In the StartUp environment, it is easier to fail than succeed. For every Google, Amazon or Flipkart there are thousands of others who didn’t rise up to the challenge. Most StartUps fail as they commit serious blunders in their early days. Here are some of the common StartUp blunders and how you can avoid them.
- Long Wait from Idea to Launch
You have a Billion $$ idea and you are looking at creating the perfect product out of it. You go through several rounds of discussions, deliberations and track changes before you agree you have the right product for your customers. But there is a slight problem it has taken a bit longer than you expected and the market has changed or someone else has already come up with something similar.
As a StartUp, speed and adaptability are your biggest assets. You don’t need to go through layers of corporate bureaucracy to launch your product and hence should make sure you bring it out before the market shifts dramatically. This doesn’t mean you should compromise on the quality of your offering. But you shouldn’t let things like a proper office, the complete product offering, funding etc. delay your launch.
- Not Defining Clear Roles for Co-Founders
Startups aren’t born in boardrooms, they aren’t born out of a well-defined process and often born out of nowhere. And when you have a few co-founders not defining roles and titles would spell dooms for the future. Since co-founders are often known to each other (being friends, colleagues or relations) they may avoid this conversation in the early days thinking it to be rude and inappropriate. This often proves to be disastrous.
Everybody brings different skills to the table and fixing roles and responsibilities based on those skills is the ideal way to go about right from taking baby steps. The co-founders should clearly define roles and put them on paper as this would save them from ambiguity and disputes in the future.
- Focusing on Skills and Ignoring Culture While Hiring
The first few steps are the most important ones for any business and hence startups need to hire the right team. It is here that most startups make the mistake of choosing skills over culture. If things work according to plans, there won’t be any problems but if your employees look at the job just from the perspective of employment they would jump the ship at the first signs of rough seas. This often creates a lot of negativity and frustration among other team members and can bring down your idea like a house of cards.
Focus on the goals that the individual has and see if this blends with the culture you wish to have in your organisation. Is he/she willing to take the plunge and stick around in bad weather, work longer hours or even go out of a way to get things done? As for skills, it can easily be developed through training if you have the passionate people in your team. The team has to have a singular vision.
- Seeing Management as Just another Role
It’s your idea, it’s your company and you know how to manage it, right? Wrong! Management isn’t everyone’s cup of tea. While you may be the biggest motivation in your StartUp, that doesn’t necessarily make you the best person(s) to manage the show. Often poor management skills and in-apt corporate governance knowledge tends to put great ideas into a spot of bother. StartUps’ can grow fast and be trying to have an iron grip over the functioning of the company and micromanage every task can kill it.
You need the right person to run the company. It pays to hire a seasoned professional who would complement the co-founders in running the business while you work towards refining and redefining your initial idea. Recall how Google co-founders Larry Page and Sergey Brin hired Eric Schmidt in their early days as CEO and you would understand what we are talking about.
- Raising Huge Sums of Cash Too Early
Every entrepreneur has money on his/her mind. After all this money acts as oxygen for the idea to grow into a product and allows StartUps’ to realize their dream. Problems seep in when you raise too much money, too early from Angels and VCs and aren’t able to show them the promised growth. This is when the Angels and VCs would tighten the grip over management of your company and would alter your dream. They want strong ROI and don’t care much for your idea if it isn’t meeting expected results. Raising too much capital too fast would also require you to part with more equity for a lesser price.
In the early days, you must have your complete focus on maturing your idea so that it makes a grand entry into the market and becomes acceptable faster. You should look forward to raising the money to power the wheels of your company instead of bettering your individual lifestyle. In fact, when there are constraints it often sparks out creative ideas and betters your growth story. Make sure the goals of your previous round of funding have been met before you look for new investors.
Recall the first discussion you and your co-founders had. It would invariably be centred on your potential customers and how your products or service would improve their lives. Sadly many StartUps’ tend to shift their focus from customers when they are too engrossed in attracting investments, acquiring other companies or going on a brand building exercise. Customer satisfaction is similar to your foot on the accelerator; the moment it is pulled back your growth slows down.
Right from the day you launch your product or service you should always focus on your customers. If an investor’s ideas or suggestions would lead to customer dissatisfaction you should say no to such investments and look for money elsewhere. If customers turn their back on your company there is no way you would be able to create the magic you have been dreaming about.
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