Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.
No one begins a new endeavor while planning to fail. However, too many entrepreneurs begin their ventures making mistakes that can cost them their chance at success. Here are 12 of the most common startup mistakes to avoid as you carve your path to success. Chances are, you’ll make a few mistakes on the way despite the best of intentions, but this list should help you sidestep at least a few.
12 Common Startup Mistakes to Avoid
1. Failing to Plan
How’s that business plan or business model canvas coming along? What activities do you have planned next week, next month, or six months from now?
Planning is a necessary part of business. You cannot succeed without a plan. Failing to create a workable plan that details your activities, as well as your expected outcome, could put you in a place where you’re making poor decisions because you lack data or a roadmap. Your plan is like your GPS – it can provide you with a path to get you from one point to another using the data that you have. With more input, whether due to a wrong turn, a new shortcut, or information about traffic, you can recalculate your plan to make sure it keeps working for you. In short, a plan can help you reach your destination with fewer detours.
2. Ignoring the Customer
Focusing on your goals, products, and services can be an effective way to get things done, but it shouldn’t blind you to the most important aspect of your business. You never want to shift the focus from the customer or client.
The needs of your target audience are extremely important. They are what keep you in business. Customer feedback is amazingly valuable and can help you to pinpoint issues with your products or services.
For example, if users are finding your app interface clunky or that your proprietary cleaning solution leaves an unpleasant odor, that’s valuable feedback you can use to better your offerings. That’s why the lean startup model emphasizes feedback as a way to provide information for future iterations of products or services. If you’re trying to fulfill a particular need or fix an issue, sometimes the customer is the one who can help you determine how best to do it. Keep your ears – and inbox – open.
3. Poor Goal-Setting
Not setting goals, setting unrealistic goals, and setting unmeasurable goals – these are all symptoms of poor goal setting. If your goals are your benchmarks, you need to be able to demarcate a clear path to get you there. That’s where SMART goals come in.
Your goals should be Specific, Measurable, Attainable, Realistic, and Time-based. Saying that you want to revolutionize the way insurance is sold is not setting a SMART goal. Taking that overarching vision and breaking it down into digestible pieces that can be independently achieved and measured within a particular timeframe can increase your chance of success and provide you with data about where you went wrong.
4. Poor Hiring
Finding the right people can be difficult, especially when you really need to get a position filled or feel like you need the help. Poor hiring can have dire consequences. Hiring talented individuals who aren’t invested in your vision can hurt just as much as hiring individuals who don’t have the right abilities.
Rather than rushing into hiring, consider the experience and qualities you’d like certain roles to bring to the table. When seeking help or interviewing, focus on those skill sets, but continue to keep an open mind. The hiring process may help to reveal other, previously unanticipated, skills you’d appreciate in a candidate. Be upfront about your expectations and your desired level of commitment from candidates so you can make the best choice for you and your company.
5. Spending Too Much or Too Little
There are plenty of tales of companies who blew through their investors’ money by renting lavish offices or building untested prototypes that nobody wanted. Similarly, there are tales of organizations that were so tight-fisted with cash, they didn’t get to market soon enough.
Striking the balance between spending too much and spending too little can be hard. It’s necessary to prioritize expenses and focus on investing in the right things, i.e. the things that will get your brand off the ground. A well-conceived business plan can provide guidance on spending, as can a business model canvas that illustrates the different expenses necessary to make your value proposition a reality.
6. Doing Everything Yourself
Starting a business is a difficult endeavor that requires a lot of time and energy. If you’re trying to do everything yourself, you’ll burn out quickly or lose your passion. That passion, however, is exactly what you need to keep your project going.
Don’t drain your energy on tasks that can be delegated. Whether you hire the right person for the job or outsource, put your energies into what you do best and invest in others who will bring the best to your company.
7. Falling Prey to Fear of Failure
Fear of failure can be healthy in small doses, particularly when it helps you minimize your risks. It can also be a major hindrance. Don’t let fear of failure stop you from trying something new. Rather, approach it as you would any business decision. Enumerate and research your options and then move forward with caution. Get feedback, make changes, and keep moving forward.
8. Working in a Bubble
You aren’t alone in what you’re trying to do. While you may be focused on a particular industry and a particular product, there are plenty of entrepreneurs attempting to launch a successful business. Networking with other entrepreneurs and vendors can help you to advance your goals, get useful feedback, and have a sounding board to provide useful advice.
9. Lacking Flexibility
Setting a plan in place feels good and sometimes it’s necessary to stick to the plan, even when things aren’t falling into place. It’s also necessary to differentiate, however, when it’s time to change course.
A plan cannot be set in stone. It must allow for deviations. An effective plan may even detail when it’s time to consider other options based on results (or lack thereof). Feedback and data can help you determine whether it’s time to pivot or rework your business model.
10. Setting Unrealistic Expectations
Projections should be based on data, right? However, sometimes it’s hard to buckle down and create realistic expectations because we’re enamored with our amazing idea that is going to change (insert your preferred industry or market sector here).
It’s important as entrepreneurs to remove ourselves a bit from the blinding specter of our great idea in order to gain some perspective on reasonable expectations. While a business plan or business model canvas can help with this, it’s extremely important to solicit information from potential customers and clients – your target audience.
Knowing your target audience can help you better determine how they’ll react to your product or service. Additional data about the economy, spending, and competition can also help you to set more realistic expectations. Coupled with SMART goals, your new realistic expectations can help guide your company to success.
11. Intuition vs. Data
Gut feelings are nice, but they aren’t a science.
Steve Jobs had a strong gut feeling about the future success of a transportation device that he believed was set to change the world. He was prepared to invest millions in the company. The product? The Segway.
For Jobs, his intuition worked wonders in the field he understood – computing. When he stepped out of that field, his intuition failed him. Why? Even though he was quite intuitive at Apple, that intuition was based on years of dealing with computers, designers, and more. Intuition is generally only helpful when you already know a great deal about the subject matter.
Data, on the other hand, is invaluable. So long as you can approach data with a clear mind and allow it to paint a picture for you (rather than trying to force data into your preconceived framework), you’ll be able to utilize it to aid in making smarter decisions. Sure, intuition can still play a part, but never omit the data.
12. Not Recognizing or Researching the Competition
You aren’t alone. No matter how ingenious your product or revolutionary your service, you have competition. Don’t ignore them.
While your competition may not be providing the same exact product or service, they may be attempting to meet similar needs or solve a similar problem in their own way. Why should consumers choose you? To be able to effectively answer this question, you have to research your competition and learn more about what they’re trying to do and how.
Entrepreneurs are humans and bound to make mistakes. However, we can learn from our mistakes and others’ – and capitalize on them. Making a few mistakes won’t inevitably result in failure, but refusing to learn from them most likely will.
About the Author
Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).
Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.
Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.