Share to
Facebook Share to
Twitter Share to Linkedin When launching a startup, coming up with the next “million-dollar idea” is only the beginning—especially when you’re a tech entrepreneur. Not only is the tech industry crowded and competitive, but it also evolves at lightning speed. There are unique obstacles to prepare for as a tech entrepreneur; fortunately, experienced industry leaders can highlight them and share their earned wisdom. Below, 20 members of Forbes Technology Council describe some of the specific challenges tech startups need to be ready for and how to overcome them. 1. Guiding The Team Through Constantly Changing Priorities Be transparent and communicate regularly regarding priority changes. You face a low barrier to entry when starting a tech business. With an idea, a computer and a good software engineer, you’re 80% of the way there. While books can tell you which metrics to focus on at which stages, managing a team through constantly changing priorities requires transparency, alignment and adaptability. - Heidi Farris , ActivTrak 2. Figuring Out The ‘Unit Of Scale’ Tech startups get a premium on valuations due to their hyper-scalable nature. A tech startup, therefore, has to figure out its “unit of scale”: proof of the model working at a small scale, but in a highly repeatable way. A “unit of scale” should be a runbook that addresses a certain scale and can be repeated to successfully achieve linear or super-linear growth. - Rajagopal Natarajan , Xook Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
WWE WrestleMania 40 Results Winners And Grades From Night 2
Google s Surprise Update Just Made
Android More Like
iPhone Cena, Undertaker And Everything That Happened After Cody Beat Roman At WrestleMania 40 3. Adopting An Investor Mindset One specific challenge for tech founders is recognizing when they need to expand their focus from product and strategy to an investor mindset. A tech entrepreneur needs to build their team with an eye on the metrics that make them investable, including burn rate, customer acquisition cost recovery, the lifetime value to customer acquisition cost ratio, and more. - Craig Unger , Hyperproof 4. Creating An Effective Management Structure Tech startups, especially software startups, tend to have small founding teams with fewer than 10 people. Once they achieve market traction, these companies can quickly grow to hundreds of employees. Studies of human behavior have shown that small teams with up to about 50 people can coordinate smoothly. Beyond that, it’s important to create a management structure with multiple small teams. - William Bain , ScaleOut Software, Inc. 5. Investing Sufficiently In IT Support And Operations Due to their limited resources and fast growth, early-stage tech startups typically underinvest in IT support and operations, which has a negative impact on employee satisfaction, security and sales. Hiring experienced, forward-thinking IT leadership early on can reduce your security and privacy risk, help you continuously improve internal workflows and tech, and increase investors’ and customers’ confidence. - Daniel Leslie , Bennie Health 6. Scaling And Spreading Culture The most important challenge is the culture! You must find a way to scale and spread your culture. The company’s culture is the skeleton, and its people are the muscles. Now, imagine you double your muscle mass, but your skeleton doesn’t change—you will feel pain (drama) in different places, and at some point, your bones might break. - Jeremy Albinet , Brainboard, Inc . 7. Finding The Right Talent Tech startups often hit a wall when it comes to finding the right talent—think of it as needing a rock-star band, but only finding solo artists. My tip? Focus on building a culture that attracts and keeps the tech geniuses you need—it’s like turning your startup into the cool club everyone wants to be part of. - Evgeny Popov , Verve Group 8. Mastering The Art Of ‘Unlearn, Learn And Relearn’ One specific challenge that comes with scaling a tech startup, as opposed to a startup in another industry, is the need to constantly stay ahead of the curve and continuously evolve with the rapid pace of technology. The simple tip to overcome this challenge is to consistently implement the art of “unlearn, learn and relearn.” - Shobha Patil , Sankey Business Solutions Pvt. Ltd. 9. Adapting To New Roles And Building Systems For Scalability Scaling a tech startup requires transitioning from hands-on problem-solving to strategic leadership. The key challenge is adapting to new roles and building systems for scalability. Entrepreneurs can overcome this by establishing a robust middle management layer. Empower leaders to handle operations while maintaining the startup’s vision, ensuring sustainable growth and innovation balance. - Peter Geoffrey Francis , VMind 10. Achieving And Validating PMF Scaling a tech startup uniquely hinges on first achieving product-market fit. Premature scaling can drain resources quickly. My top tip: Be patient and validate your PMF thoroughly. Only then should you initiate scaling steps, such as expanding your team or investing in branding. This focus minimizes risks and aligns growth with actual market needs. - Yuri Dvoinos , Aura 11. Outpacing Both Direct Competitors And Indirect Challengers Scaling a tech startup demands relentless innovation to outpace both direct competitors and indirect challengers, such as unrelated sectors encroaching on similar technologies and external threats. To overcome this, building a solid vision, prioritizing agility in adapting to market shifts, fostering a culture of continuous learning and improvement, and reassessing priorities for R&D are crucial. - André Ferraz , Incognia 12. Fostering A Culture Of Continuous Learning And Innovation One challenge is managing rapid technological advancements and staying ahead of the curve. Foster a culture of continuous learning and innovation within the organization, prioritize innovation and invest in ongoing learning. - Madhavi Godbole , Apolisrises Inc. 13. Dealing With The Shortage Of Skilled Workers Among the biggest challenges in our industry are finding the right niche and having the right idea at the right time—and being able to implement it. In our industry in particular, the human factor—its limitations and minimal availability—is one of the biggest weaknesses. In
Germany, we’re always talking about the shortage of skilled workers. - Marcus Banner , RealCore Group 14. Maintaining The Quality And Speed Of Development One specific challenge is maintaining the quality and speed of tech development as the team grows. Communication can become more complex, potentially slowing down progress. To overcome this, implement robust project management strategies and clear communication channels early on. Regularly reassess these systems as the company grows to ensure they remain effective. - Cedric Sims , MITRE 15. Ensuring The Product’s Genuine Business Value A unique characteristic of a software startup is its ability to build really fast and at a low cost. This is much harder for a startup that sells physical products. This perceived low barrier to entry can lead to software startups building tech that creates low business value. To overcome this, startups should deeply research the domain and build low-tech prototypes before investing in full-blown products. - Akash Mukherjee , Chartmetric 16. Overcoming Target Industry Resistance As a fourth-generation dentist, I intimately understand the struggles dentists have when researching and implementing the
tsunami of innovative AI technologies that are coming online. We train doctors in the latest dental implant surgical innovations, and we have found the biggest challenge to be deconstructing old-school mindsets. Getting dentists to try new technology is like pulling teeth (literally). - Mark Whitefield , Implant Evolution 17. Funding R&D And CapEx Spending One challenge with scaling a deep-tech startup is the constant need for R&D and CapEx spending. My top tip for overcoming this is to design the business model so that you generate revenue as you go, with each small step, rather than building out the whole solution before earning any revenue. That way, you can use the revenue you’re bringing in to fund new R&D as you go. - Philip Johnston , Lumen Orbit 18. Managing Technical Debt One specific challenge is taking on technical debt. All startups will accrue technical debt. Be strategic about what debt you take on, but don’t be scared of it. It’s impossible to carry out the appropriate level of experimentation and fast development needed to find product-market fit without taking on some technical debt. On the flip side, if you take on too much too early, you won’t be able to iterate quickly as you grow. - John Arroyo , Citi 19. Avoiding Team Silos As you grow a tech startup, you’ll realize that you’re facing some invisible “communication and collaboration walls.” Below a given size, you get a lot for free. Beyond that bar, you need to change the way you communicate and collaborate and be a lot more explicit and purposeful. Otherwise, the system will increasingly exhibit “islands” of disconnect, with some teams ending up in silos. - Sacha Labourey , CloudBees 20. Weeding Out Distractions One challenge of scaling a tech startup is getting swayed by hype instead of focusing on your core business. External forces can put significant pressure on emerging technologies, such as the Internet of Things and generative AI. Remain focused on the problem you’re solving for customers. The most successful leaders will quickly determine if a new technology has real value to them or if it’s a distraction. - Jeff Shiner , 1Password Editorial Standards Print Reprints & Permissions