The good news is that everyone expects entrepreneurs to make mistakes, since founders explore uncharted territory. Startup Mistakes? In fact, investors recognize that founders usually learn more from mistakes than from success, so a well-explained startup failure can improve their odds of funding the next time around. However, investors do expect you know the common pitfalls and not repeat them. Well, below are some startup mistakes you cannot afford to make;
Assume you already know what your customers need and want.
Just because you love a new solution doesn’t mean your customers will love it. Before spending any money, make sure you interact directly with potential customers, industry experts and investors. Be prepared to pivot at least once before you get it right, even with this input. Startup Mistakes?
Forecast revenue growth that defies business principles
Every business takes time to scale and penetrate a market due to organizational growth, hiring; training, brand building and customer adoption. Forecasts that exceed 10 percent of a large opportunity in the first five years rarely happen and will likely disappoint you and your investors.
Confidently believe that you have no real competitors
Startup Mistakes? Usually, no competitors means no market — or it means you haven’t looked. If the market is new and competition is minimal, then the time and costs of educating potential customers probably exceeds your survival time and budget. Innovation in the face of a few competitors is much less risky.
Not Doing Marketing
The common startup mistake of many owners is the belief that their products are just so great that they don’t need any marketing. When investors ask such entrepreneurs what their distribution strategy is; they say “word of mouth” or “social media” without further details.
Don’t overestimate that after several Facebook posts your product will become super popular. Otherwise, you will have to face the harsh reality. If you want your business to be effective and successful, don’t put off marketing and promotional activities and prepare a step-by-step plan.
Try to solve all the world’s problems with a first solution
A startup needs focus to do one job well or risk the alternative of solving many problems poorly. It’s tempting to tell everyone about all the future potential uses of your new technology and risk confusing them, having them wait for your future or disappoint them with several poor solutions.
Dismiss the need to register any intellectual property.
Some entrepreneurs believe that being first to market will keep them ahead of competitors. They forget that big companies with many more resources do wake up when they see your traction and can easily overrun your efforts. You need patents and trademarks as a barrier to entry.
Count totally on friends and family to run the business.
Every startup business is a new challenge and needs real dedication, experience and skills to survive. Friends and family may tell you what you want to hear rather than what you need to hear. Personal relationships and emotions have broken many businesses — so be careful.
Hire helpers in lieu of people who are smarter than you.
When you need help as your startup grows, many entrepreneurs are quick to hire less expensive and more available helpers rather than finding the real skills and experience to complement their weakness. Hire people who can train you rather than ones you need to train. Hire slow and fire fast.
Build the company at the expense of employees
Being too aloof or busy to lead and communicate goals and status to the team is a sure way to reduce motivation, morale and productivity and set the wrong culture. A startup with happy and highly motivated employees will provide a better customer experience resulting in viral customer growth.
Try to build a business without specific milestones or a plan
Building a business is much more complex than building a house, and I don’t see any houses winning awards that were built without a documented design and plan. The plan should not be put together for investors but to map the workload and desired results to you and your team.
So, as you contemplate your next startup, it will be worth your effort to go the extra mile to avoid these mistakes. Doing so may well save you the time and cost of a startup failure and also will save you from the embarrassing admission the next time around that you don’t pay attention to the advice and counsel of people who have been there before you. That doesn’t bode well for your ability to manage funding or your likelihood of success the second time around.
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