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The scariest challenges facing startups

Posted by Kanika Sinha

August 29, 2016

Launching your startup can be a roller coaster of a ride.

And, it’s not always one that ends with great success. The world of startups is wrought with challenges and missteps.

Did you know that there are 150 million startups in the world, and 50 million new ones open each year?

According to Fortune , nine out of 10 of those startups will fail. This is an unfortunate truth, but we don’t want to sugarcoat the reality.

On the flip side, we don’t want to discourage your startup either. Our aim is to inspire you to work harder and smarter.

To make sure that you are one of the 10% that succeed, we look at the scariest challenges facing startups today.

Recognize them. Meet them head on. Then, step over them on your ride to success.

Let’s look at the challenges you’ll face.


Startup funding exists, and in fact, it’s pretty plentiful right now.

What you need to know is that it doesn’t necessarily mean it’s available to all startups today. It’s most often lumped together and used to fund only the most promising businesses.

Why? Investors are looking for safe investments. They want a sure thing, and if your startup doesn’t look like that, funding may not flow your way.

So, funding tops our list as one of your biggest challenges.


Competition is fierce in today’s business world.

The barriers to entrepreneurship are lower today than ever before because of our instant access to everything and everyone via the Internet.

To negotiate the competition, it pays to find your niche and then find a way to differentiate yourself from the competition.

Once you’ve set yourself apart, don’t forget to monitor the landscape as new companies will arise trying to beat you by doing it better, faster, and cheaper.

Talk to us about how our back-office services can help your startup overcome challenges.


It’s hard to find competent, loyal, experienced staff. It’s even harder to keep them.

Hiring is a huge challenge for your startup, but it’s one you can overcome with the right strategies.

When you do your first hiring, you’re not only looking for experienced people, but you are looking for a group of individuals to round out a collaborative team.

You want to hire a team that’s equally dedicated to your startup. You want a team that has unique skills to bring to your company.

Cyber security

A huge challenge that is often overlooked is cyber security. Danger lurks around every corner.

Surviving the challenges of keeping your digital information safe requires planning and expertise. Hackers are everywhere, and they’re out there looking for a loophole in your security.

Monitor your online security threats. This includes your sensitive information, employee records, customer information, bank info and any other data that could compromise your business.

Startups who neglect cyber security face ongoing challenges. Avoid problems and look for a robust security system to safeguard your data.

Customer acquisition and retention

You need customers to succeed. Yet, this is another one of the scariest challenges facing startups. Finding and then retaining customers requires work and a strategy.

Your customer is not only the king, but the lifeblood of your business.

Acquiring customers takes a strong marketing strategy. Retaining those customers means more marketing aimed at increasing customer loyalty and trust.

To scale your startup, you need customers. Start working aggressively from launch time to build a business geared towards the needs and wants of your customers.

Final thoughts

Yes, 90% of startups fail. But, that doesn’t mean you have to be one of them.

To succeed, you have to meet the following four criteria:

  • You have a product or service that meets a need. You’ve done the legwork and assessed your target market.
  • You don’t ignore anything. You are in tune with the business process, sustainability, employees, customers and more.
  • You grow quickly and can handle the growth. Rapid growth is a big positive for your investors. It’s the sign they need that shows them your product or service is viable. What’s more, growth means more growth… and, growth means consistent cash flow.
  • Your team works well together. They are able to handle issues that arise and seamlessly work together to solve problems.

Deal with the scariest challenges facing startups today. Plan for them and overcome them, and you’re well on your way to startup success.

Want more? Since 2006, Escalon has helped thousands of startups overcome challenges and get off the ground with our back-office solutions for accounting, HR, payroll, insurance, and recruiting and taxes — and we can help yours too. Talk to an expert today.

Image: Priscilla Westra


Kanika Sinha
Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.

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