar coating on the startup even after they overcome these challenges. Startups face challenges everyday. It is not possible that every idea works and one may try a lot of things but not everything will work successfully. The biggest challenge with startups in the 21st century is the fear of embracing failure. We have been brought up to a culture where success is rewarded and failure is chastened. It is important to dream, have the ambition and vision to set the bars high to enter a whole new world of startups who will drive strengths, diversity and intensify the economy of the country.
About the Author
Devesh Chawla is the Founder and CEO of Chatur Ideas. Leading with excellence is what describes him the best! He is a seasoned wealth manager associated with ultra HNI clients including some of the most reputed CXOs and business across India and overseas. Committed to add value to the startup segment, Devesh is revolutionizing the entrepreneurship canvas in India to the core.
Challenges Faced by Startups of 21st Century and Solutions to Overcome them
