10 Mistakes That Can Break Your Startup

So, let's get to the nitty-gritty of the mistakes every founder should avoid. First, the founders should be able to understand and learn from other people's mistakes. Life is too short to repeat the mistakes that somebody else did, which All you can do is just Google something, get on YouTube, like even if you're not watching this, find ways to understand who made the same mistake, what were the challenges they were going through so that you don't repeat them, you make your own mistakes. In order to help you do that, we're going to kind of dive into 9, 10 issues where you're going to understand the topics of common mistakes that founders are most likely to make. Step 1, life is too short to build something for nobody. If you fail to talk to customers, if you fail to understand their problems, their needs, their aspirations, you're going to fail miserably. And there are lots of stories where companies and founders have started building over an idea they had. They built, they built, they built, and all of a sudden They got this nice product out the door and nobody wants it. And it's a waste of time, waste of resources, and most importantly, waste of opportunities. Instead of building something that you don't have validation that's going to be needed in the market, all you were doing is like get into your head and try to build something in your head, which is the worst way to start a business. Talk to customers like a stalker, like a maniac. If you are able to build this repertoire of things you need to be doing in customer discovery, you're going to be building things people want. I'll give you an example.

We have helped a lot of technical co-founders over the years, a lot of academic-based co-founders over the years, and especially for research-based co-founders, they start with a research idea. They don't start with what is going to be used outside of the walls of the lab. So they start building, they start researching, and sometimes they stumble upon an idea that has potential. But instead of going to customers, if they stay in the lab and they keep on building for 2, 3 more years, they might be missing a lot of opportunities. A famous example is where they started doing research in one of the accelerator programs that we were doing when there were smaller and less able, competent startups that went into the market and understood from the market. They went to fabric manufacturing processes, they understood what the manufacturing processes wanted, and they provided a lesser quality product when this academic team was building something almost perfect. But by the time they finished their product, there was already a startup in the market and multiples of them in the market, and they were learning with the customer. Not in the lab.

So this academic team had a better product, but the factories and the manufacturing plants had already started using a technology which was camera and image recognition technology. And because they did provide a better solution, but not 10 times better, the startups that went ahead of them became more successful. If they have stopped and not wasted time in the lab, but went to the customers and understood what the customer really wanted, they wouldn't have built those amazing technology where it's currently being used for nothing. So go talk to customers. Second one is assuming you know what you need to be doing and you start executing your plan without validation. The first thing you need to do after talking to customers is understand the paths of failing and therefore understand the paths of learning. You talk to customers and you start giving them something. It may not work exactly as you think it will. It may not work exactly as the customers want it to work, but you will learn with the customer. You'll start shipping products and services, and that's a clear path of failing and learning. It's not a clear path of execution. So try to spend as much time as possible in the field with your customers delivering them some value. The common jargon for that is delivering them an MVP. You can do it as a proof of concept, you can do it as an MVP, you can do it as anything possible as long as you're interacting with the person or the group of companies or the individuals you're interacting with so you learn with them, you fail with them, and then you make your product better. Number 3, so you're done with the customers, you're done with understanding what you should be building and learning to fail, but you also need to understand And what is going to go and make you die, which is cash flow.

You could have revenue, you could have been a profitable company, but unless you're able to control your cash flow, you're dead. You'll go belly up like a goldfish in a bowl. The founders who are coming from engineering background or from any other background than finance always assume revenue is great, profitability is great, but they kind of forget the cash flow side of things. Cash flow is the only thing that will make you go belly up. You might be revenue generating, you might be profitable, but unless you manage your cash flow, how that revenue translates into cash, how are you paying your suppliers, how are you paying your team, you will not be able to survive at one point. So build good cash flow hygiene. Get banks to work with you, have lines of credit, but most importantly, understand that revenue and cash flow are not the same things.

1, 2, 3 is done. Maybe the most important one comes next, which is the team. You need to understand the success criteria of your startup relies on your team.

If you don't get a good team hygiene, if you don't get good team dynamics, and if you don't get the right people with the right culture to work for you, work with you, you're not going to be able to be successful. 50% of the startups fail just because somehow their founding team gets themselves into a crisis and they can't get themselves out of it. Before you get into the gritty piece of everything else, have a solid team and take good care of the team. Understand their needs, understand their issues, build strong moving organisms.

Founders— number 5, founders try to do everything themselves. At the beginning, you're the janitor, you're the CFO, you're the CMO, you're the guy who codes, you're the guy who sells. Maybe this is the only way to start your business or maybe you're just 2 people trying to do everything at once. However, it leads to burnout and it leads to a lack of focus and inefficiency very quickly. So learn how to delegate tasks. Use the Pareto principle and focus on the most critical 20% of the work, and the rest may have some troubles, but you can recover from them. Don't be a control freak founder. You read all these stories about Steve Jobs being very persistent on some things. He's fine, but he has the capacity of building a great team. Once you do that, you'll be more comfortable delegating. Not being flexible and not just having very narrow Mindset. That's mistake number 6. It's important to have a plan. Once you understand the customer and understand the roadmap and build a plan, build a team, you need the plan to move on. But also, it's important not to be able to disconnect from everything that's going on in the world. If you don't find time to look into the future, if you don't have time on your calendar to think about strategies for the next 5 years, next 10 years, or time to understand what's new happening in the technology space or in the customer space or in the market that you're going into, you'll fail in the long run. So stay open-minded, do not change course every 2 days, but try to understand what will be happening in the future to stay flexible. Number 7, ignoring direct feedback from customers. Your customers are the reason you are alive. They don't live because you exist. You live to serve them, to give them a product or a service. So every time you get the chance, go talk to them. You started by focusing on their problems and needs in the first place, but do not lose connections. I see a lot of founders, even large companies, force their C-level executives to sit on customer calls. In their call centers so they hear the problems firsthand. When somebody comes and gives them a call or sends them an email, be very mindful of what they're talking about. Maybe they're just going to be showing you a new trend that's happening or a new competitor that's moving into the space, and that's going to be very, very important. Number 8, yes, short-term goals, short-term gains are important, but without compromising revenue generation, you also need to focus on long-term growth. Long-term growth is not just planning into an Excel sheet and give 20% grow up like this. It is about understanding the changing dynamics of the customer need and building new product lines. You might have a very successful product and service, but always focus on trying to add new things, new products to make the most out of your efforts. Don't make the mistake of sacrificing long-term success just for short-term gains, and don't underestimate the difficulty on refocusing your company if you are only dealing with the short-term goals of the company. This is a very common mistake in large companies, especially when they IPO. They are bounded by providing quarterly financial results, so this is why large companies or companies who went to IPO, initial public offering, if you don't know the jargon, will have a problem with because in order to go long-term, maybe they need to sacrifice their short-term product development cycles. Mistake number 9, not building your thought leadership in the market that you're in. Yes, marketing is important. It's for growth. It's for sales. It's for revenue. It's for generation of resources, but Just being able to do good marketing doesn't lead you to become a thought leader in the industry or in the market that you're in. And you have to focus on thought leadership and understanding the ecosystem you're surrounding yourself, understanding the market you're trying to get in or you're already being an active player, and you need to direct that market. You cannot just do it with giving digital advertising budgets to Google, Facebook, and others. You have to be genuinely interested in what the market will look like in the next 10 years. This is very important in another way, not just for revenue creation, but also for talent acquisition. If you are perceived as a leader in a certain market, new talent will come to you. If you're able to provide, give back to the market that you're in, you're becoming a thought leader, you're creating directional movement into that market, New partnerships will come in. So it doesn't mean this is not going to translate into business results, but it's more important than just revenue generation items. Finally, number 10. This will well be number 1 because it puts you into the spotlight. Not taking care of yourself as a founder is the worst thing you can do. It's easy to become consumed by business, by to-do lists, by jobs, by hiring, by firing, by selling, by producing, By coding, but unless you take care of yourself both physically and mentally, you are not going to become successful because at one point your health will fail, your body will crash, your mind will be confused, you're not going to have the energy that will come internally and you're going to lose your movement.

And when that happens, Your company will start falling apart as well as you. There is no higher return investment that you can get in your business than doing consistent self-care.

In anything you are surrounded with, your body, your mind, your soul, you need to take good care of it, not only for yourself but for the people around you.

If you are kind of a leader that is hustling, the term might be very sexy to begin with, everybody thinks they should hustle too. Everybody starts working overtime, everybody starts pushing themselves, and then conflict will arise, unhealthy conversations will arise, and then the company will lose its health, will lose the people, and you're going to lose momentum. So, Focus on your health as much, if not more, than your business. Because if you're healthy mentally and physically, you will have more chances to recover if something goes wrong in the business. But if you're not healthy, then if something goes wrong in the business, you won't be able to have the energy or the mindset to make that right. So these are very common things that we have seen over the years.

And we helped founders with. Our mentorship practice focuses on these 10 and even more items where we go and it's like a checkup. We talk to founders, we ask these questions regularly, and we let them know that we're there for them. We can help with every one of these items, helping them understand if there are gaps in their knowledge. and actually helping them execute better plans if they need certain areas of improvement. So we're here to help them as the Brutally Honest Mentors. Just ping us up, talk to us, reach out, and we'll talk soon. Take care.