Mistakes are a part of every startup’s life cycle but wouldn’t it be better if you could get advice from successful entrepreneurs around you? Check out what these successful founders, VCs and mentors have to say about common mistakes a first time entrepreneur should be careful about in their journey –
Evan Reas, Co-Founder of Hawthorne Labs shares what entrepreneurs should be wary of –
- Lacking 100% commitment. Part-time doesn’t work. A startup must be your number one priority 24 hours a day.
- Lack of focus on customer acquisition. Customers don’t just show up, even with a great product. Not only does your product need to be better, but your customers need to know it and be constantly reminded of it.
- Not taking enough risks. Startups are in the unique position of having few users and less publicity spotlight on them and can try-out (and make mistakes with) bold things that larger companies can’t.
Peter Baskerville, Teacher and Edupreneur, who started over 13 businesses, shares his experience on what first-time entrepreneurs fail to do
- Failing to realize that successful corporate approaches are inappropriate for small business startups. i.e. You are in a fight for survival not just playing your part in a management committee decision making activities. A startup is not just a small version of a corporate enterprise, it requires a completely different approach in development like business modelling not business plans, customer development not product development and entrepreneurial lean management not strategic/corporate management.
- Failing to realize that you need to be very good at everything not just be an expert in one field. i.e. You need to be the generalist rather than the specialist.
Chris Macintosh, Investor and Entrepreneur, believes these things can easily sink ship for entrepreneurs who are starting out –
- Building a product or service which the market doesn’t want. Market research is critical. Don’t ever neglect this. You may think you’ve got a great idea but until you have validated your market you don’t know.
- Being too optimistic. A lot of entrepreneurs tend to be far too optimistic. They fall prey to the optimism bias, a cognitive illusion that leads us to overestimate our likelihood of experiencing good events in our lives and underestimate our likelihood of experiencing bad events. One example of this would be overestimating how many sales they will they generate. Another common example is underestimating how long will it take them to reach a certain milestone.
- Making a mistake of raising capital. Largely due to the VC culture that praises raising money as success, many entrepreneurs currently live under the impression that they NEED to raise money for their companies. You should understand that raising money amounts to taking someone’s hard-earned capital. Realise that raising capital is a liability no matter and ALWAYS comes with some form of strings such as board seats, preferred equity, liquidation preferences, etc.
(The answers originally appeared on the question ‘What are the most common mistakes first-time entrepreneurs make?’ on Quora.)