This article aims to bring you up to speed on some of the most common mistakes that new founders make so you can avoid the same fate. There are dozens of screwups that a founder may run into, but these are the 8 that you need to know.
Let’s get right into it!
The Top 8 Mistakes Startup Founders Make:
- Lack of Planning
- Vague Goals
- Poor Market Awareness
- Too Many Founders
- Going Solo
- Bleeding Cash
- Wrong Hires
- Insufficient Patience
1. Lack of Planning
One of the first things that a new founder may fail to do is plan everything out properly. It can be easy to get caught up in the excitement of starting a new business — which is a shame since forethought is so essential during the early days of a company.
We’d advise the founder to put pen to paper and map out their vision. Yes, the word “map” is italicized for a reason, and you’ll see why in the next section. You can start out by analyzing your industry so you’ll be prepared for obstacles you’re likely to encounter.
When it comes to planning, it’s crucial that you’re optimistic but realistic. Think long-term.
2. Vague Goals
Another thing that can really slow down the progression of a new business are goals that are far too vague. You really need to be specific when setting company goals if you hope to achieve them. Define specific milestones and incorporate a deadline into each one.
Using a roadmap can help you visualize the planned progression of your business. Furthermore, roadmaps also make it easier for you to communicate the vision to other founders onboard — hopefully not too many, but we’ll get into that later.
Set SMART goals:
Implementing SMART goals will help you avoid the pitfalls of goals that are too vague or intangible.
3. Poor Market Awareness
The third mistake we want you to be aware of is having a poor understanding of your market. The Dunning-Kruger effect is very prominent in startup founders since they’re in the first stages of running a business and thus overestimate the scope of their knowledge.
If you want to combat this effect, then stay aware of its impact and constantly check yourself to see if you’re being overconfident. Put the hours into market research until you know the industry like the back of your hand. It may seem like a lot of work, but it’ll pay off in the long run.
After all, failing to understand your target audience can lead to negative customer feedback. Let’s just say that launching a new product after the first batch got nothing but one-star reviews is an uphill battle you don’t want to fight — but one you’ll have to if you’re not careful.
Data has shown that as the year of operation increases so does the percentage of businesses that fail.
Having a solid understanding of your market will allow you to stay ahead of the curve and avoid failure.
4. Too Many Founders
New startups that suffer from TMF syndrome will have a higher likelihood of failure. In theory, it would seem like having more people on the team would be a good thing since it brings new perspectives and a larger pool of skillsets.
However, there’s a point where the returns are diminished by the potential discord that could arise. Startups with too many founders will struggle to get anything done since every decision can take days if not weeks to finalize.
Of course, we’re not saying that you should do everything by yourself.
5. Going Solo
Why? Because the inverse is also true. If you have too few founders working with your startup then you’ll still struggle to grow — albeit for the opposite reason. We know that you feel unstoppable upon starting your first business, but don’t let ego stand against the greater good.
You can’t do everything on your own. Even assuming that you see eventual success as a lone wolf, it’ll take a lot longer than it would have if you were working with others. Steve Jobs himself needed Wozniak by his side when he was making Apple the tech giant it is today.
Acknowledge your weaknesses so you can work with those who compensate for them.
6. Bleeding Cash
Startups — particularly those who receive early investments — tend to bleed cash at alarming rates before making any sales. New founders often underestimate how fast a seven-figure investment will be depleted if the business isn’t careful with its spending habits.
One area that young companies tend to overspend on is office space. We’re not saying that infrastructure isn’t important, but renting a massive office when you only have a dozen employees is far from being on a cost-effective path.
Maintain the proper balance of infrastructure and frugality to achieve sustained growth.
7. Wrong Hires
In a similar vein, you should be careful with who you hire when growing your company. Startups that get a million-dollar investment at the start of their journey may think it’s time to hire an army of developers. This is unwise since you shouldn’t waste money on overkill-level capacity.
Beyond volume, it’s also essential that founders are mindful of skillsets. You don’t want to hire cheap labor then have to deal with quality control issues down the line. Competence costs money, and you get what you pay for.
It all comes down to picking the right employees without bleeding your company dry by hiring a legion in the first week or headhunting former C-level personalities. If you find balance in your recruitment then you’ll be in a good position to grow your startup into a full-blown business.
8. Insufficient Patience
The last obstacle to success that startup founders may face is their own impatience. You need to set realistic expectations when creating your business. You can’t anticipate overnight success without setting yourself up for disappointment.
Delegate tasks to others using project management software rather than rushing the process and handling everything yourself. If you pretend that everything is overdue and cram as much work as possible into every workday then you’ll burn yourself out.
Burnout will, of course, bog down your subsequent efforts and cancel out any progress you made during the initial burst of productivity. Positivity is great but you shouldn’t set standards so high that you leech the fun out of the process. Not everything has to happen right now.
As long as you keep working at it and keep a consistent pace, you’ll get to where you want to be when the time is right. Those with patience and strategy can achieve most things they set their mind to.
Be a Wise Founder
As you can see, you don’t have to fall victim to the various banes of a founder’s existence. If you have the right mindset, approach the situation in an effective manner, and plan things out from start to finish then you’ll be on the fast track to success.
The wise founder plans and waits while foolish founders destroy themselves by trying to get everything done immediately. Work at a pace that you can actually sustain over a long period of time, otherwise, you’ll get caught in a loop of cramming, burnout, and disappointment.
Take the time to reflect on if you are currently making any of these mistakes.
If you found this article helpful then be sure to share it with your fellow startup founders so that they too can steer clear of the eight mistakes that might land their business in deep water. That’s all for now so go crush it and stay safe!