Challenges of Starting Up in a Tier 3 City


Ankit Goyal

Founder & CEO

There are a multitude of incentive schemes available in India to encourage entrepreneurship yet, startups in tier-3 locations find that there's much left to be desired. Government schemes extend hand-holding to small-town entrepreneurs in the form of financial incentives and training support. Yet, startups face a lonesome journey here, owing primarily to hiring challenges, absence of peer groups and lack of aware customer groups.

Today I would like to tell you about my story of starting up at an age of 22. I hail from Kharsia, a small town in Chhattisgarh, and I started operations in Raigarh, a tier 3 city of India in 2016. The journey of starting up in a small city has been anything but easy. We faced multitude of problems, however, we overcame all of them with sheer determination and grit. My objective is to make my fellow entrepreneurs aware of the challenges and what they need to do to overcome them in order to build a sustainable ecosystem in such cities. I have highlighted the top four challenges below.

Hiring good talent

I started as a freelancer and began hiring when I landed more projects. My first team member was Shalu, who incidentally, was from Raigarh. However, to find the next set of team members was a challenge. This, despite advertising in newspapers and on messaging apps and us being the only IT company there. I felt that Raigarh being a small town was not a lucrative destination for job aspirants.

Educating Clients

When it comes to clients, small businesses need more and more clarity on the concepts and ideas. In Raigarh, very few people were open-minded and a good majority are comfortable leading a conventional life. A business thrives on new ideas.

Similarly, prospective clients lacked knowledge of apps and technology. Educating them about the potential and business opportunities in technology is among the greatest challenges in cities like Raigarh. To us, this called for a substantial effort, educating clients about the idea, strategy, brand building, revenue models, technology trends, etc. to help them bring their ideas to the market and solve customers' problems.

Meetups with Competitors and Similar Entrepreneurs

In tier 3 cities, very few people think of starting up on their own, that too at a very young age, so when I looked for like-minded people I always found it difficult to connect, given that most of them migrate to metro cities looking for career growth.

Due to the lack of meetups with the peer community, I could not build a good network in the city. The company missed the perks that come from good networking especially in the initial months.

Absence of big-ticket clients

Sales in tier-3 cities are always limited and you are unlikely to grab large projects as compared to cities. It is hard to convince customers about the value of a project, such as launching a website or an app. Customers are hesitant to spend beyond a limit, as they perceive high costs as wasteful expenditure. This affects the bottom line, in the long run.

Despite these challenges, an undying commitment to your vision and passion for your cause can spell success for your business, irrespective of your location. The ITJunkies journey is testimony to this. More on that, another time.

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