Entrepreneurs are an optimistic lot and what makes them special is that they are driven by passion & ambition. And while this may lead them to achieve elevated levels of progress and innovation, passion & ambition is also a leading cause of profound suffering and trouble if it’s not properly managed and reigned in.
Here are 5 common start-ups mistakes made by early-stage founders make as a result, alongside a few options on how to get back to the right track.
Jumping into build mode
The reasoning behind this façade is often: “I can do it, so I’ll go ahead and just do it”. Which translates to: “I have this brilliant idea, I have the technical skills to see it through so I’ll just go ahead and build what I have in mind”.
There’s so much passion, hope and bravery in this decision that it’s easy to get caught up and admire that way of thought. However there are some frightening facts—72% of all new products flop, and the main reason why start-ups fail is that they are offering services people don’t currently need.
Developing a technical prototype too soon
This is where the creator makes something to prove that they can do it before they do enough research on its feasibility. It is very common particularly among large companies or tech founders.
This translates to “I’ve had this idea, I have the technical skills/infrastructure or budget available, so I’m going to build it to see if it’s feasible or not.” It seems like a good paper strategy. It is advisable to check whether or not we can deliver anything before we pledge and sell it.
Proving that you will be able to do something does not necessarily mean that there is a demand for it! Instead, the easiest and cheapest thing to do after getting a new product or business idea is to start validating the customer’s problems that the Proof of Concept could intend to solve.
Writing a business plan too soon
A business plan is a text full of invalidated assumptions. Think about it this way: what if an investor sees the proposal and invests in your business? Simple answer: they’re going to expect you to implement it. Let’s rephrase that: they’ll expect you to execute a strategy full of invalidated assumptions and expect you to come back with the financial results based on the assumptions you’ve created. That would be a nightmare.
The ideal Startup Approach is to get started. In other words: instead of spending weeks gathering invalidated assumptions that no one will ever read, just start doing business properly by validating the riskiest assumptions as easily and cheaply as possible.
Not being focused enough
Zeal and determination often lead the entrepreneurs astray and many find themselves in the wrong spot. There are entrepreneurs with glorious dreams that would have been welcomed and if executed, would have made the world a better place. Yet zeal and determination had the best of them and left them so restless that they just couldn’t make any of their business proposals work. Problems like launching several companies at the same time, like an online marketplace with no reliable evidence. Whatever the height of the peak, the only way to get to the summit is to take one step after the other to the top. As we’re going up, we could take turns avoiding pitfalls, falls or creeks, but we’d be focused on the summit all the time.
For early-stage start-up entrepreneurs, the emphasis must be on early adopters, those consumers who are in urgent need of the company’s products/services. Gaining the market share of early adopters would be the first step towards achieving a high-quality business summit.
Expanding the team too soon
Working together can be enjoyable, but it’s rarely easy. It can kill team dynamics between co-founders who are dangerously focused on how to deal with each other instead of how to solve consumer needs whilst at the same time making a company profitable. The enormous amount of energy that a new company needs cannot be sustained if the leadership allows stuff like this to happen. Start-ups should keep the founding team as lean as possible until they have a concrete plan. Finally, start-ups should be careful who they put on board. The path to product-market fit needs people who are comfortable with change, chaos, and learning from failure and are at ease operating in risky, unstable circumstances without a roadmap or a predefined strategy. These are all characteristics the general public lack
These are 5 common problems that cause startups to fail to lead to a weak management team. A good management team will be smart enough to avoid all these problems and set the company on a good trajectory.