The Top 12 Startup Mistakes to Avoid
Optimism, passion, and willingness to take risks are definite factors in starting a business. Unfortunately, it takes a lot more than that to succeed. Research shows that only 50% of startups are still standing five years later.
Mistakes exist in all startup operations and even in corporate businesses – no one is perfect. The key here is to learn from your mistakes and the mistakes of others. Here are 15 brutal but straightforward mistakes entrepreneurs make that will lead their startups in the wrong direction.
- Having no founding partner – Two heads are better than one. Statistics show that teams of two typically raise 30% more money, have nearly three times the user growth, and are 19% less likely to scale prematurely.
- Choosing the wrong partners – While it is best not to go into a business solo, you must select the right partners. This not only includes founders but investors as well.
- Premature scaling – When startups begin to use scaling to drive the growth of the business, they tend to spend too much, too soon – and that is premature scaling. Scaling is excellent when it is done right and in the correct order. It is best to avoid spending money scaling the business without knowing exactly what customers want and how to reach them. Some reports state that 70% of startup’s failure is due to premature scaling.
- Launching too soon/early – In the process of doing market research and competitor research, you likely come across aspects that are going to be essential for your business to succeed – things you never even thought of. So, in this case, if your business is not quite prepared, expand your timeline. Trying to push everything out on top of adding additional features in a short time can be a recipe for disaster.
- Procrastination – While launching too early can be bad news, you shouldn’t take things too slowly. Give yourself deadlines for specific tasks to be done and only change that timeline if the product depends on it. Procrastinating only leads to the manifestation of other problems, excuses, and doubts. So if your product is ready, let it go. There’s always room for further improvement after launching.
- Not doing competitive research – Every business has competitors, no matter how big or how small. To gain a competitive advantage, it’s essential to know who your competitors are. You should know what they stand for, what products and features they offer, what their website looks like, and what customers say about them. Constantly keeping track of development and improvement is key to staying on top.
- Lack of market research – If you don’t have in mind who your users are, who will you market and sell to? How will you know if what you are offering is even in demand? Market research is a critical aspect and worth investing in as it helps you refine your features and prepare your marketing and sales strategies and messaging.
- Obstinacy – Holding on too tightly to your original business plan and not being open to making adjustments based on the market and what users tell you can be a huge setback. If your users don’t like what you’re offering, they won’t buy it. In this case, you must adjust to what they want – even if that means switching up your original idea and business plan.
- Having a derivative Idea – Your product should be unique, offering something that your competition has yet to offer. Don’t just copy the latest trend; think outside the box for something users need and want.
- Not creating a solid minimal viable product (MVP) – An MVP is the most basic set of features your product needs to deliver on its purpose. Starting with one will help begin the process of users learning your product, allowing you to make changes and add features as necessary. It enables you to gain feedback, target early adopters, and provide you with the opportunity to define what value you would ultimately like to deliver to your customers.
- Choosing the wrong location – Location can play a massive role in the startup process. You want to be where your customers are, the people you want to hire, and where supporting industries are.
- Not embracing agility – For a startup to survive, you must keep an open mind and be ready for anything to happen. While corporate competitors may have some advantages over your startup, if you stay active and agile, you’ll gain better relationships, maximize productivity, and deliver better results in no time.
- Being under-capitalized – If you don’t have enough money to meet the basic startup needs, there’s a problem. Start with enough capital to at least develop and launch your MVP and be patient in the process of making or raising more.
- Not thinking through business processes – Having a plan gives your startup the direction it needs to succeed. While your plan may change along the way, you still need to have basic business processes worked out and documented to obtain an overall successful outcome. Start with the essentials like how you will onboard customers, process payments and refunds, train staff and users, handle leads, and so on.
- Lack of determination and effort – As a founder of the company, you must be willing to dig into the business, expand your connections and meet people, and be available to put in extra time or work when needed. If your heart is not in it and you’re not fully committed from the beginning, it’s often hard to stay determined to see the startup through the launch phase, much less growth. However, if you’re putting in 100% from the start, they’re be no stopping you once you reach launch day.
Starting a business from the ground up is a journey of risk and opportunity. Making sure you have these 15 areas covered will set you on the path to success!