While Young tech firms are known for their innovation, novel approaches to problem solving and the creativity of their programmers and design teams, many of these firms are also plagued with problems. Young tech firms face issues such as poor management, lack of product definition, lack of corporate strategy, mismanagement of funds and a lack of workplace diversity. Some young tech companies have challenges growing and commercializing their products and services. As Americans increasingly depend upon technology in every facet of life, young tech firms will need to bring up their games to compete with the mainstays in the field.
Poor management of young tech firms
Some young tech firms, such as SnapChat, have had problems staying on top of security risks such as the recent “porn bot” scam. Industry analysts suspect that the slow response time to consumer complaints about the problem is a result of poor human relations skills in the highest echelons of the company’s management. Because of the app’s rapid growth, its developers may simply not have had the time to ensure that the system was secure, allowing spammers to get through. Another recent security flaw in the app allowed user names and phone numbers to be shared with unintended recipients.
Mismanagement of money
In order to pay staff, develop the infrastructure necessary for a tech company and market the service or product, tech firms need to have investors that believe in the product or service. Many young tech companies are having difficulty finding such investors. In order to go public with a stock offering or to grow the business, capital is needed. One new tech startup, Ziptask, found that they had spread themselves too thin by trying to do too much too soon. Investing in fad technologies and prematurely scaling up staff have affected other young startups such as Shiny Things.
Growth and commercialization of products
Nearly 75 percent of young tech firms startups fail, which makes it difficult even for the best of ideas to grow and become commercial enterprises. The challenge that young tech companies face is knowing how to time the market for what they offer. Since most of today’s newest tech companies serve other businesses, researching the growth, decline and economic analyst expectations is key in growing and commercializing a tech product or service. Firms like TargetProcess have been able to successfully overcome this challenge by fulfilling a niche and understanding what their product intends to solve. Market identification and establishing the firm as an expert are key to commercializing the service or product.