Mistakes are a part of life. It is important, in fact necessary, to make mistakes, and thus learn from the experience. However, when it comes to starting your own venture, making a few deadly mistakes can cost you your business. It thus becomes essential to learn from mistakes that other startup founders made. Here we are telling you about 5 mistakes that early founders make while starting up, and also how they can be avoided.
1. Focusing on raising money instead of getting customers: A vast majority of successful startups did not focus on raising money from the day one, instead they focused on creating a viable product that would help them gain traction in the market. Founders of Google, Sergey Brin and Larry Page, were very particular when it came to raising money as they did not want to lose control over their own company. Thus, even though raising money helps to grow your company, however, doing it earlier than required can have negative consequences.
A better strategy is to focus on gaining that initial set of paying customers to validate your product and grow through word-of-mouth advertising. It is true that certain start-ups need investment to build a viable product, yet focussing on building a minimum viable product (MVP) first before focussing on investors is generally a good idea.
2. Trying to do too many things at one time: Many early founders have this notion that a product with a lot of features is bound to be a success. I am not denying this as a product with a lot of good features might become a success, however, waiting too long to launch your product might hamper your chances of succeeding in the market. Further, a new startup would be in a resource constrained phase, thus, going broad and trying to capture all the demand might be a bad decision.
Customers prefer products that will help them solve a particular problem. Thus, the lesson is to stop looking at your product as a way to please everyone and focus on the thing that you do the best. Focus on your core product, focus on just enough features that are absolutely necessary to the customer. All other fancy features can definitely be added once you get that initial traction and a successful MVP.
3. Looking at funding as the only way to raise money: Funding from investors does not only mean more money to build your product but also decrease in your say when it comes to making important decisions. Further, the process of raising money can extend for months, often leaving the founder with less time to focus on his/her company.
A better decision when starting up can be to bootstrap, as it would mean retaining 100% ownership of the company and removing all the outside influences that affect your creative freedom. It also means that decisions and product innovations can happen at a much faster pace, and would provide the founders with a much more exhaustive learning curve.
4. Not focusing on statutory compliances: It is essential to keep a close eye on the laws and statutory compliances one has to follow right since the start. Most of the start-ups start as a private limited company, and thus makes them a separate legal entity which has to follow various legal laws of the region they are operating out of. Overlooking laws can result in penalties and lawsuits, which would impede your progress. Further, any organization following statutory compliances is seen as trustworthy by its clients and investors. It is our belief that one shall put extra emphasis on accounting and taxation.
5. Bringing onboard too many co-founders can create a lot of conflicts: The quote ‘Too many cooks spoil the broth’ actually makes sense in the start-up space too. More co-founders mean more time to make a decision, extra meetings and thus an impediment to the progress. The success or failure of an organization depends on the effectiveness and timing of the decisions made. It becomes essential to form a diverse founding team with different opinions which means building a start-up with 2 to 4 co-founders.
We hope you will stay away from making these mistakes.
If you are a startup founder, then apply at http://brandshoots.in/apply/, and let us help you in taking the big leap.
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