Every founder knows that the first few years are the most difficult ones in the life cycle of a startup. This brief period of time that stretches between 1 to 10 years will determine if the business will survive or not. Most startups fail within the first 3 years, others fail after 5 years,  and only a few make it up to the 10th year. But as they cross each of these milestones, the chances of survival improve. 

However, it is common to see startups remain unprofitable even after 10 years but still survive. So what distinguishes those startups that survive the rocky first years of their existence from those that don’t? Well, the answer is not so simple but after studying so many successful startups, one thing is clear, the founders had foresight. They knew the challenges that lied ahead and prepared a solution in anticipation of these challenges.

Every startup is not the same, but they all play by the same rules. So knowing the challenges other founders faced and how they overcame them, will be helpful. It is impossible to account for all the possible challenges so we have narrowed it down to the 5 most important ones and they are;

1. Finding a Niche Market

Startups by nature aim to satisfy a specific market need. This is what sets them apart and gives them a competitive edge in any given market. But finding a gap in the market is no easy fit. Rushing ahead with a product without due diligence is among the leading causes of startup failure. Spending so much time and effort to develop a product that nobody needs can be dispiriting. 

In such a situation, some founders may decide to push on despite the gloomy outlook and they soon become prey to the sunk cost bias. The solution to this is proper market research prior to idea generation. Through market research, you gain relevant intel on your niche market, the competition, customers’ pain points, and strategies to remain sustainable and competitive. 

2. Finding the right solution and executing it properly 

So you’ve done your homework and identified a gap in the market. The next challenge is finding the right solution. This may sound easy, but only if you know what to do. The market can be very volatile and an obvious solution may not be the right one. Take the Microsoft tablet for example. It was released in 2001, ten years before the first iPad. Yet the Microsoft tablet never became as famous as the iPad. Compared to the iPad, the Microsoft tablet was overpriced, hefty, and marketed as a replacement for PCs. 

So it was equipped with the same windows found on every other pc running Microsoft software. Apple saw through this flaw and rather than make a device that would replace PCs, it focused on one that would serve as an intermediate device. Not a PC and not a smartphone, a device that sat perfectly in between. To do this, Apple used a different software on the iPad, made it light enough to be carried around, equipped it with a long-lasting battery, and yet still kept the features minimal so that it didn’t compete with a smartphone or personal computer. 

The iPad had its own place and consumers weren’t confused about where it belonged. Essentially, the iPad and Microsoft tablet are born from the same idea but the execution was different. 

3. Building the right culture

The startup world is rocky, full of obstacles and uncertainties. To sail through the storm, founders must build the right culture from the beginning. This will make it easier to steer the company without worrying about internal conflicts. To build the right culture, you need to hire people with the right mentality and attitude. This is why the startup environment is not for everyone. There are key traits that you should look out for when hiring people to work with you. 

Among these are self-motivation, relentlessness, risk tolerance, and passion. That is not to say you should expect everyone to have all these traits, but it is a guideline that you should follow when considering who will become a part of your team. The one piece of advice we would give is that instead of trying to find individuals with all the right traits, you should focus on hiring individuals that complement each other. So if you have someone who’s relentless, then you can find another person who’s passionate. When you have the right people, then the culture takes care of itself. 

4. Finding a balance

Summing up the findings of its survey, the Harvard business review concluded that passion, mindset, and burnout are inextricably linked. The survey showed that entrepreneurs are susceptible to burnout because they are passionate about their work. According to the study, 25% of entrepreneurs experienced moderate burnout, and 3% experienced high burnout. The difference between entrepreneurs who felt burned out and those who didn't is work-life balance. 

Entrepreneurs who didn't burn out are said to have a harmonious relationship with their work while those who burned out are said to be obsessively passionate about their work. From this study, one thing is clear, the passion which is a crucial tool in the success of startups can also be its Achilles heel. So it is crucial for founders to establish a routine that promotes a healthy work-life relationship. Here are helpful tips on how to create a perfect work-life balance. 

5. Fundraising

Startups are not profitable and until they do become profitable, it is up to the founder to raise the funds needed to sustain it. In most cases, results are needed to lure investors into the business. But juggling product development with fundraising is no mean feat. It can be very difficult since both activities will demand your attention at the same time. The solution is simple, find an investor who’s not only willing to bring in the money but who is equally willing to provide extra support in research, market survey, administrative duties, and branding and communications. 

Conclusion

Knowing the problem is half the solution. For startup founders, this means having an appropriate strategy to tackle each of the 5 challenges mentioned above. But while you may be trying to figure out a solution to all these challenges, we have good news. Why not let us do the heavy lifting while you focus your attention where it is most needed, running the company. Our company Epirus Ventures is a venture builder with the sole purpose of empowering entrepreneurs. We cover the basics - marketing, strategy development, funding, communication, branding, and market research. So that you can focus on what really matters. Visit our website @ www.epirus.vc  

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