Top six challenges tech entrepreneurs building IT startups are likely to face


The quote “The bigger the challenge, the bigger the opportunity” rightly fits for startups in any sector. The tech entrepreneurs and their startups are the ones driving innovation in the IT industry, the ones that work to revolutionize various sectors like healthcare, education, financial services, travel, tourism, logistics, and many more.

The Indian ecosystem continues to remain attractive for investors, with almost US$ 6.4 billion of funding in the first half of 2017, and the sector demonstrating 167 percent growth over H1 2016. The startup ecosystem also witnessed mushrooming of a significant base of companies building solutions for India-centric grass root level problems across healthcare, education inclusion, financial inclusion, clean energy, and agriculture.

The tech startups leverage the emerging technologies like robotics, blockchain, Machine Learning, IoT, Big Data and analytics, Artificial Intelligence, and fintech, and thus restructure the way of business done in the entire industry. The year 2017 was an especially great one for the e-commerce and fintech startups. According to NASSCOM, the number of new startups in India is expected to cross 5,000 in the coming year. With 7 percent growth from the year 2016, there is also noticeable growth in the challenges faced by the entrepreneurs of the startups. Here are six common challenges tech entrepreneurs will likely face going forward:

Ecosystem management

When building a tech startup, this might be the first challenge that the entrepreneur faces. An ecosystem may comprise of various things such as infrastructure management, maintenance of culture, meeting the day-to-day requirements of the employees, partnership decision making, and a lot more. Managing the ecosystem is likely to be the biggest challenge at the startup level. The entrepreneur may lack guidance regarding having well-defined cultures, clear goals, measurable performance expectations, along with maximizing employee skills and optimizing performance.

The lack of guidance may lead the organization to begin the startup journey without a definitive culture, that may bring the employees to face internal challenges, conflicts, and disappointments.

Fierce competition

Startup culture has become a trend that every graduate thinks of, making it strongly competitive for all of them. Whether giants or startups, competition is always going on in the corporate world. This competitive environment lets the startup entrepreneurs stay focused and dedicated to perfection in order to stay ahead. The competition is steady for both, the B2B and B2C startups out there.

Competition is a challenge that startups can turn into an opportunity in a very easy as well as smart way. The startups just need to play smartly and creatively to build up brand recognition among a large number of businesses expanding rapidly.


Globalization and entrepreneurship can go hand-in-hand to achieve incredible results. Globalization can have a large number of challenges for tech startups, majorly as it is a difficult necessity. Globalization is the key to success, but for startups, it can be difficult to globalize their business.

Cross-border collaboration can be an easy way for startups to overcome the challenge of globalization in an easier and simpler manner than by other methods. Coming up with more options for investment can also help them expand their business globally.


Advancement in technology has been taking place every day. The rate of innovations can make startup ideas outdated in just a day or a month. This can create difficulty for the entrepreneur to survive amidst the competition. The innovative expansion of technology may lead the startups to failure if they lack proper strategy as well as planning for the future.

Finance management

Money begets money. Some startups have enough of it but lack ideas whereas some of them have enough ideas but lack when it comes to funds. You may know the fact that when income increases, expenditure also increases; therefore, finance management is very important for the entrepreneurs.

Managing finances is one of the majorly faced challenges seen among the startups these days. In order to overcome such challenges, they need to have a safe and cautious backup. They can even take help from financial consulting firms.

Talent acquisition

Hiring the right candidate is like getting 40 percent of the job done. For the startups, it is a great challenge to find out the suitable candidate. It is one of the most important factors to define organizational culture within the startup as well. The entrepreneur must know that the team must comprise of the experts with similar capabilities and identical focus.

While hiring, always remember – great vision without great people is irrelevant. Hiring the right one from the ample choices available out there is of paramount importance.

Beyond these six, tech entrepreneurs may face myriad other challenges while building their startups. But it is important to keep one’s vision and goal in mind, and use that for inspiration to keep moving forward.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)