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Uzone.id — Startup is one of the hottest industries that everyone is eager to join in, but at the same time, startups are facing many challenges that could make the young company unsteady, even worse, fall into bankruptcy.
The tech industry is crowded and competitive, it also evolves at lightning speed that pushes you to create the “million-dollar idea”. Startup has a unique phase–also struggles that every leader needs to know and ready to face.
There are unique challenges for you as a tech entrepreneur. Below, some of the specific challenges tech startups need to be ready for and how to overcome it.
Inflation and economic instability
Startups are struggling with the ups and downs of the global economy, mainly because of inflation and unpredictable markets. Especially after Covid-19, the global economy is shifting faster even close to the largest global economic crisis in more than a century.
That’s why investors are getting more cautious and looking for business companies that can make money fast. Based on CB Insights reported that global venture capital dropped by 24 percent in early 2024, showing how investors are getting more picky.
A digital economy expert, John Edwards said that startups need to focus on making a profit sooner.
“The ‘growth at all costs’ mindset doesn’t work anymore. With fewer funding options, it’s taking longer and becoming harder for founders—especially new ones—to raise money. Plus, rising interest rates are making it trickier to plan finances,” he said.
The fast-pace of technology transformation
The pace of technological innovation in 2024 is moving like lightning. Technologies like artificial intelligence (AI), blockchain, and quantum computing become trends across industries.
This condition pushes startups to apply these technologies to their company. That’s the key reason for them to stay competitive in the field. However, this is not something easy to do, it needs huge financial resources and talents.
Data from Gartner reports that 62 percent of startups in 2024 are investing in AI, but only 35 percent are seeing a return on their investment. The rest of them most likely failed, or worse.
“It’s not enough to just adopt new tech; companies need to have a clear strategy for how to leverage it to create value,” said tech expert, Daniel Reed.
Notes for the startups leaders, keeping up with technological advancements is not cheap, and if you’re not thinking and moving faster, more tech-savvy competitors will leave you.
Finding the right talent
It’s tough for startups to attract top talent in 2024. These days, skilled professionals have more freedom in choosing how and where they work. LinkedIn Workforce Insights report shows that 17 percent of people choose freelance or part-time gigs over full-time jobs in tech.
That’s why startups need to give more advantage to them. Sarah Wong said that startups need to offer more than just good pay.
Evgeny Popov from Verve Group told Forbes, “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.”
Startups have to offer equity and growth opportunities as part of their packages, this is what startups should pay to stay competitive. At the same time, figuring out how to afford top talent on a tight budget is still a huge challenge for the company, that’s why finding the right talent is a real thing.
Fulfill the customer expectations
Customer behavior day by day has changed a lot, and fast. These days, people are well-educated and care about social issues, they’re expecting brands to be more transparent, ethical, and in the same line with their values.
Sustainable brands or eco-friendly brands are a thing right now. Based on a Nielsen report, 73 percent of Gen Z consumers are willing to pay extra for products from sustainable brands, including make ups, foods, even stationary.
“Today’s customers want more than just a product – they want to know the story behind it,” said Amanda Hill, a customer experience specialist.
Startups should create more innovative ideas and communicate their values effectively. Another point that startups should do is building genuine relationships with their audience.
So, these are some of the challenges that startups face in 2024 and probably next year. Amid these challenges, startups that can remain adaptable, focus on sustainable growth have the potential to stay strong in this competitive area.
