A lack of digital ability has been identified as a key contributor to the failure of many UK and London based online start-ups, according to new report.
An independent survey of UK entrepreneurs found aside from financing and raising capital, this lack of digital skills, or ‘digital poverty’, was the principal reason for business failure among the digital SME community.
Entrepreneurs not taking advantage of online tools
The Unleashing Entrepreneurs Online Study, which questioned respondents involved in UK digital start-ups, found that despite the growing number of businesses forming and launching online, many are dooming themselves to failure as they do not have the necessary knowledge and ability internally to successfully manoeuvre around the digital landscape and take full advantage of online tools to improve their business.
Asking the UK’s digital business owners about the key barriers and drivers to entrepreneurialism, the report findings underline the importance of digital education, and in particular, the need for entrepreneurs to have basic digital skills in order to survive in a competitive market place.
Major findings of the report:
- Negative perceptions around small businesses are considered to be the #1 barrier when trying to access funding
- Two out of three small businesses are actively targeting new markets, but being held back by technical challenges including website adaptation adapting and setting up multiple payment options
- 50% of respondents believe digital businesses are more susceptible to failure than physical businesses
- 90% feel the government should do more to support online entrepreneurs
- 65% would consider crowd-sourced funding for their business
- Over a third of businesses see cloud hosting as the number one digital innovation to drive their online business, followed by social integration and mobile
“The online explosion may have removed many of the traditional barriers to entry for start-ups, but it’s clear they still need solid advice and the right capital partners to get their ideas off the ground,” observed Oskar Miel, managing partner of Rakuten FinTech Fund.