Challenges Faced By Tech Start-ups In India

How to Overcome the Challenges while Running a Tech Startup in India?

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There are technological advancements happening on a daily basis. There is constant pressure to come up with something unique or improve the existing product for tech startups. So much so, that research and development is a continuous process taking high priority within a tech startup.


Pressure to Innovate Constantly

Research does not stop, irrespective of the maturity of the product or startup. At the same time and proper execution of a product, the concept is more important than the novelty or revolutionary nature of the product. Chances to succeed improve with a well executed and properly communicated simple idea instead of a revolutionary concept on paper not executed or developed well.

Making People Believe in Your Idea

Most product-centric startups find it tough to convince customers about the value addition a product provides. An exhaustive amount of research around the target group, product feasibility and market acceptability needs to go in even before the actual development or launch. We faced difficulties convincing the end users of our own concept because charging is something people are not used to paying for. People are also apprehensive taking to a novel or unprecedented products/concepts.  Products take longer to gain traction in such cases.

Building a Team & Managing the How

Building a team is an intriguing challenge for technology-based startups. When it comes to technical profiles, any Indian company has to choose from a limited pool of professionals with the relevant expertise and experience. Additionally, these professionals prefer not making the switch to startups from corporates due to the absence of benefits and incomparable pay scales. Startup profiles also come with lower job security compared to roles in established firms. Alternately, employment opportunities are only lucrative to prospective employees if they are completely sold on the idea of the startup. While setting up a core team, one should only onboard people sold on your idea. Nascent stage and pre-revenue startups demand a lot of flexibility from their teams in terms of contribution across diverse functions. Individuals with no clarity around the startup’s overall vision or not convinced by the product utility will not be able to contribute effectively to the startup’s growth story.

Cofounders of startups face a plethora of complicated challenges while establishing their product and brand. They are fighting fires on the marketing, operations, stakeholder management and sales fronts on a daily basis, albeit with restricted access to diverse skill-sets and personnel. The challenge of HOW becomes all the more important in this context. Limited financial resources also make hiring specialists for each profile impractical for startups. Therefore, irrespective of their basic skill sets, individuals are forced into functions they are possibly not the best at, leading to an efficiency loss.

Infrastructure, Ecosystem + Policy Challenges

One of the major challenges we faced is that the infrastructure and policy ecosystem required to nurture the growth of tech-based startups is currently missing from India. Recent positive policy changes to encourage the country’s startup culture aside, stringent regulations, extensive documentation requirements and a lack of indigenous resources for product development are counterproductive to the cause. There is a lack of shared manufacturing facilities which nascent startups with monetary constraints can potentially utilize for production.

Operating in Different Industries

One of the biggest issues with the Indian economy is the fact that the unorganized sector has a significant market share in most industries and verticals. A sizeable number of tech-based startups are working towards product development/services targeting these industries. In the absence of formal channels of communication or SOPs to be followed, third parties like us often face unpredictable behaviour and significant difficulties.


There are multiple avenues of raising funding for a tech startup these days. While interacting with venture capitalists or institutional investors, it is very important for you to define how you plan to monetize your idea. Startups must possess a well-defined revenue stream and the ability to effectively showcase it. This is the single biggest deciding factor when it comes to a startup getting funding.

Any startup should bear in mind 2 principles to assess whether it will be good candidates for raising funds.

1.   It needs to bring direct convenience to end users while solving an existing problem

2.   It should have a definite business model for monetizing the product.

In short, a startup should solve an existing problem with no ready solutions and earn money while at it to be eligible for funding