7 Common Speed Bumps that Slow Down a Startup

Because ideas are easy but real-world business implementation is tough.

Building and scaling a startup ranks near the top of the hardest things to do in life.

As a startup founder, I may not have a brag-worthy P&L statement yet, but my culmination of experience is priceless. Through my entrepreneurial journey, I’ve realized that most startup owners encounter some common speed bumps as they grow from seed to scale.

After attending an all-day virtual startup boot camp, my brain was exhausted. The 8-hour camp included a speed-dating style, pseudo pitch to some “pretending-I’m-interested-in-your-company” CPG Executive. The 20-minute pitch session (or precisely 16 minutes discounting the technical glitch), felt pretentious. Why? Because nearly all startup Founders have faced many cerebral jolting, high-expectation, no-outcome pitch events that end up in adrenal fatigue!

The virtual camp wasn’t a complete waste of time. While talking to several like-minded startup founders in session breakout rooms, I realized we all face similar struggles. In our ‘Build-Your-Own-Business’ journey, we have all experienced euphoric adrenaline build-up, pre-pitch excitement, and a fair amount of letdown.

In my 12 years as an entrepreneur, I have encountered 7 roadblocks that are common for most startups.

1. What is your Revenue? $$$$

The most restrictive rule is when investors/strategic partners expect a startup to generate a million-dollar revenue before they can invest in the company. This is a catch-22 for most startups. If we were already generating that revenue, why would we come to you for seed money?

2. Overrated Consultants

Don’t we love those white-collared, pedigreed consultants, mocking startup owners by saying, “Pay me a $$$ retainer now, so I can show you how to grow your business into a multi-million-dollar gig tomorrow.”

Really? So, you are asking for a huge piece of ‘upfront’ money from a pie-that-is-not-yet-baked!

How about working with us on a ‘future commission’ basis till you prove that your consulting skills can truly generate $$$ revenue?

3. We love your product, but it is not a high demand item

Dear Investor, are you are telling me that you only invest in products/services that have a pre-existing high demand? In that case, how do you expect a startup to generate a million-dollar revenue while differentiating itself from other products/services that are already selling in the market?

Simply put, do you even care about our unique product line, the founder’s passion, or is it just a numbers game for you?

4. We have never heard about your product/service?

Most startup owners face this clichéd comment. If your product/service is so good, why haven’t we heard about it?

Well, that’s an easy answer because we spent our entire startup ‘shoestring’ budget on making a quality product. While our competitors spent theirs on buying up marketing real estate on every social media, print, and traditional media platform. That is why you haven’t heard about our wonderful product yet and we’re knocking on your door to get some marketing funds.

5. Profit-Minded Non-Profits!

Yes, you read right. When a start-up approaches a non-profit organization to align with their worthy social cause, they are often met with this puzzling question.

“How much money can you (startup) donate upfront to support our non-profit?”

Or, in some cases, these nonprofits are already tied up in an exclusive relationship with a larger competitor that gives them a hefty donation. You’re left wondering if these non-profit organizations are truly non-profitable!

6. Why don’t you raise seed money from friends and family?

Agreed, getting seed money from friends and family is the fastest way to convert an idea into a business. But it’s also the fastest way to lose friends and relatives. Because let’s face it, getting them to invest is easier said than done.

When it comes to money, friends and family often reveal their true colors. Forget money, it’s hard enough to convince them to be your trial customers or leave a raving review or testimonial on your multiple social media platforms.

7. Network is Net Worth

On your entreprenuerial journey, you cannot miss hearing this adage from every well-meaning advisor. Build your network.

But when you embark on the networking path, you realize nearly all the business networking events are crowded with other ‘newbie-startups’ in a similar boat. So while you spend an entire day/evening listening and relating to their struggles, the ‘real’ mentors and advisors are lounging behind closed doors, accessible only via personal introductions or a chance meeting. The people who are hugely influential in your industry are busy and rarely have the time and energy to focus on a startup.

These common speed bumps restrict most startups to compete on a level playing field with larger companies. The money they seek from investors comes with a high price tag and a boatload of stress. Often, the formative years of ‘Start-up-Dom’ are spent hidden in entrepreneurial alleys, hoping to be noticed by a benevolent angel investor.

So, what is the magic formula for a startup to scale and grow?

The answer lies in a permutation and combination of these time-tested ingredients:

1. Having a quality product/service that attracts quality-conscious customers
2. Word of mouth marketing by loyal customers never fails
3. Alignment with industry-specific Trade Associations that educate and support small companies on the latest trends, regulations, and reforms
4. Finding ‘mentors’ in your competitors: A rare but true gem if you can find and learn from them
5. Sweat equity: Unicorn successes are rare. Grit, passion, and hard work still rule the business world.

At the end of the day, every successful startup is fueled by action, persistence, passion, and hope. It’s about never giving up on your dream. As Thomas Edison once said, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”