Building a successful company from scratch is a complicated process. More or less often, new entrepreneurs face problems, some of which can kill their business.
We managed to gather the most common mistakes made by startup founders and tips from prominent experts on how to avoid those.
Entrepreneurs are optimistic people; they often exaggerate their expectations and, later on, bump into ferocious disappointments. You should not be afraid of those! What does not kill you (or your business, for instance) makes you even stronger.
There is another feature that should be pointed out in advance. We live in the time of mobility. This up-to-date phenomenon includes both enhanced speed of development on initial stages and the ability to fit new circumstances.
It could also be called “flexibility”, but it would not depict the entire range of necessary qualities. Therefore, most startup mistakes are based on hyperbolic expectations and the lack of mobility. Now let’s move on to particular problems.
1. Not having a business plan
A good business plan is a core part of your enterprise, so it must be detailed and scrupulous. Define with your purposes, mission, and potential users; describe every single stage of growth, think about alternative courses of action.
Eventually, plan the financial management out (where to get money and how to spend it). Coming to investors, you normally must demonstrate the strong points of your venture.
2. Conflicts between co-founders
No one can forbid you to be a single founder, but doing everything on your own is quite exhausting. Working in a team can bring you much more success, as you will always have an opportunity to share ideas and experiences. Of course, entrepreneurs tend to be ambitious. Clashes are inescapable; your task is to find proper solutions.
3. Failing to find the right investor
Sooner or later, you will have to start fundraising. To find the right venture capitalist is not as easy as you might think. Apart from having strong expertise, that person must match you, your team and your project.
Investor’s goal must be not only revenue but your clients` delight. That means he must be really involved into your business idea. To that end, seek a like-minded investor, who will provide you with both money and advice.
4. Not taking users`opinion into account
Always communicate with your customers. The main question you should ask yourself is “Why must they buy my product?” You may think that the answer is obvious, but you will actually never know for sure.
Before making drastic changes to your project or adding new features, test those by doing your own research: get a dialogue under way and figure out what your audience likes or dislikes.
Our friends Full Stack Developers from railsware.com shared their experience so that we were able to formulate this statement; find out more on their website.
5. Being influenced by others
You will certainly need consulting, but you must decide on your own what is better for your business and have your own understanding of how the things go.
To manage with it, follow your own direction, gather all the possible data and regularly check your client base out – it is necessary to obtain feedback. Even physically, it is unreal to take notice of any recommendations you get.
6. Trying to avoid rivalry
Do you think it is less risky to target some trivial niche market? Any business is a competition, so you will not be safe in any case.
Your startup cannot develop if you do not have appropriate competitors, who stimulate your progress. Their presence is a sign that your project is really worth something. Never be afraid of thinking about grand ideas.
7. Having no marketing focus
As you cannot appeal to anyone, you have to find a target audience before launching. Well, your product may transform into something that will fit almost everybody, but at the early stages, you sell to a certain group of consumers.
How old are they? What do they need, prefer and would like to get? Nothing will work until you can answer these questions.
8. Trying to bite off more than you can chew
Nobody is perfect, neither you are. Working on your product, always evaluate and set your priorities right. Otherwise, it may turn out to be costly. Cool features and design weigh a lot, but these things are not prior.
At the beginning, focus on important business matters even if they are not so fun: decide on basic functions and usability, urgent financial matters etc.