Serverless computing allows developers to concentrate on application logic while delegating infrastructure provisioning, scaling, and maintenance to cloud providers. This architecture reduces operational overhead, enables automatic scalability, and shortens time-to-market, making it attractive for both greenfield development and legacy system migration. While existing research has examined technical aspects such as performance and orchestration, there remains limited empirical understanding of the motivations behind serverless adoption, the practical challenges it introduces, and how these challenges are managed in real-world settings. To bridge this gap, we applied Socio-Technical Grounded Theory (STGT) to analyze 37 practitioner-authored blog posts and 18 semi-structured interviews conducted with serverless professionals from diverse roles and industry domains. Our findings reveal five key motivations for adopting serverless computing (e.g., operational efficiency, developer productivity), seven categories of challenges (e.g., architectural constraints, testing complexity, and organizational skill gaps), and a comprehensive set of mitigation strategies across architecture, DevOps practices, cost management, and developer training. These insights provide practical guidance for organizations adopting serverless architectures and contribute to a deeper understanding of the socio-technical dynamics involved in cloud-native software development.