What are avoidable mistakes that first-time entrepreneurs make repeatedly?
- Stop drinking your own kool-aid.–If you are not brutally honest with yourself, you can’t make informed decisions that will truly improve your company. You will hide behind excuses and spin stories to yourself explaining away why you have to keep doing the rest of the things on the list. You can’t believe all the stories you tell. You need a healthy dose of skepticism (not the same as self-doubt or lack of self-belief) to make real forward progress.
- Stop being so busy all the time.–Does an early stage startup founder really need to spend time evaluating every HR alternative instead of focusing on customers and product? Some people think that being the CEO means being involved with everything. But what they are really doing is getting in the way and usually just slowing down progress. Surround yourself with smart people and delegate delegate delegate. There are only a few things you should not delegate in the early stages of a business like customer engagements, raising capital, and finding product-market fit.
- Stop working yourself to death.–As the founder, you often feel like the world is on your shoulders and you have to be working 100 hour weeks to set an example for your employees. Startups are a marathon, not a race. The average successful exit takes 7-10 years. If you don’t take time for yourself and take care of yourself, nobody else will. Relax, take breaks, take walks, take days off, get massages, pamper yourself. You can’t take care of others if you do not take care of yourself first.
- Stop half-assing it.–On the other hand, I have tried countless times to build a startup idea as side projects, and it doesn’t work. I am not saying that it is impossible to start a startup on the side. I am saying that to make a real play at doing something investable, you are going to have to make the leap and do it full time sooner than you will feel comfortable doing so. It always works this way. Nobody will invest in you if this is not what you do all the time, no matter how good the idea is.
- Stop hiding behind fake traction.–Founders often highlight what looks good and hide what looks bad. This is fake traction. Like: “All of my users love my product!” Sounds great, but if you only have 12 users, your sample size is two orders of magnitude too small. If you find 1000 people who can’t stop talking about your product, you are on to something big. Or another is “I have 300 people on my waiting list to buy my product!” Awesome, how many of them are willing to pay you for it up front? None? Haven’t even asked yet?
- Stop counting your eggs before they hatch.–An investor who expressed interest in investing but hasn’t called back in a few weeks isn’t money in the bank. Close close close. Convertible notes aren’t perfect, but at least you can do a rolling close cheaply. A potential customer who says he may pay if your product did such-and-such is not money in the bank. Close close close. What will he pay for today?
- Stop trying to get around paying lawyers.–You are running a complicated legal entity that may take funding from individuals and VCs, and could eventually IPO or be acquired. This is not a mom-and-pop business, LegalZoom and RocketLawyer are not good enough. Do it right. Don’t even try to out-smart yourself here. Expensive in the short term? Yes. Worth it in the long term? ALWAYS. Your future self will hate you if you try to save too much money here.
- Stop trying to serve two kinds of customers.–You can’t do two things great. You don’t have the time, money, or resources to figure out the product-market fit for more than one product doing one thing. It is always so enticing to try to follow new opportunities that come up, but don’t fool yourself. You can’t be great executing two go-to-market strategies at once. The split focus will mean you will be at best mediocre, but probably terrible at both. If you really think the new opportunity is better, pivot the company and go all in.
- Stop believing that your product is your company.–Your company is the value your provide to your customers, not your product. Often your customers couldn’t care less if what happens behind the scenes was done by the best Scala code in the universe or a thousands monkeys … as long as it works reliably and timely. Your customer value and your team is your company, not your product. Focus on making your team happy and your customers happy and all else will follow.
- Stop avoiding your customers.–How long has it been since you last talked with a customer? On the phone or in person? Not to sell them stuff. Not to offer support. To listen. To build your relationship with them. To ask questions. Please don’t tell me it has been more than a week or two. A founder, and especially a CEO, has no excuse not to be in continuous communication with customers. Don’t have customers yet? Call your prospects.
- Stop avoiding your team.–There are often times you want to curl up and cry, but a leader can not hide behind his desk no matter how much he might want to. A leader must be visible in good times and in bad. Especially in bad times. When a child is scared and hurt he needs his parents the most. Your team is your company, keeping them happy is one of your top priorities.
- Stop pretending to be superman.–A leader doesn’t need to be perfect. Don’t pretend that everything is always fine and that you never make mistakes. You might think it makes you look strong and brave, or makes people look up to you. In reality, it comes off fake and inauthentic. You don’t have to flaunt your failures, but hiding them is unnecessary too. Just talk about them honestly and ask people how they think you could improve.
- Stop being so secretive about your idea.–You may be scared someone will steal your idea. Don’t. Just don’t. Such a beginner mistake, not even an amateur mistake, it is just a total rookie mistake. You will never find product-market fit by keeping your idea secret until it is perfect. You need to talk about your idea. A lot. To a lot of people. Because honestly, your idea probably sucks just as much as you are secretly afraid it might. One of the reasons many founders are so secretive about their ideas is because they don’t want to be told it is a stupid idea. This is just denial. Don’t be in denial. Anyhow, the people you are so afraid will steal your idea are too busy working on their own big ideas to steal yours.
- Stop falling in love with your idea before product-market fit.–“The counterfeit innovator is wildly self-confident. The real one is scared to death.” –Steven Pressfield. The more confident an early stage startup founder is, the more concerned I am for them. Of course they can’t just go around telling people they are scared to death all the time. But when you are an early stage founder and really in love with what you built, you will never seek the changes necessary to really make your product great. Read the to get a great example of a team who wouldn’t stop until they really found product-market fit. If their love of Burbn (predecessor to Instagram) had held them back, they would probably be out of business by now.
- Stop ignoring marketing.–Even before you launch your product, you should be marketing. By marketing, I don’t mean press releases and media attention. The best marketing is word-of-mouth. Getting people to talk about you. You only get word-of-mouth by creating real fans. You create fans by adding real value to people’s lives. You can add value to people’s lives in many ways besides your product or service. You can write tutorials and provide useful blogging content that isn’t directly related to your startup at all, but related to your industry. Some excellent examples of this include from 37signals, and . Create fans, not just users. Most startups don’t even try.
To be Continued