6-Biggest Startup Mistakes Every Founder Should Avoid
Nearly 50 million new companies are started around the world every year; yet, the question of how many start-ups survive remains unanswered. If you are a first-time founder, there’s a very small chance that you will enter the big leagues. Multiple technological and socio-cultural shifts keep posing challenges to the overall functionality of start-ups. Being aware and on top of your product or service might be your initial priority but isn’t the only thing that’s needed to scale a great startup.
We all love having the founder prefix added to our social media handles. But trust me, the journey you would be embarking on is not going to be an easy one. It takes a lot of courage, determination, and self-motivation before the world starts knowing you as a founder. There are so many things to consider, plan for, investigate, and make decisions on. The worst part is that the pressure to get everything right can lead to a series of poor judgments or unintentional miss-calculated steps that can harm not just your business but also your brand.
6- common startup mistakes among first-time founders
As we try to delve deep and try to unearth a few of the biggest mistakes first-time founders make, we need to get a few facts straight. As a founder, you need to have your energy focused on gaining your customer’s trust. Why do people flock to big brands? It’s simple: they believe in them. Start-ups can make progress toward greatness if they have a satisfied and committed client base. Client loyalty is the driving force behind a startup’s success.
Having said that, it’s only natural to confront hardships and make blunders in your day-to-day activities. Let’s take a closer look at some of the common mistakes first-time founders make.
1. Trying to solve a problem that doesn’t actually exist
If the problem you’re working on is one that everyone else is having trouble with? Have you ever experienced the problem first hand and felt passionate about it? If your answer is no- then you need to rethink your whole business strategy and the road ahead.
If we look at Swiggy and Zomato’s use cases, they realized that food delivery via restaurants was very decentralized. At the same time, restaurants didn’t have access to a large base of customers. This problem prompted them to become a food delivery aggregator, focusing on both centralizing delivery for customers and improving reach for restaurants without having to build the infrastructure.
Carrying out an initial survey at the very beginning is essential as it ensures that the problem actually exists with others too. Ola’s immense success can be credited to its ability to quickly understand local dynamics and coming out with a solution that meets the needs of the Indian market. Flipkart is a huge success- thanks to its first-mover advantage in the Indian online market.
2. Not requesting customer feedback
It’s not just the product that you need to fall in love with, but also the user. If you have a few consumers on board, it’s critical to get them to leave feedback and gather data points so you can improve the product. Companies frequently discover after years that there is a flaw in their product or service, and this is when they lose customers.
During their early days, Airbnb had a solid plan in place to take feedback from their customers and their partners who were renting out their homes. Something that they still give a lot of emphasis upon. And the job is not complete here. You have to keep aligning your offerings to achieve greater customer satisfaction to survive in this competitive world. Trust me, Once you start connecting with your user, your product will be the best in the market and sure to get the love and affection of buyers.
3. Not choosing the right co-founders
Many Founders make the mistake of not choosing the right co-founder. The basic idea is to chalk out a plan to understand what core skills are needed in the business you are planning to venture into. Once you have the core skills needed to successfully run your startup, you need to match those skills with your co-founder.
Let’s say, for example, your area of expertise is sales and marketing and you want to open a restaurant, you’ll need a co-founder who has extensive culinary knowledge or has worked as a head chef.
It is also important to create the right system to offer equity to your co-founder. You really do not want to be in a situation where your co-founder is walking away from your project with enormous vested equities at their disposal.
4. Not matching your value, vision, and thought process with your co-founder
When you are up to building a business, you would know how difficult the entire process is. What is even more challenging is to keep it afloat. Co-founders who don’t get along, argue, drift away, and eventually split up are one of the leading causes of start-up failures.
Having an open and honest discussion with your co-founders is essential to have the same shared passion running all along across every business vertical. Having a casual dinner once in a while with your co-founder will help. This will offer you an open space where you can talk about any challenges, discuss if you are concerned about certain employees, the direction the company is taking, or any other that might crop up sometime soon. Discuss your worries, no matter how insignificant they might appear
5. Attempting to compete in an existing market
One of the biggest mistakes that we find pretty prevalent among new-age entrepreneurs- their attempt to compete in an existing market rather than building their own.
As a founder, you need to come up with a unique and most affordable solution for an expensive problem and not aim to be a clone of some incumbents. We can all learn from RedBus’ success story, which has changed the bus travel industry in India. RedBus’ enormous success can be attributed to its revolutionary concept of making bus ticket purchasing more convenient for everyone.
6. Being overly optimistic about revenue and growth potential
Due to the numerous hours of work that first-time founders put into their products, becoming emotionally attached to them is quite common. And it is ok. What is not ok is to become delusional about their businesses’ true financial potential.
Excessive emotional attachment leads founders to design products that they believe customers want rather than what customers desire, resulting in poor sales. Poor sales lead to a reduction in funds (and financing choices), which eventually leads to the collapse of a startup. Both before and after their products are introduced, founders should keep a realistic view of their revenue and growth potential. Knowing when to pivot is crucial to building a great company.
Nobody has the secret recipe that can set a founder up for success. However, you can lower the risk of failure by thinking and acting logically upon these six startup mistakes that most founders make. This will allow you to considerably increase your company’s chances of surviving and prospering in the competitive, ruthless, yet lucrative market.