Tag: Startup Mistakes

Top 10 Biggest and Most Expensive Mistakes Entrepreneurs Make in Startups
The road toward building and growing a startup is not a smooth one. One can always plan and prepare for every move in advance, but there will always be mistakes and hurdles along the way.

We might think that a person running a big successful business knows absolute perfection of everything. But even the biggest entrepreneurs commit mistakes now and then.

So, creating mistakes is always the part and parcel of any journey. However, sometimes, certain mistakes can be really expensive in startups and cause serious damage.

Many popular entrepreneurs agree that they have made mistakes in their startups that proved to be super expensive for them in the future.

Biggest and The Most Expensive Mistakes Entrepreneurs Make in Startups
Entrepreneurial Lessons From The Most Successful Entrepreneurs

Biggest and The Most Expensive Mistakes Entrepreneurs Make in Startups

Mistakes are not something that anyone makes on purpose, it just happens. It can be due to wrong decisions, judgment, or a move at the wrong time. Many entrepreneurs believe that the mistakes they made in their early startup stages turned out to be the biggest mistakes for them.

The most common and biggest mistakes entrepreneurs make in startups

Here are some of the most expensive mistakes entrepreneurs make in startups:

Not Hiring a Smart Team in the Early Stage

One of the biggest mistakes that entrepreneurs usually make in the early stages of their startups is not paying enough attention to great team building. Not hiring smarter people sooner in a startup hampers growth and progress of it.

It is not just the goal that is important but the team that makes it happen. Entrepreneurs often get absorbed in their purpose that they forget to keep their eyes open for the smart talent. This simple mistake turns out to be really expensive with the time.

Being Too Generous with Equity

Another big mistake that a lot of entrepreneurs commit in a startup is that they sometimes become too generous with their equity. Equity is not something that can be taken for granted, rather it is an asset to be preserved. Many entrepreneurs admit that it was the biggest mistake they made in their early stages.

So, instead of letting go of the equity in the employee equity pool, it is important to hold on to it for the right opportunities. Sam Parr, the founder of The Hustle, one of the most popular American media companies admitted that being generous with equity was the biggest mistake he made early on.

Samm Parr

Getting Comfortable After the Success

A quite common mistake and is sure to be the biggest is getting comfortable after getting the success. When entrepreneurs get to savor the new success, they either get motivated or comfortable with it.

Being comfortable might be good for a while but it turns out to be expensive in the long run. An entrepreneur might be able to generate a year’s money in a month and just get comfortable with it. But slowing down after that will only be an expensive mistake for the future of the startup.

Being Cheap

In the early stage of a startup, entrepreneurs tend to think that they can do everything on their own and save up money. Being cheap can be a huge mistake as it ultimately drops the quality of work and wastes the most precious thing that is time.

So, instead of always saving up money, it is important for entrepreneurs to spend the money wisely to get some real help from skilled developers, designers, and more. Distributing the work within a skilled team ensures great quality of work and better money-making capacity.

Trying to Force and Haste Things Up

This is quite a common mistake that everyone tends to make. There is no doubt that the competition in the market is massive and to keep up with it, entrepreneurs sometimes try to force and rush things up. It may work for a while but in a long run it turns true to the statement, “Haste makes Waste”.

This mistake’s result might not be visible immediately but it can lead to various hurdles along the way in the future. Doing the work quickly and forcefully can turn out to be one of the most expensive mistakes for any entrepreneur in a startup.

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Getting into Partnership

This is another mistake that entrepreneurs tend to make in startups. The road of entrepreneurship can be a lonely ride. So, to have a support system by their side, entrepreneurs bring in a new partner or co-founder without thinking much.

It is always better to partner with people who are already known and trustworthy. Having someone unknown leads to conflicts, and there is always a lack of trust, which ultimately hampers the success of a startup. Many entrepreneurs believe this to be an expensive mistake made by them in their startups.

Trying Too Many Things at Once

Entrepreneurs are known for their multi-tasking skills. But in many cases, they admit that this is a mistake that can be quite expensive for a startup. Entrepreneurs try to cover too many things all at once. This prevents them from fully focusing on one particular goal.

The most important thing is to always keep the main goal in mind and do things along the way. But when entrepreneurs start giving attention to too many things, they get distracted from the main goal, which makes for a really expensive mistake on their part.

Stressing Over Bad Outcomes

Another mistake that proves to be expensive for entrepreneurs in startups is when they stress too much over the bad outcomes. Many entrepreneurs believe this to be one of their biggest mistakes as it demoralizes them and ultimately leads to more negative outcomes.

Everyone needs to understand, accept and learn from their mistakes rather than stressing over them for too long. Stressing too much creates distraction, and burnout, and can lead to some of the biggest mistakes in a startup. If Elon Musk had stressed the failure of his cyber truck, he would not have been able to stay at the top till now.

Elon Musk Cyber Truck

Having a Rigid Vision

One of the biggest mistakes that entrepreneurs make in startups is being too rigid with the vision. Entrepreneurship is a process of continuous learning. Having a vision is essential, but not being flexible about it along the way, makes for an expensive mistake in any startup.

Running a startup is about continuous discussions, focus on new market trends, understanding users, taking in the feedback, and more. So, not validating the transitions and being rigid only leads to a dead end.

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Getting Professional Branding in Early Stage

Another biggest and most expensive mistake that some entrepreneurs make is indulging in professional branding even before the startup is ready for it. Creating a mark in the market with branding is important but spending too much on it in the early stage robs the entrepreneurs of the funds that are otherwise essential for the future.

Getting into professional branding too soon can be a huge risk that might pay off well or just turn out to be a horrible and expensive mistake for an entrepreneur.

Conclusion

The journey of a startup is full of highs and lows. There are days full of celebration of success and there are days full of regrets too. No matter how perfect the team and systems are, there is always scope for some mistakes to happen along the way.

The above-mentioned are some of the biggest and most expensive mistakes that entrepreneurs make in startups. One can always learn from these mistakes and try to avoid them as great entrepreneurs are not the ones who do not make mistakes every now and then but the ones who also learn how to deal with them.

FAQ

What are the expensive mistakes entrepreneurs make in the early stage of a startup?
- Not building a smart team
- Being too generous with equity
- Trying to force things up
- Trying too many things at once
- Having a rigid vision
- Getting into a partnership without thinking
What are some biggest mistakes that startups make?
- Obsessing over funding
- Waiting too long to start
- Losing focus
- Forgetting the competition
What mistake should small businesses avoid?

Small businesses should avoid paying too much for the services.

Do successful entrepreneurs make mistakes?

Yes, even successful entrepreneurs make mistakes, sometimes out of too much excitement or simply out of the wrong ability to judge the outcome.
May 3, 2022
Startup Learnings & Mistakes to avoid for 2nd Gen Entrepreneurs – from an Expert!

This article is contributed by Dr. Ambrish Kumar, Founder of Zipaworld and Group CEO, AAA 2 Innovate Private Ltd.

This is the age of innovations and new ideas are getting implemented at a very fast pace. The past decade has seen the emergence of Startups where we have seen a lot of innovators, first movers, and hustlers coming up with problem-solving ideas and causing disruption to a set pattern of the trend followed for years.

In other words, we have seen a new league of entrepreneurs who have a disruptive idea, USPs, strategies, a problem-solving business plan, but may or may not have the capital or funding, or may not belong to the traditional league of businessmen. We have also seen many investors and financers encouraging these entrepreneurs by funding their ideas and becoming a part of the disruption to the stereotype. We have seen the exponential growth of many startups to become Unicorns crossing the $1bn mark in a very short time.

India has seen the growth of Unicorns and with the current pace of new ideas being coined by startups and the response received from the markets and the masses, there could be more than 100 Unicorn companies in India by 2023. All thanks to technology that the pain areas are being efficiently addressed by digitization and automation. When we speak about the emergence of startups, we have to see the flip side of the coin as well.

Also Read: Top 7 Ways to Create a Buzz around your Startup

The pandemic that started in 2020 was unexpected and unprecedented and caused massive disruption to whatever was normal before that, and the new normal came into existence. Businesses and entrepreneurs globally have faced severe turmoil in their routine operations and have had to make acute decisions to get hold of the situation. All grades of companies, be it small or large, were forced to take desperate measures of survival and sustenance. Cash flows were hit badly, debts increased, receivables were stuck or delayed, investments went wrong, and so on.

As per a survey conducted by FICCI during mid-2020 with 250 start-ups and incubators considered, almost 70% of startups were adversely hit by the pandemic, approx. 12% had to shut down operations, and 68% had to cut down on their expenses. The adverse situation compelled investors to hold investments that were signed pre-pandemic.

This ought to be the learning curve for the entrepreneurs to approach odd circumstances like the post-COVID times differently and more effectively. The entrepreneurs are now getting cautious about what to sell and what not to, that is, to re-invent their business strategies. Hence, the entrepreneurs need to filter out their products and services precisely focussed on the need of the consumers.

The Pandemic has impacted the funding, investments, cash-flows, timelines, schedules, and also untimely non-availability of raw materials, labor, logistics delays, the lower purchasing power of consumers, etc. In these times, focussing on products that suffices the necessity, would sell. The entrepreneurs need to be more generous in setting realistic timelines and keep a balanced check on cash flows. Fund-raising and investments have taken a back-seat due to the prevailing circumstances and may take another couple of years to come back to where it was pre-pandemic. Mr. Alex Lazarow rightly puts it in the Harvard Business Review article – “Startups, It’s Time to Think Like Camels — Not Unicorns” which means entrepreneurs need to disguise themselves as camels which can survive in worst scenarios, for the next few years, then aiming to be ‘Unicorns’.

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The change in mindset and trends may see a deceleration in the rapid scaling up the process by the means of fundraising. The startup trend of burning cash to capture the market needs to have a new dimension. Entrepreneurs and survivors might take a balanced, steadier, and smarter growth path. The endurance of the concept and problem-solving ability of a start-up would play an important role in retaining customers. Marketing, virtual omnipresence, and brand identity will play a significant role in the present times. The more constructive and cost-effective e-commerce solutions, digital marketing, web services will be resorted to extensively, rather than the traditional marketing drives. Further futuristic aspects of technology Machine learning, Artificial Intelligence, IOT, will help anticipate and keep a check on adverse scenarios and will also help in comprehending demand prediction and anticipation based on data analysis, and to cater to customers’ needs more precisely, thereby mitigating risks and avoiding wastage of resources.

October 4, 2021
Startup Mistakes to Avoid & Learning from SleepyCat’s Founder Kabir Siddiq

This article is contributed by Kabir Siddiq (Founder & CEO of SleepyCat). SleepyCat is India’s Premium D2C sleep solutions brand.

Right after college, I (Kabir Siddiq) was looking to pursue a career in Finance and Banking. I found myself following the crowd. During the initial phase, I worked with Deutsche Bank in the Investment Banking division. Though I thoroughly enjoyed my time there, I always had the desire to do something more. I was keen on pursuing the Entrepreneurial route and building something meaningful. I didn’t want to stick to a traditional job role throughout my life. I really wanted to create, Innovate and develop something of my own. The idea always excited me.

The Journey of SleepyCat began when I entered the old and unchanged mattress Industry. I realized a big gap existed in the market between manufacturing a mattress and eventually delivering it to a consumer. This long chain; mostly distribution, logistics, warehousing, and retail, severely inflated the price of a mattress without reason. In addition, the quality and structure of a mattress being sold at a price like that were nowhere close to being comparable or justified! To top it all, mattress shopping was troublesome with so many unnecessary choices. We wanted to simplify this and make the process of mattress shopping fun and easy while delivering a world-class product through just four simple clicks! Four years later, we have achieved a great product that can be seen with our mattress being the highest rated in the country.

The journey from then to now has been riddled with a path of making mistakes and learning. It’s all about constantly improving yourself, the product, and the team.

Here are some of the things I learned during my Startup journey.

Always have a plan

While this may seem like one of the most basic pieces of advice, it is the most important to heed. Map out a business plan that outlines your objectives, costs, anticipate the results, and always work towards a goal you have to achieve. Goals help you align your focus towards success. Stay organized towards your goals.

Here’s an Ultimate Guide to Writing a Business Plan.

Don’t do everything yourself

It’s great to be independent, but never at the cost of your business. Surround yourself with the right people who can consult and steer you in the right direction. This is highly important for aspects that require technical expertise which help scale your business operations.

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Choose the right investors

Once your product or service has seen steady growth in the market, select the right investors who will boost your business. Your first set of investors will make it or break it. Investors are more than financial support, they place their confidence in your business potential.

Listen to your customer

The customer may not always be right, but they’re ultimately the ones with the purchasing power. Always listen to their complaints, suggestions, and feedback. This leads to building credibility and trust among your customers, it also helps you understand the iterations required to create a product fit for your target market.

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Never undervalue your products

Today’s internet-savvy audience is well-read and researched. They’re looking for good quality, durable products. Create and price your products according to their needs. Choose the best quality raw materials, select the right pricing & value your products at a cost that is affordable.

Also Read: Top 9 most common pricing strategies employed by business

A successful startup is not built within a week, it takes months, sometimes years, of learning to reach the pinnacle. Hire the right set of people who help your startup grow, consult mentors you can lean on, and most of all accept your mistakes! Mistakes are inevitable, learn to adjust your expectations and move on from them. Never be afraid of failure, keep trying, and always innovate.

October 1, 2021
Startup Learnings from a Serial Entrepreneur, Gaurav Singh

This article is contributed by Gaurav Singh, Founder & CEO, Verloop.io

Gaurav Singh is the founder and CEO of Verloop.io, which is a leading customer support automation platform. Singh knew early in his life that entrepreneurship was his calling. Coming from a humble background, finding his footing was not an easy task. However, despite the obstacles in his path Singh tasted success right from his first venture.

He is a serial entrepreneur and shortly after his first company, GoDeliver was acquired by MagicTiger, Singh founded Verloop.io in 2015. Singh had observed that the biggest challenge that tech companies face in this age of instant gratification is engaging customers and building loyalty. As per him, these challenges become even more pronounced in the markets that are mature. Verloop.io was established with the objective of bridging this need gap.

During the course of his entrepreneurial journey, Singh had to face challenges that almost every start-up has to go through. Here are some of the learnings that he has picked in his journey –

Work on the core

He believes that every entrepreneur should build their core team early. Most startups put off hiring till they have found a footing. While some believe that this may help them save costs but it may not be the right move as the founder may end up micromanaging everything or have no time for the big picture stuff. As per Singh, it is better to have specialists for every function that can help the founder to decide the best course of action. A good team is also a great asset to bounce off strategic ideas and decide the best course of action. Here’s a guideline on how to build a great startup team.

Time is of great essence

Most entrepreneurs are in a rush to make a mark. However, there are times when it is best to have patience. Singh believes sometimes the only thing missing in cracking a problem is time. Given enough time and resources, every problem is solvable.

Know which problems to pick

In a startup, there are always a million problems to fix. However, if the founder goes about solving each of them, then his team and his product will be headless. It is thus advisable to choose the problem/problems that deserve attention and solve them well.

Also Read: 8 Best Time Management Tips for Startup Founder & Business Owners

Employees and Customers are your biggest stakeholders

Another key learning that Singh shares are that in a startup, the goal should be to build for the customers as well as the employees. In his opinion, most times startups end up ignoring employees, which has a hugely detrimental effect across the organization. He believes that the founders should ensure that their employee experience and customer experience is top-notch.

Hire, train and scale

Everyone that is hired may not fit the bill 100%. Hence, organizations need to build in processes to help people reach their potential. Onboarding and constant learning can help employees to scale to become the leader in their field. Companies need to nurture the talent and put in practices that inculcate a culture of learning.

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Data-driven and experience led

A mistake that a lot of startups make is that they are driven just by the data. While being data-driven is good, but most of the times data may not paint the whole picture. Hence, companies need to make some bets with experience and intuition and back it with data.

October 1, 2021