6 Common Mistakes That Startups Make

Also featured on the Startups.co website

Starting a business is not that easy, as it may seem on the surface. While launching a startup can be even more challenging. Apart from the fact that startup launch is a long and winding road, the majority of entrepreneurs have little to no earlier experiences in the business world. Except for an awesome idea, there are other complex aspects to consider, like recruitment, finance, legal issues, management, and so on.

We’ve heard that scary numbers that 9 out of 10 startups fail, according to Fortune Magazine, but what are these stats based on? The source is no stated, so can we believe it? Another example is The Huffington Post who declares that 95% of startups fail and again no reports or sources claimed. Does that mean that almost all new businesses fail? – We do hope not.

However, not all statistics are so discouraging. According to the US Bureau of Labor Statistics, over 55% of all newly-created businesses cross a 5-year threshold. Small Business Administration (SBA) states that around two-thirds of small businesses stay in business for 18 months and more. So launching a startup how to join the fortunate 55-60%? – We’ll share 6 common startup mistakes, ways on how to avoid them and stay afloat.

#1 Playing a lone hand

Playing a lone hand

There are several successful businesses that were started by just one person with its unique vision and strong technical skills to show it to the world. Amazon ($30.4 billion in revenue as of 2016 Q2) and eBay ($2.23 billion in revenue as of 2016 Q2) are probably the most inspiring ones. However, it is hard to establish a company when you are the only person involved. 

In most cases, it’s really daunting because there are ups and downs, to say nothing about some tasks that few can carry out alone. Moreover, there are diverse challenges that require flexible approaches, like marketing, product/service development, fund-raising, etc. To avoid a burnout, it is recommended to get a co-founder/advisor to share the workload.

#2 Creating a product by rule of thumb

Creating a product by rule of thumb

Drawing up a plan can be laborious and time-consuming, but without it - you’ll operate in the dark. Among the most important aspects of planning to cover are financial, business and marketing plans.

The solid plan also includes research of basic business idea and product market potential. Not every startup needs a formal document, but well-structured and clear business roadmap can help in those cases, when a company makes no headway or, on the contrary, embarks on a new venture.

#3 Taking wrong people aboard

Taking wrong people aboard

23% of startups fail due to lack of expertise, skills, motivation or shared vision within a team. Hiring the right people and at the right time is the top priority. If you start to hire people too early, then you risk exhausting your company financially. These days it is much easier to run a startup with subcontractors, freelancers, service providers (outsourcing/offshoring), etc. It is also recommended to keep everything documented.

#4 Dragging feet with launch

Dragging feet with launch

In this case, it is critical to strike a balance because timing is everything. Launching too soon can place the whole company at risk. Make sure that the product/service is stable, up and running, otherwise, users may disregard it and to win them back may be challenging owing to the poor first impression.

With the late release, you can miss your sporting chance of success. There is a risk that you’ll run out of cash, competitors will be first to introduce a product to the world, and so on. Delaying a launch because your business/product/service isn’t perfect is a major mistake because, at the long last, you’ll adjust your business strategy as you go.

#5 Ignoring (potential) customers

Ignoring potential customers

One crucial element of any successful marketing strategy is knowing who your ideal customer is (it is even better to name it). Market research will help to determine your target users, their possible reaction to your marketing activities, their interest area, habits, and so on.

Further users’ ignorance, tunnel vision and failure to gather customers’ feedbacks are the disastrous flaws of small businesses. Keep communication channels open (email, phone, social media, messengers, etc.), monitor your reputation, and listen to critics.

#6 Thinking small

Thinking small

In the business world, there are mainly two types of people, ones have both feet on the ground, while others have a head in the clouds. Successful startups employ both types to offset goals with capabilities. When you create something from scratch, it can be of any size you want. You’re only limited by your imagination.

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