Top 5 Challenges for a Founder or CEO of a Startup in the First 6 Months

A true entrepreneurial venture is doing something brand new. It is not a franchise, restaurant or common business model. We work with companies that have some new innovation that provides competitive advantage. Those are the only opportunities that can attract investors, top employees and create some sustainable competitive advantage.

For a truly entrepreneurial venture—something with a unique concept, a large ($1B+) TAM, and the potential to scale rapidly—these are the five biggest challenges a founder/CEO will face in the first six months:

Top 5 Challenges for Startup Founders & CEOs in the First 6 Months

1. Achieving Founder-Market Fit & Defining the Core Hypothesis

• The founder must quickly validate that they have the right insight into the market, the problem, and the solution. The problem must be big with customers willing to pay enough to solve now to have a profitable business.
• This includes refining the core business hypothesis, ensuring there’s a pain point big enough to justify a new solution (change in behavior of the customer), and aligning it with their strengths.
• If the initial thesis is wrong, pivoting early is crucial. Innovation is almost always iterative with customer feedback shaping the new business. Not listening to the marketplace is usually deadly.

2. Building a High-Leverage MVP (Not Just an Idea)

• Many founders either build too much (over-engineer an unusable product) or too little (vague concepts that don’t validate anything). An MVP proves the market need, price point and validates the solution, though more development is expected to improve any product or service.
• The challenge is creating something minimal yet compelling enough to test key assumptions with early users. For any consumer or company to take the risk on a new idea they must see significant improvement from their current method of dealing with the problem.
• The goal isn’t just a prototype—it’s proving whether people will engage, pay, and take meaningful actions that indicate future adoption.

3. Securing Initial Funding & Surviving the Early Cash Burn

• Whether bootstrapping, seeking angels, or raising pre-seed/seed funding, most startups die from running out of cash before they can prove traction. Traction is what brings in the larger, institutional investors.
• The founder must determine what level of capital is necessary to hit critical milestones without over-diluting or underfunding the venture. Typically founders invest not just sweat equity but also need to contribute some amount of cash investment for costs and to get things done with contractors that the founder cannot do themselves. See our articles and training on bootstrapping.
• Convincing institutional investors ($1M+) without meaningful traction requires a serious founding team of two or three experienced executives with long business experience, a clear vision, storytelling, and a large market opportunity ($1 billion or more five years out). Few institutional investors invest in new entrepreneurs who have not built a company before unless the upside is quite large. Angel investors are willing to take more risk by investing smaller amounts, earlier and in less proven teams. However, most expect the founders and/or their families to have put in some capital to bind that founder(s) to the venture in the worst of times.

4. Attracting Top Talent Without Big Salaries

• Hiring even a small team of top-tier early employees (co-founders, engineers, designers, marketers) is tough when there’s little money and no established brand. Usually you must offer some upside in stock options to attract these people. Without that there is little reason to take the personal and financial risk.
• The challenge is crafting a compelling vision that attracts people who are mission-driven and willing to take a risk for equity. Individual contributors will be easier to recruit because a failed venture will not damage their financial position and career as much. More senior people need to see and understand the path to success.
• Many founders make the mistake of hiring too fast, too slow, or the wrong people, which can derail progress early. One bad hire in a senior position can sink a company so hire slowly and carefully.

5. Finding & Validating the First 10-100 Paying Customers or Users

• The biggest proof point in the first six months is whether the market actually wants what’s being built. Can you create happy reference customers that will pay enough to build a profitable company. Can their feedback make it better?
• The founder must be relentless in finding, convincing, and retaining early adopters—whether that means direct sales, networking, content marketing, partnerships, or some other growth strategy.
•  Many startups build before they sell, leading to months of wasted effort on something the market doesn’t truly need. In fact about 43% of failed startups conclude on failure that there was no need for their product. This should never happen really, as you should be designing your product or service in cooperation with potential customers.