To be an entrepreneur, is no easy task. You leave the comfort of your 9 to 5 and venture to a world of startups where the stakes are high. You have no fixed salary and every day you have to put your all in without getting the chance to see the results up-front.
Well, if you are an entrepreneur, your only goal should be progress.
And, guess what?
You don’t want your progress beaten down by some mistakes you had no idea about. Heck, your entire small business can get ruined by just one action or omission!
They say, prevention is better than cure. That’s why here are the top 70 mistakes that most startups make. It is a mega list as it comprises almost all the mistakes possible under the sun as forecasted by 75+ small business owners and startup founders.
Some of them here are even serial entrepreneurs who have tried their hands at several startups.
The thing about mistakes is that they come in various forms – they can be hiring mistakes, paying mistakes, company culture mistake or a mistake regarding where a company’s focus should be. A hirer may consider himself to be superhuman as said by Fabienne Raphael (mistake #48) and not want to delegate any task or one may build his company to revolve around one of his most efficient or trustworthy employee (mistake #69)
- But, before you get into this, it’s better you first know your dominant entrepreneurship traits and how it may affect your startup so that you are better able to handle adverse situations, come what may.
So, What Mistake Are You Making?
Be sure to scan through this article and make sure that you are not making one (or more) of the mistakes mentioned here!
1. Waiting to invest in HR until there’s a major problem – Having a strong HR practice can help prevent issues and by the time something large flares up there are likely dozens of small things that are making it hard to hire and retain employees, as well as grow efficiently.
2. Not focusing on building a diverse and inclusive work environment – The value of diversity compounds of time, so the earlier a company puts purposeful thought into it the better. It’s much easier to establish strong policies and good communication practices than it is to fix a toxic culture.
3. Hiring for technical skills over interpersonal ones – Many studies show that “soft” skills such as communication, empathy, and collaboration are the qualities of top-tier employees (especially managers), yet startups rarely hire with those skills specifically in mind. Thinking deeply about what you want in your future leadership, as well as what skills can be learned and which tend to be more organic, can be very useful.
4. Thinking more deeply about hiring than retention – According to Lucia Smith, an HR Consultant at Gray Scalable, startups are often 100% focused on getting in the “best team possible” at their fragile early stages, but then fail to consider how to keep star employees once they’re hired (assuming, often erroneously, that the excitement of just being at a startup will be enough). Putting intentional thought into your physical work environment, compensation and promotion practices, training, etc. makes sure that all the effort that went into hiring is not wasted through high attrition.
5. Not having clearly defined roles – It’s very typical in startup culture that everyone wears multiple hats. When you need to lean on the ground with hiring, it’s expected that everyone will jump in and get done what needs doing. While it’s important to communicate that one crew mentality, it’s also important that everyone has clearly defined roles. This will make it easier to differentiate and split responsibilities as your business starts to grow and your team expands.
6. Hiring for excellence, not for cultural fit – When growing a business, you want the best of the best. Fred Schebesta, co-founder and CEO of finder.com learnt the hard way that excellence in a candidate wouldn’t always translate into excelling at finder. When people aren’t a right fit for a company, they don’t produce their best work.
The effects of this will be felt throughout the business. Similarly, when you hire the right person, they will go out of their way to excel and this will pump the whole team up. Work out what qualities will be the best fit for your business and look for these over accomplishments.
7. Not having a clear vision or not setting one in the first place – Setting your startup’s vision may seem like the least important thing when you’re trying to build the business, but it’s important that everyone you get on board in the early days understands what you are trying to create. When the vision is clear, everyone has a good understanding of what needs to happen and will be more productive and motivated to excel.
Related Post: How to Create Your Own Vision and Mission Statements: An In-Depth Guide
8. Product/website development always takes more time than you think it will – Actually, everything takes more time than you think it will. Factor that in, then factor in some more. If you can, hire a project manager early on.
9. Focusing just on growth – You should not do that. Whitney Meers of hackernoon.com feels that instead you should focus on sustainable growth. This doesn’t only mean sales (although sales are very important) — this means investing in the right software infrastructure, figuring out where you can cut costs, hiring great talent, paying your employees well and respecting their boundaries.
10. Placing unrealistic output expectations on your team unless you want the type of quality that will make people cringe – If you do that, you will just end up frustrating them and causing them to leave your startup. This is a huge talent drain. Don’t do that. Make sure everyone knows what they are expected to do. Appreciate their efforts and make them want to improve more and more but don’t put impossible or super hard objectives on them. Keep the work environment and the pay of your team in consideration with your expectations.
11. Executing on any new initiative without both a strategy, an internal champion of that initiative, and a Plan B – After all, if it fails, what are you going to rely on? What is going to save your startup from bankruptcy or more importantly, what is going to ensure your bills are paid? James Allsopp, CEO of iNet Ventures suggests that you should have a strong plan in place before launching and to consider moving forwards in ‘phases’. Many have an instant idea but don’t quite now how to execute it properly – thought is needed before rushing forwards.
12. Don’t try to complete all the tasks on your own – Learn to delegate. Keep the 80/20 principle in mind and try to focus on that stuff that you need to be doing the most. Delegate all the non-essential stuff to others. This will also help you keep your productivity up – a must for all startup owners.
13. Not seeking qualified professional assistance – We’ve become a society of “I want it now” do-it-yourselfers. Online services like Nolo and Legal Zoom, and even over-the-counter filings at Secretary of State offices have made it incredibly easy to set up an LLC or corporation. But every tool has a purpose and function, and not knowing the purpose and function of each type of business entity can have devastating results.
That can range from a simple unexpected annual tax of a few hundred to several hundred dollars, to nearly $5,000 in IRS penalties for husband-wife LLCs that didn’t realize they need to file a partnership return, to thousands of dollars in overpaid taxes from holding capital assets in a C corporation. Good legal and tax advisors can help avoid these problems and more and should provide a return on investment as a startup business launches and grows.
If you have to delegate legal or financial work to professionals, you need to learn about a document called power of attorney.
14. Believing the marketing mantra of large software companies – As good as computer applications and artificial intelligence have become, a $60 off-the-shelf or downloadable computer program will not make you a tax or accounting expert and will not be able to interpret all the nuances of 76,000 pages of U.S. tax code and regulations and factor a business owner’s goals, objectives, and needs into the mix.
A $15 per month online accounting program will not teach the difference between an asset and an expense or between taxable net profit and cash flow. Bill Bourbonnais feels a qualified tax pro / accountant can help steer new entrepreneurs clear of these pitfalls and help benchmark and position a new venture for growth.
15. A big mistake many startups make is taking on investors too quick – There most definitely is a good and bad time to take on investors. And taking them on too early, particularly before you have tested any sort of MVP (minimum viable product) can hurt your startup, says Vivek Chugh of Listables. The reason this can be bad is, if you convince investors you have a good idea and have to spend their money figuring out the easiest way to make that idea work and on the initial mistakes you most undoubtedly will make, you will go through that money quick and need more investment.
The best way to avoid this is to build out an MVP and test the market. Try and get your product or service out there a little and see if there is a market for it, figure out your initial business model, what of the 7 marketing functions work and what doesn’t. If you do these things before the initial investment you will go much further. Also, ensure that you take up the Porter’s Five Forces Analysis beforehand!
16. Startups built on the best idea in the world will still fail with the wrong revenue model – Jon Nastor of Hack the Entrepreneur believes that recurring revenue is one of the most consistent forms of monetization your startup can achieve – without it you can find yourself dead in the water. Yes, some businesses and markets will be harder to see a recurring model, but it is your job as a savvy entrepreneur, to do so. If you are looking to attract venture capital, it is essential that you develop a predictable and recurring revenue stream. Failing to find a recurring revenue model has been and will continue to be the death of many great ideas and startups.
Related Read: How to Choose the Right Revenue Model for Your Business
17. One of the biggest mistakes startups make is underestimating how long sales take – When you’re planning your business idea, you’ll often do some kind of financial forecast for the future to give you an idea of how much you should be bringing in. Many businesses often overestimate the number of sales they’ll get as they assume it’s a very simple process.
The truth is that sales take time and they take even longer when dealing with B2B clients.
Not only do customers have hundreds of excuses and reasons as to why they won’t buy a product, but if you offer a subscription service then remember they can cancel at any time. This means that when you’re forecasting your sales figures be sure to account for a longer sales process and the possibility of losing some subscribers over time. Alexander Winston, Managing Director of PPC Protect feels that not only will these forecasts be more accurate, but it will also help you handle your expectations a lot better.
18. Not following the numbers– It is easy to get caught up in the dream especially if you are making incredible cash flow and creating more sales than you thought possible but make sure you are working from the perspective of both profitability and growth. Depending on your business, sometimes you can be more profitable making fewer sales than just having the highest possible sales.
19. Not Doing your own bookkeeping – Katie DeCicco recommends you learn Quickbooks online. Their staff will teach you how to set up your accounts. Keep track of your expenses. Negotiate better rates on merchant processing fees, bank fees, credit card interest rates and suppliers. New businesses have a target on their back and some companies are looking for you, to take advantage of your inexperience. Get yourself an amazing accountant who can teach you what to look for in a Profit & Loss Report and the Balance Sheet. You want an accountant that can also help you follow a budget. These are critical tools to the success of your business.
20. One of the biggest mistake startups make is that they fail to raise the capital required to develop their idea – This could be because the person in charge of raising money isn’t good at it. But more commonly, it’s because the idea isn’t a good investment for Venture Capitalists (VCs) given how the VC business model works. Know that a business can be a good idea that will one day be a big business worth $50 or $100 million, but that doesn’t necessarily mean it’s a good investment for a VC.
Related Read: How to Get Funds for Your Startup in India
Given the number of their investments that end up being worth nothing, they need the companies they invest in to have a possibility of being very big (greater than $1 billion is a common yardstick), and it has to happen in a short amount of time (7 to 10 years). That means that a business that could have been worth $100 million and solved an important problem doesn’t get built because they weren’t able to raise money because it’s not a good fit for VC money.
To give an example, if you raised $10 million for an ‘A’ round and sold 20% of your company, that assumes that the company is worth $50 million. If you sell the company for $50 million after that, or even $100 million, the VC made no money, or $10 million, respectively. Either of those outcomes aren’t considered success by a VC fund because they want to get a 20% return on a fund that might be $500 million or a billion dollars.
Given the risk they took to invest in your business, they needed a larger return. The lesson is that if you’re pursuing a business that won’t yield the types of returns for investors that VC’s need, you have to build the business in a way that doesn’t rely on VC money.
In fact, Jordan Wan of CloserIQ shares how he built his company without VC funding:
“I’d like to offer a unique perspective on why we chose to “consult-strap” our startup instead of relying on VC funding.
Bootstrapping was a competitive advantage as it forced us to prioritize and remain scrappy. For the first 6 months, we even shared the same gmail account to save money and make conversations more transparent.
But before we could launch, we decided to “consult-strap” to provide the necessary funding. My cofounder and I worked as consultants to cover our living expenses and we spent the rest of our time building our company. We made sure to target consulting opportunities that had synergies with our company. Many of those consulting clients actually turned into our first customers.
Since then we’ve grown from 2 people moonlighting to 20 employees now helping hundreds of top startups in NYC find sales talent.”
The company might not solve a problem that is important enough for customers to pay as much money for as the company needs to build a profitable business model. Usually the cost of acquiring a customer is higher than the customer is worth to the company. You can avoid this problem by having a complete understanding of what it costs to let someone know your product exists, getting them to buy it, and setting them up.
You also need to understand how long they’ll stay your customer and keep paying you. That way you’ll know how much it was worth to your business to have the relationship on a net perspective. In other words, you have to understand your cost of customer acquisition, churn rate and price to get to a lifetime value of the customer.
Even if the startup is solving a problem that people would pay for, it might not be important enough to those prospective customers that they actually end up purchasing it. When you want to build a startup, you need to do research and speak with your prospective customers.
Ask them if they would like the product and if they would pay a certain price for it in a few months when it’s built. Try to get a verbal commitment that the prospect will purchase, or get contracts signed saying they will buy it if you build it. To have a startup that doesn’t fail by running out of money, you have to make sure you don’t make any of these critical mistakes.
22. Steven Benson of Badger Maps feels that a huge mistake that a lot of people make, is thinking that they can get the word out about their product before they really have a product that is good enough to use. It’s just fine to get feedback about your product and to reach out to prospective users for that purpose. But before you scale on the marketing side, focus on getting the product to a point that when people see it they will really want it. It’s a waste of time trying to paddle across a river when your boat is full of holes.
23. Focusing their sales and marketing message on the innovative features or business model they have – These days any innovative features, benefits or business model is going to be quickly copied. Startups that succeed in spite of copycat competition and incumbent attention are the ones that create a strong brand by selling a new philosophy and ideology about how their customers should achieve their goals. Chris Monk of Persuadem cites a great example, which is Hubspot who didn’t sell their software platform but instead sold a new way of selling – inbound marketing.
24. Hiring too quickly – This is the quickest way to burn investors’ cash. Everyone is obsessed with growing quickly so they can exit, but if you’re not profitable, then you need to spend wisely. According to Chris Taylor of Evergreen Outreach, as you grow and eventually become profitable you can hire along with the growth, not ahead of the (potential) growth.
25. Taking too long to launch because you want everything “perfect” – There is no such thing, and according to Heidi McBain often once people launch their business, they often realize that so much of running a business, you learn on the job.
26. Not having a targeting plan – Who’s your demographic and how are you going to get their attention? That’s the mistake Rosie Faulkner’s web development business, Nosey Marketing made.
This is very important. You must decide on your business niche and know who your target customers are before you embark on your startup. Not having a definite plan or strategy in place can lead you to swinging blindly on a hit or miss basis.
27. One mistake that can truly harm a startup is not incorporating or forming an LLC for your business – When a business incorporates, nearly every entity (outside of a sole proprietorship) provides the company with liability protection and separates professional assets from personal ones. Deborah Sweeney, CEO, MyCorporation.com says that if the business goes under suddenly and isn’t incorporated, your personal assets like houses and cars could be in serious jeopardy. While there are several business structures and it depends on the country, you’re in, incorporating your business is a must!
28. Falling in love with bad ideas, just because they’re your ideas – Startups assume people will rush out to buy their new product or service. They rationalize all the reasons why people might buy, instead of finding out if people actually will.
You need to road-test your idea. You can’t just assume that hypothetical people would want it. You can’t just ask family or friends if it’s a good idea. You can’t ask them if they would buy it. They may say yes, but then not buy it later. Or your family and friends might buy it but no one else will.
We’ve seen otherwise very smart people invest tons of money and time into products, websites and infrastructure without doing very simple things to prove that the idea is a good investment. It’s possible to love your own idea so much that you make decisions not in your own best interest. You need objectivity and perspective to avoid wasting money and time.
The real test is if strangers who’ve never heard of it, or you, will buy it from you. Will they click on an ad and buy it, given just the info you can get them online?
What Brian Carter hasfound in hundreds of online ecommerce tests is that, buyer behavior can be quite strange. Sometimes ugly websites sell. People may not buy your altruistic product even though they profess to be altruistic. It isn’t always known why people buy. You can’t necessarily reverse engineer it.
It may only cost you a few hundred dollars to throw up a simple website and run some ads to see if people are interested. If less than 1.0% of your ideal customer target clicks through on the ads, there’s not much interest.
You can even create a lead form telling people to sign up to hear about the product when it’s available. If people won’t fill it out at a 3-5% conversion rate, then it’s not that interesting to people.
This gives you some benchmarks and a way to market test your idea before sinking tons of money and time into what might turn out to be a lemon.
29. Startups tend to fall in love with their original concept, and fail to adapt when the market tells them that their original concept is flawed – Mike Grossman CEO, GoodHire says that it’s important to not confuse the business model with the business. The goal is to make the business succeed, and sometimes (often) that requires revising the business model.
30. Spending too much money – Startups also tend to spend too much money. Try to be very conservative in how money is spent. Many expenses are discretionary, and not truly necessary. Of course, it depends on the type of business. A retail store is forced to spend a lot of money up front. But a software company needs to focus first on achieving product-market fit.
31. Focusing on Paid Advertising instead of Organic Growth– There are a lot of startups in the virtual world. Whenever we start a business, no matter its offline or online, getting our first few leads and sales makes up feel very motivated. Same happens with Startups, especially those who are related to virtual world. In the very start, they do have some budget which they spend up at Social Media Marketing a platforms like Facebook, Twitter etc. or at other Advertising platforms.
This helps them to get a few leads as well.
But sometimes, many startups start spending a lot of bucks on advertising that they do not give any attention to organic growth. For e.g. It is seen that Most of startups spend money at Social media marketing but a very few spend money on Search engine optimization which can boost their growth.
Sahil Sharma of Blogging Surgery considers this to be a problem especially for those businesses whose business model is not recurring revenue model. Because spending money for customer acquisition is not much useful for them in the starting time. Hence, if you are a startup owner, you should always look for organic growth business hacks. This will help you in long run.
Jonathan Marsh, Owner of Home Helpers of Bradentonshares a quote on this point:
DO NOT make the mistake of dumping a lot of money into advertising that may not provide any value to your business. I recommend that a new small business owner do the following:
· Establish a budget.
· Do research on what types of advertising are most effective for your type of business. For example, you may ask owners of similar businesses about their experiences.
· Look at multiple advertising opportunities that fit within the budget. Ask specific questions and ask for evidence of success with their advertising (best case scenario is performance of ads that are at least related to your industry). If they can’t or are unwilling to answer your questions, a red flag should pop up in your mind. Remember…this is YOUR money.
32. Underestimating the power of networking – The most important lesson Lori Cheek has learnt in networking is to take every advantage possible to meet new people; Efficiently communicating and never dismissing a single soul– you never know who you’re talking to, who they might know or how they’d be able to contribute. Here’s what she says –
“When attending networking events, I find that it’s most advantageous to go alone so that you’re forced to talk to new people. I find it wise to do your homework, in advance, and if the attendee list is publicized, to go ahead and make note of those you’d like to meet before the event. Lastly, is to understand everyone is there for a similar reason and for the most part want to make new connections, so don’t be shy; just walk up and introduce yourself– the only thing you have to lose is an opportunity.
Making real life connections (just like my business idea) has been the most helpful tool in helping Cheekd grow. In the world of business and networking, I recommend that you never ever leave home without your most essential “old school” networking tool– your business (or calling) card. Even in the crux of the digital age, business cards are thriving for a reason– it’s still the single fastest way to share who you are, what you do and how you can be contacted.”
Use social media to increase your contacts. In fact, I have a mega-guide on how to use Twitter for business and I highly recommend you check it out. If Instagram is your thing, here’s an article to boost your Instagram follower count in just 5 minutes a day.
33. Failure to ensure their intellectual property is protected or even protectable – After all the time and resources are poured into a brand, conflict with a confusingly similar brand may result in a costly rebrand. Further, as a startup evolves, the departure of key personnel, or tensions between employees, can expose gaps in IP ownership, such as trade secrets and inventive material.
Lyle Gravatt of Forrest Firm finds branding to be an important differentiator – unique brand names should consider registering their brand as a trademark, if available. Running a clearance search to determine if the name is already being used is a helpful first step. Although certain “common law” trademark rights exist by simply using the brand name commercially, registering a trademark affords enhanced protections and best prepares the owner for scalability and expansion.
Related Read: How to Register Trademarks for Your Business in India
Like trademarks, a limited form of copyright protection is extended to an author of an original work when the work is created. Registering a copyright is fairly cheap and easy, but the fees can add up if you register every photo, drawing or piece of literature that is created, so it’s best to consider what works are most likely to be copied or mimicked and simply register those.
Note that a copyright is owned by the author, not the business employing the author. For this reason, and to protect any trade secrets or patentable material being created in the salon, employees should all be required to sign an Employee Agreement upon being hired that assigns ownership of any workplace product to the employer. For employees already on the books, the business must offer some form of compensation to sign a new or updated Employee Agreement, otherwise it could be void.
Lastly, trade secrets and patents: The Employee Agreement would also try to ensure that any specialized techniques, products, customer lists or other proprietary information be kept confidential. Should any techniques or products be created that have commercial potential, a patent application should be considered before the technique or product is used in a commercial or public manner, so as to preserve the right to file a patent (U.S. allows the patent application to be filed within 1 year of the first public disclosure, but most other countries and regions do not have this ‘grace period’).
Grainne Kelly Founder of BubbleBum shares a similar mistake that she did by not protecting her intellectual property.
“The biggest mistake I ever made was expecting that others would have the same degree of integrity as I do. I visited a Chinese factory with my original design and did not ask them to sign the confidentiality agreement before sharing my design. While I was sitting in their office, the Managing Director drove to Shanghai, 3 hrs away, and applied for a utility patent. Now, I don’t talk to anyone about anything without first signing a confidentiality agreement. It has cost us $10’s of thousands, but I have learned so much about Intellectual Property along the way.”
34. Not spending time pinpointing your target market before getting your business up and running – The toughest business lesson Ross Cohen, co-founder of BeenVerified.com learned was: don’t spend years developing a product that doesn’t have a distinct customer base. I wish someone had given us that advice earlier, but maybe it’s one of those things you have to learn yourself. You have to feel the pain before you appreciate it. It was difficult to pinpoint our market, as we knew we would never make money off the job seeker. Instead, we went after the broader consumer market.
- Get a Free and Exclusive Graphical Checklist of this Post in your Inbox! Don’t Miss Out!
- How to Invest or Start a Business in India: 2020 Edition
35. Depending on anyone else to make your business a success – No one gives a damn about your business except you and only you. If you want to depend on someone to make your business a success, it should be just you. Depending on someone else to make your business a success is just a one-way route to failure.
36. Getting in full-time into your business – Bill Fish, Co-Founder of Tuck.com advises that if you are bootstrapping a business, do it as a side hustle. He has seen more businesses than he can count fail because the founder was relying on any revenue to act as a salary of sorts to pay living expenses.
He was fortunate enough to start his first business on the side for one full year before his partner and he decided to go full time and take a penny out of the business. Doing so resulted in capital in the bank that gave the business room to breathe and afforded them the ability to make some strategic investments that resulted in huge successes down the road. With the explosion of the internet over the last 20 years there are plenty of opportunities out there, but many things don’t shake out either, so to test the waters with a side hustle first, it is a great way to dip your toe in the water to see what works.
37. Failing to Prepare for Rainy Days – A common mistake that many start-ups make is not accommodating for the fluctuating levels of clients and your market more generally. This means that quiet periods can become a real threat to your business’ survival, even if you were thriving six months ago. A way to combat this issue might be to create upselling strategies to ensure your company has a continuous income.
Here at Strafe, Ross Davies and the team sell monthly retainers to our clients, from hosting and maintenance fees, to conversion analysis and split testing. This creates a steady income, covering all overhead costs of the company, allowing new sales and spikes to be a luxury rather than a necessity.
38. Having a Bad Website – Another mistake is not having an effective website. During the early stages of operation, many businesses make the key mistake of not utilizing their website or tailoring it to their clients’ requests. Many websites are just a digital version of a printed document, such as a brochure.
These websites are just information platforms, but they have the potential to be of much more value than this. To utilize your website, it should have a goal that it aims to fulfill, whether that be gathering information from your customers or increasing your levels of business. You can design it to interact with users, increase conversion rates, and improve your company’s credibility.
Your website can also help spread awareness of your company or bring through better quality leads. To achieve your goals, you need to bear in mind the avenues through which you want to achieve them. Be it through an online form, email, telephone or booking an appointment, how you want your clients to fulfill your goals will direct your website design. You’ll need to bear this in mind when designing and building your website, to ensure that you get the best interaction with your clients.
39. Not Tracking Financials – Kean Graham of MonetizeMore says that many founders make this mistake early on. As a result, they don’t know their cash flow position, monthly net income and total runway. This causes them to make bad decisions because they don’t have the proper numbers.
40. No Partner Agreement – Many founders assume the partnership will go great because things are good now. Partnerships tend to hit periods of turmoil and agreements are necessary to resolve disagreements. Without a proper contract (that follows the essentials of contract drafting), disagreements tend to spiral and sometimes take down the whole company.
41. Going to market Too Soon – Most companies spend 12-30 months on product development before launching a business and become too close to the product to realize that YOU cannot stipulate when a product is ready….the users/customers tell you with their data whether the product is ready to scale. Andrew Miller can’t count the number of times a founder has said to him “we’ve spent three years building this thing, it’s better than ever, so it’s ready” and that is a huge mistake. The users say when it’s ready, the conversion and retention numbers tell you when the product is ready. It’s more important to have a airtight product than to have first mover advantage.
42. Spending too little money on employees – According to The Alternative Board’s Survey, 20% of business owners say they would have spent more money on employees when launching their business. However, since it is 20%, let’s take a deeper look at it. The thing is as a startup, you are going to always lose your staff if you try to pay your staff the highest. The reason is that as a startup, your funds are low and there is always going to be multinational billion-dollar industries who are going to pay better than your startup.
Then what should you do?
Well, Peter Thiel in his #1 NYT bestseller book “Zero to One” says that you should offer shares of your company to the early joiners. This will make them stay for the betterment of the company and only those will take the job who are interested to stay with the company in the long run and also believe in the startup. I am sure, you are looking for these kinds of people for your startup as it is. As such, this looks like the best choice. For more info, read the book since determining how much share you should give to your employees is a difficult task.
43. The worst startups assume they have correctly understood the customer’s needs and build the product accordingly – They take the “well, it worked for Steve Jobs” approach, which, by the way, is not actually how Steve Jobs approached design. The amount of user testing that Apple did with Steve at the helm is incredible. The best startups know that the first product is completely wrong. The key is that they build it quickly and cheaply so that they can put it in front of the customer to figure out in WHICH way they were wrong. Data from actual users is worth infinitely more than the best logic and designs. The best articulation of this idea and approach can be found in the teachings of Steve Blank and Luis Perez-Breva. To avoid this mistake, the design thinking strategy can work best.
Related Read: How Data Analytics can Help Boost Your Startup
44. Forgetting to solve for risk by solving for engineering – The best startups figure out what’s most likely to kill the startup and solve for that first. It’s similar to the director of the OK Go Rube Goldberg video described arranging the pieces so that the pieces that were most likely to fail were put first so that if they failed the team wouldn’t have to spend a ton of time setting the machine up again. Often that looks like building product instead of trying to sell to customers. They do that not because there’s true risk in the technology but because that’s where they are most comfortable.
The truth of the matter is that a good engineering team can code just about any product that the customer needs (assuming time and dollars). But the same can’t be true for the risk of customer acquisition. What if the customer doesn’t want to go through the journey? What if reaching them is too expensive? What if the sales process doesn’t work? If nobody wants to buy, even Steve Jobs couldn’t fix that problem with all of the time and dollars in the world. Market risk is much bigger than product engineering risk, but so many teams make the mistake of solving for product risk first.
45. Relying on hacks – Giuseppe Frustaci of Stick Shift Driving Academy believes that teams are often in search of the quick fix. But whether it’s marketing, customer service, hiring, product design, or just about anything else, hacks, tips, and tricks never deliver. The best performing growth hacks that I’ve seen actually took a lot of thought, planning, and work to get off of the ground. Every marketing strategy that I’ve implemented that lead to explosive growth took at least a month if not two to devise and implement. (Tips by Giuseppe Frustaci of Stick Shift Driving Academy)
46. Underestimating personal growing pains – Andrew Blackmon co-founder of The Black Tux, admits that he has had to considerably grow personally to perform well in his role, especially over the last two year. He was overconfident about how it would be to make tough decisions, give feedback and hire people at the right time. Yet patience, reflection and talking with a leadership coach have been very helpful.
47. Trying to be everything to everyone – A product or service is never going to be the right fit for everyone, and thus picking a target audience is crucial. Too often, startup founders want to boil the ocean all at once. According to Sam Warren, Director of Marketing at RankPay, success is much more likely if a startup focuses on solving one, very specific problem. Growth into other markets and solutions can happen later!
48. Thinking you can do it all on your own – When starting, entrepreneurs have a tendancy to feel like Superman! Seriously. They think that they can handle everything – from building the business to taking care of the accounting to managing their social media and other stuff. Fabienne Raphael considers the best would be to invest for the right guidance, so you avoid many mistakes and help your business grow faster. All successful entrepreneurs got help. (Remember Tip #9)
49. Getting too excited about the small things – Starting a business is a marathon, not a sprint and your enthusiasm gauge is a lot like your stamina gauge. Nate Materson of Maple Holistics feels that if you get too excited about the small things you’re going to be expending more energy on the small things because you’re making them out to be more important than they actually are. When big things do come up, you’ll be too overwhelmed to handle it.
50. Monetizing too soon – You’ve worked hard and it’s only natural that you want to see some money for all your hard work. The most important thing to remember is that the longer you wait to monetize, the bigger the payday. Think about Facebook; they could have charged for their platform and then it wouldn’t be nearly as popular as it is today and now it’s a platform with billions of people and millions of ways to make money.
This is a mistake that I also see several bloggers make. After creating a blog, instead of slowly building up traffic and then becoming an affiliate or even better – selling your own product, they try their luck at Adsense. Although there are several fundamental principles to succeed with Adsense, it is not the best monetizing option out there.
51. Focusing too much on the money and not on the quality of work you produce – You are as good as your last job, and the quality of work must always be paramount.
52. Not to have your lawyer review all contracts – In the rush to getting a client, sometimes you make mistakes, which is why Emil Jimenez, CEO/CCO of Passion Communications recommends startups have a lawyer review all their contracts. After all, it can be disastrous for you and your company’s future, if the contract consists of errors and mistakes.
Related Read: How To Create A Memorandum for Your Company in India
53. Not planning and setting a budget – If the business does not work on paper it is highly unlikely it will work in real life so Adam Jons of https://hollywoodmirrors.co.uk believes the first step is to plan everything and have a sound financial plan. Then the next bit is sticking to this budget it is easy to be really enthusiastic when starting out and spending money on things that are not important or that won’t get a return on investment or going completely over budget. This will put you on the backfoot from the very start.
The whole purpose of a business is to build an asset that makes a sustainable profit. Don’t let your ego or emotions deviate from the financial plan that is written to work. Don’t get me wrong; things change quickly in business but budgets should not change unless they are being reduced, increasing the budget and throwing money at a problem is not the answer, become more resourceful and play the long game.
54. Not putting enough focus on the online digital presence of the startup – A big mistake that Damien Buxton, Director, MidasCreative often sees with some startups is the fact that in the beginning, they don’t put enough focus on their online digital presence, including their website and social media platforms. We live in an age where the internet is accessible to everyone on the go. Having a strong website and active social media accounts will help potential customers find their business. Without it, a startup won’t be competitive and will have next to no exposure.
- Link Building for SEO
- Domain Authority-All about it
- How You Can Create an Infographic that Goes Viral
Note that this tip may seem similar to tip #35 which is having a bad website but isn’t. Having a bad website is one thing but optimizing your site for SEO and having a strong social media presence are completely different. While tip #35 talks about how a bad website may make your startup look bad in the eyes of potential customers, this tip goes to show that if you build a strong online presence, your chances of getting more customers is even better.
However, remember not to go overboard in your attempt to be everywhere. It can on the contrary harm your online presence. You don’t need to have your startup all over the internet. On the contrary pick a few places such as YouTube, Google and Twitter and focus on building your online presence over these platforms.
55. Waiting too long to hire – Most startups wait until they’ve reached certain revenue milestones before hiring in order to manage cash. However, waiting too long to hire can put unnecessary stress on you and your employees. Operating short-staffed leaves everyone feeling frustrated, over-worked, and behind deadline. Sid Soil, Owner/Founder Docudavit believes that although hiring early-on does cost more, however, in the long run, it will provide lasting befits for you, your company and your team in terms of improved customer loyalty, team culture and staff retention.
56. Co-mingling personal and business funds – Then, when it is time to prepare financial statements to do a tax return or to get funding, the data is almost impossible to segregate and clean up. Chris Hervochon of CJH Financial considers it to be difficult to make solid strategic decisions without good financial data.
57. Compete on the cheap end – and someone can always make it for less.. Quality like the tortoise will ultimately win out or as Craig Wolfe, President of CelebriDucks likes to say, “live by the penny, die by the penny – don’t compete on price alone! Quality is the hardest thing to knock off. But these days, people think they can compete on being better based on price alone. It doesn’t work.
58. You HAVE to own your niche – Everything you do should be about bulletproofing your brand so that if you have a good concept, you can move fast to really get it out there and lock up the market as quickly as possible. Failure to do that introduces a good idea that your competition can then bring to market in a bigger and quicker way than you!
59. Too many people are spending too much time drawing boundaries around what can and can’t be done – Chase Sagum talks to so many people who hear about a digital marketing strategy or tactic that didn’t work for someone they know, and assume the same learnings apply to them. His advice to you based on getting “my teeth kicked in” many times over the years by making this mistake… TEST EVERYTHING!!! What doesn’t work for someone else might very well, in fact, be the thing that grows you exponentially. You’d be surprised how often that has been the case for me over the years.
60. Lack of digital marketing channel diversification – This is preventing brands from growing to their full potential. This happens with so many up-and-coming brands! A brand gets 1 strategy in 1 channel to work successfully and they expand that as far as they know how. But then they stop there. You have to continue to test in new channels. You have to invest. You have to challenge yourself and your team.
Get out of your comfort zone. You may lose some margin in the process but the long-term return of your testing will be exponential when you find a new strategy in a new channel that works.
61. Not focusing in enough on a narrow enough niche – It’s always tempting to want to build broad solutions, but the reality is the more you focus on owning a specific niche or vertical, as narrowly defined as possible, the better your chance of success. Some of the biggest mistakes David Heacock, founder and CEO of FilterBuy.com has made was from trying to take on too much. On the contrary he has always found success when narrowing or marketing and messaging into a very specific market.
I wholeheartedly agree. Think Tesla, will you?
62. Not creating successful systems and processes – Without systems and processes in place, no startup can mature. No matter the size of the startup, Tyler Bream feels that systematizing the critical functions of the business like customer acquisition, lead generation, etc, simplifies your business, helps save money, and enables quicker and easier growth than otherwise.
63. Avoiding Feedback – Every startup crew will have a serious passion for the business they’re embarking on. This is required to have the will to get up and get to work every day, even though the trials and tribulations of starting a new business.
However, this can sometimes cause the founders and team members to ignore important customer feedback that may require that they deviate from their initial business model or plan. The risk around this is that is feedback is ignored, you may be building a business to your own specifications, rather than the specifications of your customers, the people who are actually going to make the decisions to purchase your product/service or not.
To avoid this, Ally Compeau of Woof Signs feels that startups need to listen very carefully to customer feedback and solicit it regularly. The feedback needs to be analyzed and the business needs to be tweaked accordingly.
64. Thinking that their website will be found automatically – It takes a lot of effort to promote a website, says Judy Cutler of JessPerna.com. Having the best product ever invented won’t help if no one finds it and this is particularly important if your website is key for you to draw in business opportunities.
Unless you invest in a Search Engine Optimiser to optimize your website for Google (you can learn SEO yourself too), your website isn’t going to make a name for itself and come to the notice of your ideal customers!
Here are some amazing posts on SEO-
- Link Building for SEO: Introduction, Benefits and Strategies
- Domain Authority: The Comprehensive Guide
- The Ultimate Guide To Help You Build Links
- Guest Posting: Why and How to Do It
- Build Backlinks and Gain Massive Exposure Using HARO
- Create A Blog Post that Goes Viral and Brings Backlinks
- Hiring an SEO – What you Must Know!
65. Disregard for your business name – You’ve dreamed about your business for years, and you jumped in with both feet. The name chosen, however, is super generic and you did it to be at the top of an alphabetical list, or to be all encompassing of a location. Trouble is, there are 1-5 other businesses with a similar name. Katie Hellmuth Martin of Tin Shingle advises that this will not only cause customer confusion, but opens up your business to liability for trademark infringement should another business want to snuff you out (or make your change your name). Get creative! Please!
There are several points in this post which stress the important of branding and choosing a nice brand name. This is pretty much the most vital step of your business!
66. Snuffing of street parades, fairs and events – Some retail businesses with storefronts fear the parade or street fair because they think it robs them of sales. Quite the contrary. Parades and special events on the street bring people out of their homes and into the vicinity of your business. The job of luring them into your store is on you. If you have the chance to get a table at the event that day, do it. It’s a marketing expense. If you see it as a barrier to your business, and think that you already pay rent on the street, so why pay for a table, then you’ll miss an opportunity to reach hundreds of new customers that day. This is very important if you’re trying to localize your business to a different market, for example, India.
67. Getting too attached to a narrow concept – Sometimes you have to make a few changes to an idea or concept. Many successful startups end up doing something different than their original idea, even changing the core concept as well. Bijan Abdi stresses that you have to be prepared to grab a better opportunity when it arrives and let go of ideas that just don’t work.
69. Building the company around one employee thinking he would never leave – This is key. Alon Rajic warns against this trait. Your company should be or strive to be a self sufficient engine. It should never revolve any single person including you. Never depend on a person too much. If someone’s ability is head and shoulders above the rest, try to alleviate the rest.
70. I felt the need to add the most important point at the last. I read it in the Zero to One book and feel it is highly related to some other points here too. It is about making products that are incremental improvements to other products in the market. If you do that, you are going to get beaten by almost every other company, there is.
When renewable energy market came booming, it was estimated that the renewable energy market was worth trillions. With that, several companies rushed to take a part in the market and started to produce solar panels that offered just incremental improvements compared to its competitors.
Within a few days almost all the companies went bankrupt.
Now again, think Tesla.
Tesla also rode the wave of the market, yet when the market crashed, it didn’t.
Hell they are as of now the 4thlargest car manufacturers and largest electric car manufacturer in the planet. Guess why? Because, first – they focused on a narrow niche, that is high-end electric cars, second – they made it better than their competition in everyway possible. Where on earth will you get a car brand that offers free lifetime energy for its car owners?
Share it down in the comments!