What Are the Barriers to Growth?

Successful companies care as much about what blocks sustainable margins as what creates them.

Are

What blocks business growth

Outside forces (mostly beyond your control):

  • A crowded market: too many competitors chasing the same customers, which pushes prices down and drives up what it costs to win each one.
  • Customers who hold the power: when a handful of big buyers, or highly price-sensitive ones, can dictate terms and cap what you can charge.
  • Suppliers or platforms that hold the power: when the vendors or platforms you depend on take the margin, or can change the rules on you overnight.
  • Barriers to entry: if your edge is easy to replicate, fast-followers pile in and erode it. Recent advances in AI/LLM software development tooling have nearly eliminated the cost-resource barrier for fast-follower copycats of software-only solutions.
  • A different way to solve the same problem: customers meeting the same need with an alternative (chat instead of email, video calls instead of travel).
  • Shifts you can’t control: interest rates, the funding climate, AI/LLMs, and data regulation, or a platform quietly changing its policy.

Internal frictions (within your control, and often the real problem for startups):

  • Weak product-market fit: the number one startup killer; growth spend poured into a leaky bucket. AI/LLM coding tools have spawned a massive “vibe-coder” community who are creating products and seeking investor financing before they do any product-market fit due-diligence.
  • Broken unit/customer economics: it costs more to win a customer than they’re worth, margins are negative, or payback takes longer than your runway (Homejoy, MoviePass).
  • Scaling too early: hiring, expanding, or spending ahead of a repeatable, proven motion.
  • Talent concentration: critical knowledge trapped in a few people who can walk out the door.
  • Too little fuel, or too much: under-capitalization stalls you; over-capitalization hides a broken model until it’s expensive (WeWork).
  • Refusing to diagnose honestly: Boardman, Shapiro & Vining call the honest-assessment step the “fulcrum,” and note it’s exactly where teams are most likely to fall off. Many startups never name their real constraint.

Related drivers: Products and Business processes.

Working with Authgnosis

Authgnosis is my AI-native business growth consulting practice.

I’ve turned the Six Drivers framework into a Growth Diagnostic Checklist: a section-by-section guide covering all six drivers plus the talent layer and a “Fulcrum” assessment.

It’s the prerequisite information I need to map a company’s current state, desired future state, and co-create a growth strategy that identifies the one or two moves that will move your growth needle fastest.

Get the Authgnosis Growth Diagnostic Checklist

The full section-by-section diagnostic, free. If you would like this analysis applied to your business, that is my Strategic Growth Plan engagement.

Send me the free Growth Diagnostic Checklist


Sources: Boardman, Shapiro & Vining (2004), JSME 1(2); Andrew von Nordenflycht (2010); Canadian funding per SR&ED (Budget 2025) and NRC-IRAP (2025–26).

Post FAQ

Are external or internal barriers more likely to kill a startup?

Almost always internal. Markets rarely kill early companies; weak product-market fit, broken economics, and premature scaling do. External forces set the difficulty of the game, but internal frictions decide the outcome.

How do you tell a real constraint from a symptom?

Symptoms are plural and visible (slow sales, churn, rising burn); the real constraint is the single upstream cause that, once fixed, resolves several of them at once. Naming that one thing is the ‘fulcrum’ step most teams instinctively avoid.