A startup, by definition, is a collection of people willing to take a big risk to solve a hard problem that, they believe, hasn't been solved by better-resourced organizations that came before them. Adversity isn't a given for startups, but it tends to be part of the package. Here are three reasons why:
1. Money. (Challenge: live with a wife on $2k/month in San Francisco)
It takes time to make a startup profitable. During the usually years-long wait, startups tend to either be bootstrapped (in which case, either founder savings or ramen is being eaten) or investor-funded (in which case founders have traded a large percentage of the organization for limited funds). Either way, that cash is expensive.
Limited funds often means that startup founders and employees must make huge personal financial sacrifices until their companies scale and/or make money. Living below the poverty line – sometimes for years at a time with families in the lurch – is breeding ground for adversity.
2. People. (Challenge: 3 of you must do better than 300 of them)
Startups never have enough team members – because the money isn't there to fund those additional people. So a select few frontiersmen (e.g. a startup team) must figure out a way to create a better, more marketable product than whatever their extremely well-funded competitors are able to do.
This generally requires that startup team members wear multiple hats and focus efforts on whatever is required to move their product and business forward. Ever seen a salesperson do accounting? I have. Ever seen an engineer do sales? I've seen that too. It's uncomfortable... it's working in the face of adversity.
3. Time. (Challenge: You have 24 hours to finish a 1-month project)
Startups don't have enough money or people... but none of that matters to Father Time. Startup teams must still run faster than their more established competitors. Or they are dead. The result: startup teams are constantly working on impossible goals against impossible deadlines to surge ahead.
Here's a living example: When my company Avanoo launched our first Fortune 500 client, we were three people entrusted with a business of hundreds of thousands of people. Supporting this client was – even in our investors' opinions – impossible. But that company is still happily working with us today.
Last Thought: Adversity Is What Often Makes Startups Great.
Adversity happens when there isn't enough money, there aren't enough people, and time is of the essence. But startup teams can embrace rather than fear the pain. For adversity requires that we work together to get creative, find new paths forward, and push old boundaries. In the process, greatness often emerges.
Daniel Jacobs is the founder and CEO of Avanoo, a company which creates online employee training videos .