Founding a startup does remind jumping off a cliff sometimes. The percentage of startups failing is just insane: more than 75% of venture-backed startups do not make it through. What about early-stage disruptive ideas and cutting-edge solutions that are about to change the world? Hey, don't get discouraged! As in any business, young startuppers tend to fall into the same trap: they often concentrate only on making money and underestimate long-term planning. Read about 9 most common mistakes to look out for when starting a startup.
- Being on your own
Founding a startup is a long and complicated process, not a one-person job. Even if you think you’re able to do all the work yourself, you will need colleagues to brainstorm with, to talk you out of bad decisions, and to cheer you up when your startup hits a low point.
- Hiring wrong people
Firstly, you cannot start hiring people too early in the work process, since it will most definitely drain the fundings. When you do start hiring, it is crucial to have qualified people in the startup and pay attention to possible personality mismatches which may cause an employee to not fit into the team.
- Not planning beforehand
Even though, your business plan shouldn't be as thorough as someone in business school would do, it should guide your startup in the right direction over the long term. It should clearly set what are the values, purpose, and mission of the company, who are the potential clients, and direct competitors.
- Not having a backup plan
In business, nothing ever goes as expected, and being flexible and able to pivot is a huge part of the game. Keep a backup plan for a worst-case scenario and be able to switch to it of the original one is not working out.
- Derivative idea
Instead of solving a problem themselves, many startup founders turn to already existing product and work back to the issues the product has already addressed. However, you should focus on looking for a problem and from that create a company that would solve it. What product do you wish existed?
- Thinking too small
It may appear to you that targeting a small crowd is a better decision for a startup since the competition is not that fierce. However, if you are making anything useful, you are going to have competitors anyway, so just face it at the very beginning. Remember, the only possible way to avoid competition is to avoid good decisions.
- Poor investor management
As a founder, you should know what you’re doing and run the startup, not the investors. Take into the account their suggestions and do not ignore them, however, concentrate on the product you're building. After all, you are the business founder too, not just a nerd thinking of a weird product in your free time.
- Sacrificing user for profit
Initially, focus on creating something people will enjoy, and not on making money off it. Many startup founders suppose it is irresponsible to not think of profit beforehand. And while it is, it is even more irresponsible to not think of the product.
- Bad timing
When launching a startup, timing is everything, and it can be arranged. Be sure that your startup actually works before making it public. Don’t rush it to the market! At the same time, do not wait too long for the launch, since it may drain the funds and give your competitors a chance to enter the market first.
Whether you're just thinking of starting a startup or looking for funding, keep on doing it! Try things out, brainstorm, and don't be afraid of failing. Who knows, maybe it's your idea that will disrupt the world in 2018 :)
Wanna be mentored by pros from 500 Startups, Singularity, YC, Google? Looking forward to meeting advisors and VC funds? Hurry up and apply to compete in #itarena2018 Startup Competition: https://itarena.ua/call-for-startups/