Challenges Cambodian Startups Face when Scaling up their Operations

Abstract

The startup phase marks the beginning of a firm's journey, paving the way for growth and expansion. As it progresses, a startup has the potential to transform into a thriving corporation, generating substantial revenue, creating well-paid job opportunities, and contributing to tax revenues. This study aims to investigate the various challenges faced by startup enterprises during the expansion of their operations. To achieve this objective, a qualitative approach was adopted, utilizing interviews as the primary method of data collection. The data was gathered from startup enterprises based in Phnom Penh, Cambodia. The research revealed a multitude of internal and external obstacles associated with scaling a startup enterprise in Cambodia. Internally, constraints such as limitations in accessing capital, staffing issues, and client acquisition hurdles were observed. Additionally, the research highlighted fierce competition in the market, particularly for technology-focused businesses, because entry barriers are relatively low and switching costs are low. Additionally, the study identified regulatory hurdles as external factors limiting the expansion potential of startup enterprises. Moreover, the survey highlighted disparities in the obstacles faced by B2B and B2C organizations. This study significantly contributes to the existing body of literature on startup scaling, laying the groundwork for future researchers to explore other challenges associated with expansion. Furthermore, it provides entrepreneurs with valuable insights into the obstacles they may encounter within their specific client niche.