Experienced entrepreneurs know very well ways that they can avoid common mistakes in new product and company development. However, this isn’t the case with first-time founders and budding entrepreneurs. Here are the 11 most common and biggest mistakes that startup founders make when launching their new business.
11. Doubting your idea early on. Doubt is natural, you will have ups and downs, this is completely natural, but if you doubt your idea within the first month or three of your startup career. Chances are you’ll become disheartened quite early on and quit. Save yourself the trouble and thoroughly analyze your concept before taking the plunge.
10. Secrets are no fun. Talk, and share your idea with people you trust, friends, family, colleagues, these people are inevitable to the success of your business, you don’t know everything, and collaboration can more often than not fix problems before they arise. People won’t steal your idea, the hard work is the execution.
9. Forgetting about scalability. Good ideas scale well, multi-million ideas scale at their core. How big can your product realistically get? Who is your customer, and how can fast can you grow without compromising service.
8. Flying solo. Think you can do everything yourself? You can’t. Involve others. Even if you’ve decided to start alone, bring in friends, talk to your network, and see if people will help you out. You don’t have to give them an equity stake, in the beginning, see how you work together. If you work well, you may want to ask them to come on board with you.
7. Launching too early or too late. Timing is everything, think about the market, the economy, the sector you’re in, where is it now, where will it be in 3 months, 6, a year or two out. You don’t have to change the world today, and remember launching today may lead to failure, just like launching too late may lead to failure as well.
6. Going on a spending spree. Meaning, poor cash management. You may have $250,000 that you received in the form Friends and Family, and you think it’s great so you pay a premium for services that could otherwise be outsourced, delivered in a more cost-effective way, and get everyone brand new Mac Pros to write e-mails on. Not a good idea, cash is king, save it.
5. Developing a product without adequately deploying resources to effectively market it. Sure, you may have a product that could cure cancer, end world hunger, and fly humans to the moon, but if no one knows about it, no one will use it. Market it, and market it effectively. Set the right KPIs for your business, and track them.
4. Involving yourself and your business in ethically questionable practices. Unsavory marketing practices, overly creative accounting, being unfair to your employees are just some of the things that will, in the end, ruin your business, don’t do them.
3. Focusing on the bottom line instead of on the service/product you offer your customers. Your customers are your lifeblood, if they are unhappy your bottom line will suffer, if they are happy, they’ll be repeat buyers, and even help market your product. Simple as that. Invest in customer experience from the get to.
2. Setting unrealistic objectives in your development and deployment pipeline. No matter what you think you will not underpin the world in a year (or even a few), you will not have an annual run rate of $20,000,000 by the end of year two.
1. Have a poorly defined value proposition. Having a poorly defined value proposition will cause you headache after headache when looking at, and presenting your business model. You have to know who you are targeting, what you’re offering, and why they would want to use your product or service. Who is your customer?
What do you think of the 11 biggest mistakes startup founders make when launching their new business? Can you think of something we forgot? Let us know, and good luck!