Have you ever considered, why so many startups are falling down? This question is really difficult to give the one proper answer. We have been watching this market for the last 7 years. Opportunity to cooperate with many of them could us closely look at their greatest challenges and problems that had to be faced.
This is the biggest challenge of any startup. Only the appropriate financial resources allow the product to develop and enter the market. The size of financial needs depends on the industry and the specificity of the startup’s activity, but only a properly secured budget allows you to grow further and further. The problem is often observed is the lack of access to investors, who would be potentially interested in supporting a proposed project. It consists of the lack of business contacts and the difficulty with the process of investments obtaining. A particular challenge is the stage at which a startup starts scaling a business and implements its solutions on foreign markets.
Experience and know how
Nevertheless, there is a chance for a startup success, regardless of the funding amount. It is possible thanks to the appropriate competences and skills of people who run it. You need both business skills, knowledge of the market situation and broad environments that can be an inspiration for effective actions. Even the best idea must be supported by a well-designed business plan and a well-defined business model.
People provide successes. A qualified team of employees that creates a team of experts in a given topic is a pearl of any startup. Unfortunately, building such a team is not easy at all. First of all, the recruitment processes through which the wrong people are employed often fails. Another problem is the availability of professionals on the market. The specificity of the startup industry is related to the dynamics of changes, relatively low stability and the necessity of a large time commitment. These are the factors that discourage many good employees.
Modern technologies require the startups to have the latest technological solutions. This factor is in particular related to companies that base their development on highly advanced technology. This necessity is directly connected with a proper knowledge and financial resources. And this makes the perspective of a startup raise as a big problem.
Barriers to entry
Competition on the market are the last factors that it would like to draw attention to. In this case, the most difficult are the startups that want to start their operations on the markets where large companies with a strong position prevail. Another problem are the specific conditions related to a given industry, which require appropriate regulations. Then it may also turn out that a possible startup activity will be demanding and highly risky from its perspective.
Obviously, these are not the only challenges, which startups around the world must face. Similar factors that determine their growth ,or in this case collapse, are many. A lot depends also on time and location. Berlin has recently become a very popular place for startup development. You can read more about it here.