Over the past four years, we’ve witnessed and seen many startup failures. In December 2017, we even wrote about: Tech startups that failed in 2017. All too often, startups fail because they try to sell something that nobody needs or wants. Properly positioning a product/service in the marketplace and messaging to the right audience is crucial to avoid costly startup failure.
Every day, we read stories of how many startups bootstrapped their ideas into multi-billion companies. Sadly, nine out of ten startups will fail. This is a hard and bleak truth. According to multiple reports, 90% of startups fail partly because of some of the common startup mistakes.
However, new entrepreneurs and current startup founders can improve their chances of success if they avoid some of these costly mistakes. In this article, we also want to share with you what you need to know about the 10% of startups that succeed.
Before we dive right in. I think a good analogy would help. Since most tech startups are founded by geeks, a great analogy that comes to mind is a software architecture concept called “AntiPatterns.” AntiPatterns are common solutions to common problems where the solution is ineffective and may result in undesired consequences.
In general, AntiPatterns are a list of bad patterns used in software design or architecture, documented in the form of lessons learned. Jim Coplien defines anti-patterns as “something that looks like a good idea, but which backfires badly when applied.” The same can be said of startup founders who think they are doing the right but in essence destroying their chances of success.
That being said, below is an infographic of the top 10 startup mistakes and how to avoid them. Hopefully, we can all learn from the mistakes of others and gain insights and wisdom from other successful entrepreneurs who had traveled the road before us so we don’t repeat the same mistakes they made.
Top 10 Startup Mistakes
1. Building something nobody wants–Your product doesn’t have a market or the market is not ready for your product.
2. Poor hiring.
3. Lack of focus.
4. Failure to execute sales and marketing, which may include a flawed pricing model.
5. Not having the right co-founders or team–You are not working with the right people or team.
6. Chasing investors instead of customers.
7. Resources dry out and not making sure you have enough money.
8. Spending too much money, too quickly.
9. Failure to ask for help.
10. Ignoring social media–the days of legacy media are long gone.
In addition, one other biggest mistake most founders make is failure to research the product or service they plan to build. Some skip the research and just move from idea to implementation without due diligence about the competitive landscape of the industry they are getting into.
Overvaluing customers’ feedback and poor hiring decisions are also some of the mistakes new startup founders make. Some founders also scale too soon. Above all else, do not forget about marketing. We’ve seen a lot of great startups, with great products, but no one knows their products even exist in the marketplace. It’s not just about the innovative technology, it is about getting your products in front of your target customers. Do you have any additional items to add to the list? Please email us. We hope you find it helpful as you continue your startup journey.
Credit: 100FirstHits.com
Below is a bonus video from UC Berkeley about the top 10 mistakes new entrepreneurs make. This video was made in 2016 but the ideas are timeless. Guy Kawasaki is the former chief evangelist of Apple and co-founder of Garage Technology Ventures. In this video, he explained the top ten mistakes that entrepreneurs make. His talk covered all stages of a startup from inception to exit.
