#development, #product, #startup
19 May 2019
Julianna Sykutera

What are the biggest challenges of product development for startups?

Founders of startups know exactly that building an empire is not a piece of cake. Behind the prototype, there are hundreds of hours spent on rethinking the idea from theoretical to practical aspects. At every point, there is a financial gap to fill in and an innovation that has to be covered to be better than the competition. Each member of the startup team is more or less aware of the battle they all have to face. However, there are challenges that can still surprise you on the way to your success. Here are some of challenges of product development for startups.

Funds scarcity

Let’s start from the very obvious one. Building a product without any prior money from investors or grants you can quickly run out of funds. It is the moment when you can either take a loan in the bank and hopefully, one day pay it off or you can delay the progress. None of those two will serve your company, rather diminish your motivation. Without extra cash, you won’t hire key members for your team, fund software or office space. It can be pretty frustrating and affect development. The worst thing you can do in your early stages is to cut costs by minimizing the team. You need the people to create otherwise, you’ll end up with half finished project. What to do to start producing funds? Gain clients! How to get them? Focus on MVP, so the minimum viable product which possesses the basic functionalities able to capture the attention and satisfy the needs of customers.  

Missing the forest for the trees

Lack of attention to the real issues of customers in the target audience is said to be one of the most common reasons for startup product development failure. It is when founders think they know what are the people’s needs without performing solid research and analysis. Then instead of seeing a bigger picture, they tend to focus on small functionalities they think are cool and practical. It is usually after asking a small group of people about their preferences and what would be useful in such a product. Founders should avoid guessing the needs and rather support their ideas with the real field research.

Expanding the team

A good startup team is supposed to be united to achieve a common goal. Being a founder you shouldn’t hire people who will just “do the job” and wait for a pay check. You need responsible, talented and professional creators who will add something valuable to this project and know how product development for startup looks like. Otherwise, you can end up having a team of people who don’t get along well, miss the point of work and are interested only in the amount of money they will get from you. Not to mention the fact, that it may be difficult to communicate with them and be on the same page. Misunderstanding is something that slowly destroys the company from the inside and definitely needs to be dealt with quickly. 


If you fail to prepare, prepare to fail. Life shows that the vast majority of startups experience crisis introducing a new product to the market. Startup teams who focus on winning instead of planning tend to collapse very quickly. It is simply because they don’t think ten steps ahead which is the correct way. And when the sales are not high as expected everyone is shocked and decides on not so smart solutions. Why? Because they try to fix the problem that should have been discussed months before. When the bases of the business plan were covered. It all takes us to the merit of the issue. No matter how great and innovative your product would be, you still need a backup plan for unpredicted situations.

Starting your own business is so stressful, with so many things to be done, that it’s easy to convince yourself that doing the bare minimum for a business plan is enough – Larry Kim, CEO of MobileMonkey, Founder of WordStream.

He wrote an interesting article that includes different business plan templates. Worth to read especially for someone struggling with creative thinking.

Crowded marketplace

Another problem would be competitors. They always show up during the commercialization of the product or even before it was introduced to the market. The list of competitors closely related to the product or its niche should be done a long time before launching the product. However, at this very stage, many startups feel like they can be swallowed by the older, more experienced companies. That’s why they simply give up or lose motivation. At the end of the day, it’s all about how many products were sold and how big was the interests. Fresh startups have a difficult task because to succeed first they need to gain credibility in the eyes of customers.

To learn something more about common mistakes made by the beginners there is a special website dedicated only to this topic. Startup Graveyard is a place where you can read about reasons for the failure of many startups that have been on the market for some time and one day disappeared. 

To sum up challenges of product development for startups

The success of new startup product development depends on the reliability of the business plan. A good team where people strive to achieve the same goal is also crucial as well as transparent communication between members. Lastly, remember about brainstorming the idea and perform a satisfactory amount of research. Most important is to state what are the needs of the target group. And yes, there can be a lot of obstacles on the way nevertheless, you can’t win if you don’t play.

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