Starting a startup in a pandemic and the top pitfalls to avoid

Small Business Canada

By Chandrashekar LSP, Canadian Evangelist, Zoho Corp.

Founding and operating a startup is far from an easy endeavour, even in the most stable of conditions.

Yes, many startups are founded every year, with some estimates coming in at around 50 million startups founded annually across the globe. But of those millions of new businesses created each year, history shows that about 90% of them will eventually fail and have to close their doors.

Among the most common reasons that a startup is unable to keep its doors open is a lack of understanding of its market, a lack of access to cash flow, hiring the wrong people, and much more.

And once you add in the many logistical issues created by the pandemic and the ever-changing restrictions brought on by it – many of which have further exacerbated already serious issues – there has never been a harder time to start a startup.

Rushing to IPO, buying talent, and other top pitfalls to avoid

Through Zoho’s own beginnings as a startup, we experienced every failure and road bump that one could imagine, but we used those as lessons to become the company we are today and hope to be able to pass along some of those lessons learnt to the next wave of innovative companies.

So without further ado, here are a few of the top pitfalls that we recommend startups and new businesses avoid in their journey to success.


Measuring Success: Too many businesses – especially new businesses – rely too heavily on specific metrics as a measure of their success; whether that be revenue, the new business generated, or other financial metrics. The pitfall in such a strategy is that too often businesses forget to focus on the key building blocks, like company culture, consistent training and talent development, or the company’s role in the community, and fail to create the strong foundation every business needs to survive and thrive.

From its beginning as a startup, Zoho didn’t measure success in numbers, but instead, we focused on the impact on our employees, customers, industry and local communities, built our company on our values and convictions, and avoided focussing on the wrong metrics that can lead you astray.

Starting a startup in a pandemic and the top pitfalls to avoid Click To Tweet

Business Strategy: One of the biggest pitfalls for startups – and one that too many fall prey to – is rushing too quickly to IPO and therefore losing control of the decision-making of their business. Yes, startups need funding to survive, but doing so by rushing to IPO or bringing in too much outside capital is a quick way to lose control of your business and its culture and strategy.

Another major pitfall that many startups fall into is not diversifying their products enough, which leaves them exposed if interest in their key product is less than they expected or wanes over time. By diversifying what you offer as a business, you open up more demographics and ensure that even with shifting market conditions and consumer needs, your business still provides a product or service that is wanted or needed.


Organizational Growth: Succeeding as a small business is one thing, but continued success as your business grows, is an entirely different challenge. The bigger you get, the more talent you need, the more customers you have to keep happy, and the more you need to focus on some of the added “luxuries” of a bigger business.

As businesses gain steam and begin to grow, too often do their decision-makers try to buy talent to build up their team, rather than investing in and focussing on building talent from within. Not only can the wrong outside hire disrupt your entire company culture, but by building from within, you can ensure the values of your business and its mission is a consistent element across your whole team.

Another major pitfall that startups tend to fall prey to as they grow in size is how and where they invest their increased revenue in. Instead of pouring all that extra cash flow directly into your product or service, startups should be focussing on investing their money into enriching the lives and conditions of their employees – both through various benefits to enrich their lives and through technology to empower them in their role – which will undoubtedly lead to better company culture, and therefore a happier and more productive team who want to help you succeed as a business.


Starting a Startup in a Pandemic


If the numerous pitfalls we have covered so far indicate anything, it is that starting a startup is a difficult endeavour, and it has been made all the more a daunting challenge in the face of the pandemic and the many logistical issues it has caused for businesses.

Among the many logistical issues, some of the most impactful has been the complete upheaval of traditional working models, the ongoing supply chain issues, the labour shortage brought, and a stark decrease in revenue among businesses of all kinds.

That last factor – the stark decrease in revenue – plays a large role here, as many businesses have found themselves overspending on business software that does not provide immediate revenue-generating capabilities and thus unable to afford the software they need to shortcut many of the pandemic’s other logistical issues.

Although these logistical issues are complex issues with no one solution, for startups who are struggling to access the talent and cash flow they need to succeed that normally would have been more accessible, there is an area of technology that many smaller businesses have turned to as a means of creating the custom business apps they need despite their smaller teams and more modest cash flows.


Leveraging low-code to shortcut a lack of talent and access to funding


Low-code is a term applied to platforms that allow users to quickly build and deploy their own custom applications with much less coding than the usual development process; often through the act of dragging and dropping various prebuilt code snippets or blocks into a custom design of your choice.

Other tasks that are usually required for traditional development, like creating frameworks and linking databases, are not needed when using low-code.

So how does this lend itself so well to startups and their unique conditions?

Because of the nature of low-code app development and its simplicity and ease of use, businesses can create the custom business apps they need, at a fraction of the usual levels of technical skills, available talent, and money required, and in a fraction of the time usually needed.

And at a time where 65% of businesses (according to Zoho’s recent research into the need for low-code platforms) say that the major IT challenge for their business is a combination of communication gaps, lack of priority for departmental needs, and slow app development process turnaround – all of which are challenges that low-code platforms can easily address – it is not surprising to see that 60% of organizations plan to invest in low-code technology in the near future.

In the past, the major IT challenges outlined above may have been too large of an issue for startups to properly address, with low-code app development capabilities at their fingertips, startups and small businesses can shortcut the issues of the pandemic and can innovatively operate in a way that simply was not possible for business of their size in the past.

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