Ten real problems from real start-ups – and what they did about them

Margaret Paton

As a start-up, there’ll be some eye-watering struggles and stresses; some you might have known to expect, but others will crash in front of you like a dead branch. But don’t let that put you off – it’s all part of the fun! – seriously. To prove it, here’s a run-down of some real-life challenges experienced by start-ups – and perhaps most importantly – from start-ups that are still here to tell you how to handle them.

The uncertainty

Dealing with the unknown. That’s a startup in a nutshell. Fred Schebesta, CEO and co-founder of finder.com.au and creditcardfinder.com.au, a financial and insurance comparison website, recalls the questions he faced in the early days.

“Whether it’s uncertainty about how your product or service will be received by the market, whether or not you’ll be profitable during your early years, or whether you’ll be able to outperform your competitors, one of the most challenging things about being an entrepreneur is having the courage to face the unknown,” he says.

Schebesta’s approach was to invest much time researching the market to understand industry trends, compliance, growth strategies and how his competitors operated. He also does thorough onboarding and training of staff so new recruits don’t work in a haze of uncertainty.

That uncertainty - working tirelessly, but “not knowing when you’re going to make it”, was the biggest challenge for Maria Bellissimo-Magrin, CEO of Belgrin, a full-service creative marketing agency.

“It was tough financially, mentally and emotionally.

“To be honest, you just keep going. You either have it in you or you don’t. I was fortunate enough to have a very supportive husband to be there with me during the highs and the lows, but to also have the steady income for the household until the business grew enough to support me with a consistent salary.”

Believing in what you’re doing

While it’s been seven years since start-up Dimmi, an online restaurant booking platform launched, those early days are still clear memories for founder Stevan Premutico. He’s still Dimmi’s CEO and has kept his team after selling the business to online travel giant TripAdvisor for multi-millions in May 2015.

“The most challenging thing about building your own business is believing in you and the guys around you. No matter how many times you're knocked back or you're told 'no', you have to power on and make yourself and others believe that you’re on to a good thing and it's worth sticking it out,” says Premutico.

“That just gets compounded a whole lot more when you don't have a dollar to your name, you put your parents’ home on the line, your mates are all doing nine to five jobs and all the early investors are saying thanks, but no thanks.”

Dealing with the challenge is “knowing deep down that you’re doing something great … to make a little dent in the world”, he says.

“We've built our business on the back of a really strong mantra of helping restaurants run a better business and helping to inspire more memorable dining moments. These beliefs that run deep in our DNA, and that keeps us going when things are a bit bleak.” 

What to do with all that freedom…

So, part of the appeal to create a start-up is freedom – to do what you want – or is it?

Fortress Learning’s Dr Bryan West says freedom was a challenge in the early days of his business, an online registered training organisation for professionals.

“One of the biggest obstacles was choosing what to do with each minute of the day. Since there are no constraints and no external accountabilities, it’s really easy to while away the hours on things that aren’t so important or having less impact as others,” he says.

West overcame this challenge with the Pareto Principle – identifying the 20% of tasks that will make up 80% of the results.

“It helped me get into the habit of dealing with the big rocks before the sand.”

Knowing how to use your time wisely

Meanwhile, Nick Lavidge, founder and CEO of Alley Group, also talks about the ogre of time. His start-up is the “anti-agency” in digital marketing using big data to boost campaigns to help online retailers find and maintain the right customers.

“Finding the right balance can be really tough, especially at the beginning when you are wearing different hats and working on building revenue while keeping costs at a minimum. Even a few years in, with a great team in place, it can still be a challenge.”

Time management is how he tackles it, including letting those around him know about his time restrictions for certain tasks and, importantly, he asks that they work with him on that.

“Anyone who values your time will understand,” says Lavidge.

Digital marketing agency WME founder and MD, Nick Bell, also sees time management as a bugbear. He does a lot of domestic and international travel, but you won’t find him tapping his toe at airports. His rules? Catch the red-eye flights, so he can arrive back at the office first thing in the morning.

“When flying internationally I will take the most direct route and avoid layovers. On the plane, I draft all my emails and replies. If there is no inflight WIFI, that isn’t a problem because I have set up my emails to send once I connect to the internet at my destination. It’s a huge timesaver.”

Time management was also mentioned by Steven Macdonald, co-founder of REIZE Energy Drink and the world’s first energy drink subscription service (it’s sugar free).

“You don't have a ‘boss’ or a ‘manager’ who will hold you accountable. You don't have a set start time and finish time. It is all on you. If you can't find the discipline, day in, day out, to work harder then you have ever worked before, then you will fail. It is as simple as that.”

Macdonald finds the “high energy environment” of a startup co-working space contagious and meets regularly to focus on priorities with his business partners.

Keeping your eyes on the ball

Meanwhile, Carl England, of Simply Cushions, has come across the focus issue in running e-commerce stores with his partner in Australia. They’d moonlighted in their startups for four years before ditching their day jobs.

“We tried to do everything ourselves for way too long. Even though we knew that we shouldn't be doing all of the grunt work, we still found ourselves caught up in small tasks and the details of our business rather than focussing on the more important 'entrepreneurial' tasks.

“It was easy to get trapped designing a logo, managing the updates of our sites etc. These tasks helped make us feel busy, but didn't move our business forward.”

For England, a healthy bottom line means outsourcing as soon as possible when starting a business to learn to “give control of some aspects of your business to others”.

Entrepreneur, author and speaker Christo Hall, founder of Basic Bananas, a marketing and sales training business, also says focus is a challenge for startups.

“It is so easy to get distracted and jump onto the next shiny thing. It takes a bucket load of focus and determination to get a business off the ground. A lot of business owners get distracted and launch ten other businesses before the first one is profitable. Focus on one at a time unless you have a team around you.”

 Hall says “systemising things as best as possible” at different levels of your business from the start is essential.

“If things go off track, you can immediately go back to the last level of growth and continue to maintain a profitable business, even if the wheels feel as though they’ve fallen off the wagon.”

As entrepreneurs we sometimes need to say ‘yes’ to things even if we don’t know how we’re going to make the deadline, meet the request or achieve the end result, but pushing through gets you there, Hall says, as it’s a great way to learn.

He also nudges startups to keep investing in themselves personally and professionally to “ensure you’re on top of the game”.  Plus, you have to be OK with failing – it comes with the territory – and keeping up your mojo.

“You have to be self-motivated … Most business owners will go backwards when they are starting a business and it takes a certain kind of person to keep pushing through the tough times while making little adjustments along the way to ensure constant innovation and improvement within the business.”

Building the right relationships

Not flying solo was also a strategy that Taryn Williams, founder and CEO of The Right Fit, used to deal with a challenge she experienced with her start-up, a digital disruptor among talent agencies.

She says: “You are under pressure every day, from day one to win clients, build a great team, build a culture, scale, find investors, keep those investors happy, and ultimately, especially as a sole founder, the buck stops with you. It’s an incredibly challenging and all-consuming journey, and can at times be incredibly lonely and overwhelming.”

Williams surrounds herself with a “great team and amazing mentors,” has learnt to ask for help and nail the right skill set to reduce the pressure.

“It’s rarely easy, but it’s definitely less lonely when you have people in the trenches with you,” she says.

Earlier this year Ricky Lam set up the digital marketplace, Proquo, to help small businesses connect, swap and trade.

He said: As with any business, it starts with community. Your first suppliers, your first customers are often people that you know or have been recommended to you, by people that you trust. 

“It takes more than yourself to build a successful business. Trusted advisors, suppliers, mentors are as important as a well-developed business plan … as a start-up entrepreneur, you have to leverage all your skills to help grow your business.  Swapping services with other businesses can be a very cost-effective way to get the help you need.”

Dealing with information overload

Pivot Professional Learning, a start-up capturing students’ assessments of teachers to help the later professionalise, offers this.

“There are so many books, seminars, webinars and solutions out there for entrepreneurs, each with their own formula for achieving success. This is an industry in itself and will take as much money and time as you are prepared to give to it. You do need to educate yourself in basic marketing and corporate governance but it's more important to back yourself and just have a go,” say the co-founders.

They tackle it through paying for expertise, continually clarifying and refining their vision based on client feedback and being “informed risk takers.”

Getting your product or service validated

Has your product or service been validated, asks Justin Babet, CEO and founder of the team improvement app, jobvibe.me.

“The biggest time waster in my experience is spending time doing or building things you haven't validated. For example, you have a killer idea for a new product ... so you spend a lot of time and money building the product. Then you show your product to a customer for the first time and no one wants to buy it, so back you go to work on the product again.

“A much better idea is to validate your idea as quickly and as cheaply as possible,” he says.

Babet’s tips on validating your ideas are to put up a cheap one-page website (such as www.instapage.com ) if it’s B2C, take out about $100 of Facebook or Google ads to draw people there. If people opt in with their email addresses, you’re onto something. Survey them to find out more about what they’re looking for and what’s important for them before you build anything. No registrations? Sounds like you might need to move on.

If B2B is where you’re heading, quiz 20 would-be customers through your Network or LinkedIN avoiding family and friends. You’re asking people you think will buy your product. Finesse your brief ‘pitch,’ build in some visual designs or if you’re plugging your app, tap into sites such as 99Designs, Freelancer, Upwork or Dribble for a designer to create a mock up. No cash for a designer? Create a wireframe using free tools like Moqups.

Babet says: “The great thing about validating your idea before you build anything is chances are you've already found some of your first paying customers when you do build your product.”

Knowing when to start paying yourself

Appscore co-founder and MD Alex Louey didn’t take a salary in the first few years of his start-up. Bootstrapped and self-funded was the way he wanted his app development company to operate.

“This experience forced me to work hard, be creative and innovate my way out of challenges rather than buy my way out of problems. Although this was ultimately the right decision, there were certainly some trying times and it was challenging saying no to holidays and some social events because I was putting the company first.”

Planning for the future

So once your product or service has traction, what then? It’s about planning for the unexpected, says Claire Mansell, director of Mansell Taylor Consulting and founder of Motivated Mummy Entrepreneurship.

She says: “No day is ever the same as an entrepreneur (this is something I also love). As organised as you are, challenges will always arise and you just have to run with them and problem solve as you go.

“I'm in the process of launching an online hub for mum entrepreneurs and two weeks ago I lost my entire membership hub that I have been working on for months. Thankfully I had screenshots of most of the content, yet if I had let it, this could have been a major setback which put me back by months.”

Mansell says patience, rolling with the punches and keeping a level head helps her during the hic cups … and disasters. 

Margaret Paton

Former Sunday Age staff journalist, Margaret Paton (formerly Jakovac) has written widely for corporations/government departments and more than 100 online/hard copy mastheads in regional NSW, Sydney, Melbourne and Europe.

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