Challenges for Future-Proofing a Startup Business 

by Ran Craycraft

Starting a business today feels very different from how it felt 10 years ago and is unrecognizable from 20 years ago. The main challenge for startups today is the choice of how day-to-day business gets done in either a physical or a virtual space. This was a much easier decision just a few years ago, as most startups felt the only logical choice would be to find a convenient physical office location and then zhuzh it up to inspire creativity, cozy team lunches and voluntary happy hours. “Culture” was a word at the center of every successful startup. Culture was what set them apart and also what held them together. But how do we develop culture among a virtual workforce?

Startups today choosing to operate in a virtual space benefit from an infinite geographic pool of candidates, but face new challenges of ensuring quality internet bandwidth, managing household interruptions and getting out in front of the growing feelings of isolation that especially impact junior workers. Virtual teams that may not have formed a personal connection with their teammates may also be more susceptible to LinkedIn poaching, which seems to be at an all-time high as teammates get lured away with bigger paychecks and the illusion of job security.

Physical offices for startups are far less common than in pre-pandemic days and those that exist are getting smaller. Long-term commercial tenants are renegotiating leases, transforming their spaces and finding adjacent companies to share facilities as well as the financial burden. Somewhere in between is the short-term, low-risk rental market formerly dominated by WeWork — startups reluctant to sign a lease on a physical space but that aren’t quite ready to be fully virtual. As Google publicly prepares its workforce for a hybrid return to work — that is, an occasional day in the office followed by several remote days — startups are considering following suit in an effort to find balance and maximize the benefits of each arrangement. 

Once employees do find themselves back in an office, will they shake hands? Will masks be required? Will the company issue a vaccine mandate? All these new challenges are in play for startups doing business in 2022. 

Another major challenge for startups in the U.S. is navigating the changing state regulations around the classification of independent contractors and employees. Bootstrapped startups have a very difficult time building a strong, local team if their state requires employee status with benefits and payroll taxes. Instead, many startups, including my own, have no choice but to work with out-of-state or out-of-country independent contractors in order to scale up and down as today’s business requires. However, as geographic boundaries expand for startups, so too do the legal jurisdictions that may one day be asked to enforce the law — creating a very challenging (and risky) situation for employers. 

While these new challenges compound, there are also several new advantages when starting a business that didn’t exist in the before time. It’s never been easier to manage finances and payroll than it is with today’s platforms like QuickBooks Online and Gusto. Recruiting may be challenging due to the increased competition, but the tools and filters available now allow employers to hyper-target candidates with very specific skillsets. The barrier to entry has never been easier for startups ready to explode onto the scene. Within a month, a business could be incorporated, have an online bank account, hire dozens of workers around the world, and be running targeted ad campaigns that secure their first customers. 

While many aspects of running a startup today are definitely more complicated than they were not long ago, the resources at our disposal are infinitely greater — building industries that didn’t exist with jobs that weren’t previously imagined using tools that, well, feel a lot like magic.

Ran Craycraft is managing partner at Wildebeest, a hands-on, digital agency specializing in custom software development for innovative brands.

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