A Startup Should Avoid These Common Mistakes

“The strategy is to first know what you don’t know, the tactic is to grind, and the value is to remember: there are plenty of places to innovate.”

— David Friedberg, founder of Weatherbill

Raising too much money too early

Ben Kaufman raised $1 million at age nineteen for his startup, Mophie, a quirky blog. Bootstrapping a startup is scary. No one likes seeing their savings dwindle. However, you shouldn’t rely too much on outside investors to take most of the risk. As founders, you may become careless with your spending. It also can dilute your stakes in the venture, making a future exit much less rewarding than it otherwise would be.

However, if you first pursue a startup on your own, you can work on proving the business model and gaining traction, all without the pressure of board meetings or investors looming over your head. Once you are self-sustaining, your investors may give you better terms. And, if an outsider isn’t controlling your company, you can exit whenever you want to. Plus, you’ll never have to worry that someone else with a vested interest in your startup will fire you.

Trying to do a startup alone and risking burnout

Startups are stressful. No one is good at everything, of course. To avoid burnout, you need a co-founder or advisors with whom to split the workload and in which to be able to confide. Plus, with other people helping you, there’ll be more money with which to bootstrap. Since startups take up a lot of time, it’s normal that you may wind up deskbound. But no one can do a startup alone. You will need to interact with people and take productive meetings to move your business forward.

Having too many co-founders

Starting a business with your three best friends may seem like a great idea. However, that means you’re starting with just 25% of the company before ever raising a round of financing. Plus, if you have four people calling the shots, it’s frustrating if everyone isn’t pulling equal weight. Most startups with multiple founders dwindle to one lead founder, anyhow. Think Facebook, Quora, Path, and Foursquare. Do a startup yourself, or with one other person that you know with whom you can work. Otherwise, you could wind up with a messy and expensive breakup.

“The secret to successful hiring is this: look for the people who want to change the world.”

— Marc Benioff, Salesforce CEO

Going out and networking too much

In the startup world, there are a lot of networking events and parties. You may network too much, and thus wind up not getting enough actual work done. Should you happen to be a well-known face in the startup community, it would be best if you tried to reach the right balance by spending more time at your desk. Otherwise, you may wind up sending the wrong message to your employees and investors.

Trying to proceed with a business that isn’t working out

You quit your job because you were sure you had a brilliant idea that would work. Only it hasn’t. So now what? First, you should never leave your job until you’ve had a chance to test things out and determine whether there’s a legitimate chance the idea will work out okay. But even so, predicting the future success or failure of your startup is very difficult to do. For one, you may have inaccurately predicted how people would put your product to use. Or maybe customers hate a new feature you love. That’d be more embarrassing than never having PR in the first place!

Summary

Try your best to avoid the common mistakes listed above when pursuing a startup. By doing so, you will significantly increase your chances of having success.

Bottom line: If you’re not at a stage in life where you’re able to take a risk, you shouldn’t be doing a startup. Otherwise, go for it!

“Don’t start a company unless it’s an obsession and something you love. If you have an exit strategy, it’s not an obsession.”

— Mark Cuban, serial entrepreneur, and investor

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Thanks for reading. Copyright Terry Mansfield. All rights reserved.