Today’s startups are confronting a host of unique technical and business challenges, which have only been exacerbated by the COVID-19 crisis. Over the past few months, we’ve set out to learn more about the barriers that startups are currently facing. And, because we know how hard it is to build a business from scratch – after all, we did it ourselves – we want to share some of our findings in an effort to make building your business easier.
In August, we released our Currents report, which surveyed 500 small- and medium-sized businesses (SMBs). Through Currents and other conversations we’ve had with company founders, we’ve identified technology challenges facing new and growing businesses that include the high costs of cloud infrastructure, a lack of technical expertise, and cloud security.
New businesses have fewer resources. The cost of maintaining IT infrastructure presents a formidable obstacle to founders. According to Currents, startups with fewer than 100 employees spend an average of 52% of their budgets on infrastructure. Bootstrapped startups face additional financial barriers and may not be eligible for startup accelerator programs like DigitalOcean Hatch. Transparent cloud service pricing, specifically regarding bandwidth costs, is critical to supporting startups’ success.
In addition to billing, founders struggle with the depth of technical expertise required to manage cloud infrastructure. To quantify exactly how big the expertise problem has become, we asked more than 280 participants in DigitalOcean’s Hatch startup program about their experiences in the cloud in a separate survey this past April. Seventy-two percent of these users were startups with fewer than 10 employees.
We also found that early-stage startups are more likely to lack the technical knowledge needed to maintain cloud infrastructure. Almost 20% of startup founders and engineers had less than one year of experience managing cloud infrastructure, and 63% had less than five years of experience. In spite of this skills gap, our results indicated that early-stage startups are still aggressively expanding their cloud usage during the COVID-19 crisis.
This expertise gap is why our team has invested even more in our tutorials and forums in the DigitalOcean Community, in addition to championing open source software. It’s also one reason why we’ve built App Platform, DigitalOcean’s new offering that helps minimize the amount of infrastructure management required to launch applications in the cloud. We know that moving forward startups will find it even more critical to choose plug-and-play cloud service providers that are cost-effective, secure, and easy to use for those with limited cloud development experience.
Finally, no discussion of the startup business environment would be complete without mentioning the importance of security. Although 59% of leaders in our Currents survey indicated that IT security was their number one priority, startups predictably lagged behind other SMBs in implementing security protocols. Of companies with fewer than 100 employees, a full third deploy no security for their cloud infrastructure.
Startups’ needs for security are why we’ve been dedicated to transparency and educating cloud users about best practices. Within the DigitalOcean Community, we currently have over 1,200 tutorials on improving your cloud security – and that number continues to grow. Not only are these resources platform agnostic, they cover a wide range of topics from server setup and building VPNs to mitigating DDoS attacks and monitoring Linux system logs. We’ve even incorporated free security offerings into our Droplet offerings like cloud firewalls and VPC.
We expect these challenges to continue to impact today’s startups. Startups can overcome many of these obstacles with the correct approach to cloud infrastructure. Our team is committed to helping the next generation of startups build, scale, and enable their dreams with DigitalOcean. If you have any questions or need help getting started, we’re here to help.
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