Fail Fast, Fail Often
In the startup world, failure is often associated with a necessary step towards success. Failing is not only needed to achieve success, it’s actually something startup founders will benefit from, according to popular belief.
Although failure is part of a learning process, is it really necessary? Making mistakes is definitely something you will go through, especially as a first-time founder. However, seeking to make mistakes to learn is a non-sense process that unfortunately seems to be the normality.
Here below we go through 10 common mistakes startup founders do and that you don’t have to repeat.
1. Building Something No One Needs
Startup founders are often blinded by their ideas. They create a product or a service they believe people will buy or need. Often though, that’s not the case. It can be that the product or service does fall into a category or industry where eventually there is a need for that idea, but the form of it is just not the right one.
Market research is extremely important in the first steps while building a business. Not only a traditional research is needed, potential customers interviews are also important. Understanding where your product or service fits in your potential paying user mind is crucial.
On top of research, start by building an MVP to test the waters with those users. Don’t commit too much to a product that might not be the right one. Especially when trying to disrupt an industry, make sure your vision doesn’t collide with the reality of what your target users are used to or really need.
TIP: Listen to your potential customers before building anything big.
2. Listening To The Wrong People And Not To The Right Ones
Mentoring while building a startup becomes fundamental especially when startup founders are in front of difficult decisions. Having someone that can help can result in quick and easier solutions. Unfortunately, the startup world has been in a hype for quite sometimes now, and as such has attracted a number of people that label themselves as mentors, but have no startup experience.
I am not saying that you should just seek advises by other startup founders. If you can access also professionals in different industries and roles, take advantage of them. However, bear in mind that if someone hasn’t experienced the startup life, she cannot understand some basic concepts of how startups operate.
TIP: Choose wisely the people you surround yourself with, but once you do, accept advises.
3. Planning Without Cash In Mind Or With No Clear Business Model
Cash is king in the startup world. In the early days, the burn rate of a startup is always a major concern for founders (and investors).
Having the ability to raise enough money to reach a stable level of profitability is not an easy task. Startups are often faced with a cash dilemma because most founders don’t have a clear business model in mind or don’t know how much they need to stay afloat.
TIP: Make basic use of a cash-flow statement to keep track of expenses and think of a business model before starting anything.
4. Failing To Plan
There’s no need to create a 40 pages business plan, however, a basic strategic plan is needed to clear your head and write down ideas. Unfortunately, most startup founders who haven’t yet identified a business model for their business will also fail at creating a basic plan to follow.
Of course, plans do change. Especially in the startup world. However, this doesn’t mean that you shouldn’t write down some basic strategies you might want to follow in the mid-term. Failing to plan is planning to fail.
TIP: Work on a basic plan and keep it alive as your startup grows.
5. Thinking That Funding Is The Answer To All Problems
As stated earlier, cash is definitely important in the startup world, but is it everything startup founders should chase? If you start a business with the idea of raising money to succeed (and eventually run away after you sell the business), you need to re-think the whole structure of your plan.
Although it’s never been easier to raise funds, startup founders should think twice before onboarding investors (of all sizes) in their business. Unless it’s family and friends and they will let you operate in peace, the moment you add an external investor, a new layer of noise will be added to your daily routine.
Meetings to discuss progress, interferences in the daily operation and potentially also in planning. All this, and much more is not something you need in the early stage of your startup life.
TIP: Money is something you need, but not the only thing to look for.
6. Starting A Startup For The Wrong Reasons
When I founded my own startup I was driven by several sentiments, one of which was, making the big exit and get rich. It seemed reasonable at the time. However, after closing down, I realized how that simple thought had created a shaky base for my success.
Entrepreneurship is a long game. Even if your company gets acquired, you still have to spend a few years working for the company that has acquired your business. Dreaming the big exit from the beginning will create unreasonable expectations for yourself and your company.
TIP: You need something meaningful to stay motivated for the long-run. Otherwise, one day, you will just give up because you will lose the motivation.
7. Relying On Possibilities
Startup founders need to understand that they are the only one in control of their success. “If only” statements can lead to failure very quickly, especially when you start to rely on these too often. Be it for an important deal, be it for a round of investment.
You are the one that makes things happen and often time without the help of anyone else. Having the right mentality when starting a new business is crucial for success. If you don’t succeed, at least, you will be the only responsible for it, and won’t blame anyone or anything else.
TIP: Get real and focus on things you can change. Don’t rely on people or possibilities. You are the only one that can make things happen.
8. Not Being Ready To Sell
Let’s be honest, if you start a business and you are not ready to hit the street and go sell your product, then you will fail. No one else will sell your product for you. If you think you can just hire a sales rep to sell whatever product or service you are building, you are dreaming.
I have met quite a lot of times, the so-called “technical founders” who were able to raise the first amount of cash (because investors love tech founders) but weren’t able to articulate what they were working on to anyone around them.
You can have a fantastic product or idea, but if you don’t get out and talk with people about it in a proper way, no one will ever buy it.
TIP: Always Be Selling (ABS) – Otherwise, you will die.
9. Partnering With The Wrong People
Partners are fundamental to your startup journey. Whether we are talking about your co-founder(s) or a VC. Understanding who you will partner with is going to be a critical step towards your startup success.
Having a co-founder that is not as motivated as you are, will lead to misunderstanding and issues when the waters get rough. Having a VC on board who doesn’t understand your business will lead to problems when you will be faced with common issues in your industry.
TIP: As for mentors, choose wisely before getting into a partnership with someone. Those partners are potentially for life.
10. Not Having The Right Balance
Having a startup is a 24/7 job. Holidays in the first couple of years are a dream, most of the time. As a startup founder, you are expected to be involved in it day and night with no break. However, not having a good routine between your work and private life will actually result in the opposite results.
It is very easy to feel dragged into the everyday work and forget about the rest, about your health and family. Having a balance in your life will also help you be more focused on each activity you start. Nervous breakdowns and physical fatigue due to overwork is often too common in the startup world. You don’t need to get there to achieve success.
TIP: Take the time to invest in yourself and your company. Don’t let yourself go, as the company relies on you.
Is there any other basic mistake startup founders do while building their dream? Would you have any advice for other founders who are starting their own business? Let us know in the comment section below.