Common Startup Mistakes Every Entrepreneur Should Avoid
After spending what seems like an immeasurable amount of time brainstorming, a light-bulb suddenly goes off in your head. You’ve finally unlocked that one idea that could revolutionize your industry, shoot your name into fame, or make you rich. Then you find yourself thinking that it’s an idea that’s too good not to monetize, too great to fail.
And it’s easy to rush into launching a startup to bring your idea to the world when you’re constantly scrolling through the media hype of the latest unicorns on the block and exciting IPOs. But the sad truth is, in the startup ecosystem, more companies fail than succeed. In fact, a study by CB Insights found that 70% of upstart tech companies end in failure, and this figure climbs to 97% for consumer hardware startups.
At first glance, the startup space may seem like a promise land where most roads can lead to incredible success. But it’s that same excessive optimism that causes most entrepreneurs to overlook some of the deadliest mistakes for startups when entering the business world.
Here are a some of the most common mistakes you should avoid if you want your startup to be a success story.
Not doing enough market research
The same study by CB Insights found that among the top 20 reasons startups fail is the lack of product-market fit in their offering. Ask yourself, is your product or service a solution looking for a problem potential customers may be having? And if you did indeed find a solution to the problem, is the problem significant enough for customers to need your startup’s help? Without conducting market research and gathering information, you may find yourself offering the market what you think it needs, instead of listening to what it has to say on that matter. The data collected from this specific research will help you widen your knowledge base and get better insight on what you’re getting into on the long term.
Ignoring customers and competition
When entrepreneurs are too invested in an idea they tend to ignore customers, but also competition, choosing to focus on the technical aspects of their growth. However, conducting an exploratory research on customers and competition should be the cornerstone of a startups operations. Before launching a product or service, it’s vital to receive customers’ feedback on your product, and learning about their past behaviors and current needs to adapt your offering accordingly. It’s even more important to dig deep into your competition, because where there isn’t much competition, there’s no problem to solve. The result would be you carving out a niche that’s far too small to grow a business in.
Setting sail without a compass
From having the right people on board, a specific mission and vision, to a viable business model, you need to set the destination before you start your journey. Entrepreneurs are often so overwhelmed with excitement, that they dive in head first without a clear plan on how to make their new business grow.
But without a solid and scalable business model, and efforts to diversify channels, investors may be hesitant to back your company, and you would find yourself unable to capitalize on any initial traction you may have gained.
Adopting a full-DIY approach
Entrepreneurs are usually so driven by their desire to see their business succeed, that they will want to take on every aspect of running a business all by themselves. And this could easily lead to getting sidetracked from their main goal, or even worse, causing significant damage along the way. Because the engineers and technicians behind the idea often lack domain-specific business knowledge and skills, they fail to let their vision reach its full business potential. Surrounding yourself with trustworthy advisors could allow you to discuss your business ideas, strategies, challenges, and progress. What’s more is that asking for expert feedback early on would help you determine whether your idea has potential for success and if there is room for product development. It can also help detect any inconsistencies between your business model, your resources, and your goals.
