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Up for the challenge? 5 challenges to face as an Entrepreneur
If you’re an entrepreneur starting your new venture, you probably already know some challenges are up ahead. As an early-stage VC it’s our specialty to help overcome these challenges, and so we took the time to write about some of the most common challenges – and provide some tips or questions to help you deal with them.
So without further ado – here are 5 major challenges you’ll face as an entrepreneur establishing a company.
Perfecting your solution
It’s not a secret – entrepreneurs are looking to provide the best solution out there: the perfect product. But is anything perfect? And should you always chase perfection? While endless iterations and upgrades might result in some improvement, striving for perfection is keeping you from success.
By spending your resources (time, money, people) on the constant need to perfect, you’re basically burning them away and far too quickly; instead, you should try figuring out how to leverage them in a way that will be beneficial: think of new implementations, look for new ways to market yourself, find strategic partners and opportunities that will facilitate growth. Always remember: a concept does not have to be deemed perfect in order to succeed. Be well-prepared and market-ready, and surely, you’ll be able to soar.
A side note: it’s important to iterate or pivot when the market or feedback you receive requires it. Your initial idea, no matter how good, is a starting point and you most likely will need to change it in the process of growing your company. Look at it as a challenge and not as a barrier.
When looking into a potential investment, we LOVE seeing a startup that is thinking about its future. We’re looking for it in their business plan, in their roadmap and fundraising schedule, and basically anywhere that will change or develop in the future.
So how come we almost always see startups struggle with forward planning? We need to face it: planning your future is hard, especially following one of the most unpredictable years ever. It’s nearly impossible to know what will happen next month – let alone next year. So what can you do?
Start with a list covering all segments that require some future-looking, and consider the big picture; sales, development, HR, marketing, money (and others). Ask yourself:
What happened so far, and how was it enabled? Do you have a clear goal for the future? What will you need in order to achieve results in each segment of your company? What types of resources do you need to make sure you have in order to reach them? What’s the best case and what’s the worst case when it comes to your future plans?
Remember you will also need to plan for the unknown, and leave some room for surprises or for when things don’t go according to plan. Once you have a clear view of your future, it’s time to move forward.
Pipeline and scalability
While the 2 are rather different, pipeline and scalability both have direct effect on the growth of your startup, and both are – well – challenging.
Let’s start with your pipeline: the life force of your sales. Establishing a strong, relevant pipeline is a big challenge but a very important one to tackle if you want your company to grow. The first thing to do would be deciding who your customers will be; What is their demography, company type, location? Are they private people or companies? Try being a valuable resource for them by showing that your product will help them become more successful. See if you can use your existing contacts in order to create introductions, or look for other companies that will be able to suggest your product to their clients. When all else fails – it might be time to hire a professional business developer that specializes in your field of interest.
In parallel, with new clients – comes the need to scale your product, and match the increased demand. We’re not talking about new employees, but also new strategies, new functions that will serve more people, and perhaps even more offices in different locations. If you’ve reached this point of the article you already know we highly suggest planning your future – scalability should most definitely be part of your future planning.
You might have the best idea ever, but let’s be real: there are other solutions out there, and being the only kid on the block is almost impossible. You will have competition – and it will always be on the rise. So how do you deal with it?
Try answering the following questions – how are you different? What’s so special about your product? The thing we love most is asking potential investments to look at their product from their clients’ point of view. Why would they choose your service over others, and what is your value proposition?
Once your value proposition is clear, it’ll be much easier to handle the inevitable questions about your competitors. It’s crucial you learn your competitors and know what they are doing and how they are different, but it’s also important to know to define your product on its own, and not in comparison to others. You will need to understand what you’re up against, and use it as education; what makes them successful, what doesn’t, and how can you leverage it to your advantage.
Yes: money will most likely be a challenge, and sufficient cash flow will be an issue sooner than later. Not having the funds to support your venture can hit hard, and have made the best of companies crash and burn. How can you avoid this scenario? Be thoughtful.
More than once we have found ourselves in a situation where we tell a company they will need to modify their financial plan in order to last until this month or the other; whether it involved cutting paychecks, changing plans or losing employees as a last resort, we had to make sure the company will last if all else fails and they are not able to secure further funds. Whether you’re managing the company off your own savings, gained some substantial income or secured an investment – make sure you channel your funds wisely.
Startups, especially in the early stages, will rely heavily on financial backups; perhaps you will want to provide benefits other than paycheck to your employees, and perhaps you will be able to secure small paid projects to provide some additional months to your runway. You need to be safe and cautious; don’t be afraid to consult your investors or the proper professionals when needed. It’s your job to manage your time and money in a way that will take you to the next level.
And there you have it!
Looking for some extra support? Samurai is always looking for their next investment! If you’re an early-stage B2B Enterprise Software startup with a deep-tech solution, apply now for a Samurai Investment.