5 Challenges You’ll Have to Face as a Tech Entrepreneur

Being a tech entrepreneur is very in vogue and it seems as though everyone and their mother has a great idea for an app or service that will revolutionize the world these days. And many of them think they have a good shot at making it. The reality of the tech business is much grimmer than that, however. One study found that 90% of tech start-ups fail – 20% of which is within the first year.

We can assume that many of these start-ups were probably based on fundamentally sound ideas. This is why you can’t just assume that having a good idea is enough; instead, you have to be prepared for the challenges start-ups have to face. Let’s take a look at some of the hurdles you’ll have to jump over on your way to becoming a successful tech entrepreneur.

Lack of Business Knowledge

If you have an IT or engineering background, you might feel comfortable launching a business that’s rooted in that expertise. However, you might not realize how limiting your lack of actual business knowledge could be, especially in a field like a tech. If you’re dealing with physical products, then you have to know how to set up an efficient supply chain and manage relationships with suppliers. You’ll have to appoint managers at different positions and establish clear processes and procedures. You then need to monitor these processes so you can maximize production while minimizing waste.

Then there’s the whole workforce management aspect of running a business. You’ll have to manage conflicts between employees and the direction, conflict between managers, or conflicts between you and managers. You might also have to deal with a shortage or surplus of employees and trouble finding new blood.

This is why you should think twice about building a tech start-up without having some sort of business education. If you are from a tech field, then something like Aston University’s MSc Business Management with Entrepreneurship would be perfect. You’ll gain all the skills and the knowledge needed to manage a team and avoid some of the pitfalls so many amateur entrepreneurs make.

More importantly, you’ll understand how to plan properly and build a real short, mid, and long-term strategy for your business. You’ll also understand some of the important legal aspects of running a start-up, like managing patents and avoiding intellectual property issues.

Recruitment Issues

You might be very excited about your idea, but that doesn’t mean that people will be excited to work for a company that doesn’t have a track record with an unproven product. This means that you may have some difficulty finding top talent to join your organization at the beginning and some positions may stay vacant for a long while before you can fill them.

Gaps can be filled by utilizing contract workers correctly, however. You may need to work with an agency or find contract workers yourself. An agency could also help you find executives or manage your whole HR department.

Other functions you might want to outsource include payroll management and marketing. Once everything is taken care of, you’ll be able to start building your business and hopefully a solid reputation that will allow you to attract talent without too much effort.

Competition and Disruption

Another thing you’ll have to worry about as a tech entrepreneur is a disruption in your industry. You also have to think about competitors either copying your ideas or coming up with better solutions to the problems you are trying to solve. One mistake a lot of tech entrepreneurs make is releasing products that could easily be added as features on other platforms. This is what the owners of live-streaming apps had to learn when they were made virtually obsolete after Facebook and Instagram decided to add streaming as one of their features. This is why you need to stay 10 steps ahead and constantly on top of new trends. You also have to keep an eye on what your competition is doing at all times. You could emulate some of the things they do well and improve on areas where they’re underperforming.

Financiers and Prospective Partners May Not Take You Seriously

Many entrepreneurs that enter the tech space imagine that financiers and venture capitalist firms will line up to finance or snag any tech start-up that gets launched. However, you have to be ready to hear the word ‘no’ more often than you’d like at the beginning, especially if you don’t have a business background. These people know that many of these businesses fail and have become much more cautious with them. So, if you want to seek financing, prepare for an uphill battle and if you want to partner up with someone, be prepared for them to ask for majority control of your business.

First Mover Disadvantage

If you’ve come up with a new solution, then you shouldn’t assume that being a first mover is automatically a good thing. Blazing trails involves more work and resources than walking a trail someone else has blazed. We’re not saying that you should wait for someone to come up with the same idea as you, but you will have to gather as much feedback on your idea as possible, and you need to determine the goals you’re trying to accomplish and your path to success before you get started.

Even if you don’t have access to focus groups or can’t afford a consultant at the beginning, you can learn a lot from the criticism of the people around you. If you know anyone who you think would want to use your product, ask them if they like your idea. Tell them about the features you want to add, their opinion on them, and if they have ideas of their own that they’d like to share.

We also suggest that you ask other tech start-up owners about their journey and how difficult it was for them. Ask them about some of the obstacles that got in their way, how much money and effort they had to spend to bring their product to market, and how long it took for them to be able to pay themselves.

Becoming a successful tech entrepreneur is not easy, and if you don’t go in prepared, you are setting yourself up to fail. So, take your time, gather advice, and have a clear plan with actionable objectives before you start.