Avoid These Common Startup Mistakes for a Successful Launch
When deciding to launch a startup in the vast skies of the business world, an entrepreneur has to be aware of and prepared for the possible turbulence ahead. Many founders are too busy daydreaming about how the startup will soar through the clouds of opportunity when, in reality, a few inaccurate moves can send the entire project crashing down as if it's a faltering plane.
A startup founder who aims for success must be a skilled pilot capable of cautiously navigating the product through the entrepreneurship skies and choosing the right startup pivot banking angles. But how can you steer clear of the hazards that can jeopardize success?
One of the ways to do so is by learning from the common startup mistakes other entrepreneurs have made in the past. Fasten your seatbelts and prepare for takeoff, as this page is devoted to closely scrutinizing startup mistakes.
Top 10 Startup Mistakes You Shouldn't Make
Whenever we encounter a big failure, all of us wish there were a voice that would have given us a heads-up to help us evade the trouble we've faced. And although there is no magic alarm signal that can warn you about every upcoming flop in business, there are several things you can do to safeguard yourself from taking the wrong turns or having a bumpy landing. Let's overview the ten most often made startup mistakes to avoid.
1. Lacking a Detailed Pre-Launch Plan
You probably wouldn't risk getting on an aircraft without ensuring that the pilot and crew have thoroughly inspected it before takeoff, right? The same applies to startup launches, as having a comprehensive and clear business plan lined out can guide the entire process.
What is your mission, vision, unique selling point, and value proposition? What are you striving to achieve, why, for whom, and how? How much will it cost, and how much do you expect to make?
Think about the appropriate tech stack and the optimal tools to use. Many hire a CTO to make such vital calls. Those who can't afford such a specialist full-time opt for outsourced CTO services and delegate these fundamentals as a task.
Consider how you'll market the product, and the other fundamental pillars of the solution. Consider this your "pre-flight" checklist that'll set the tone for the work ahead and get the teams on the same page. Plus, with all the project documentation in place, it'll be easier to undergo the technical due diligence assessment process when the time comes.
This regards not only the project execution strategy, though, but also planning the startup budget. How much do you need to go through the first six months of operation? How much should you set aside for unforeseen circumstances? Misjudging the "length of the runway" or underestimating your financial needs can lead you to colossal startup mistakes like a premature launch, poorly assessed market demand, or a badly chosen time to make an exit.
2. Overlooking Feasibility Validation and Research
Too many startups end up failing because they invest time and money into a product no one even cares about. What can be done to avoid such a mid-flight collision? Thorough hypothesis validation, of course.
Although teams may have many high hopes, you need to take the rose-colored glasses off and ensure that what you're planning to do stands a chance by going through proof of concept.
In-depth market research, competitor analysis, user interviews, and a detailed close-up look at the facts light up the lanes your startup will take off from. The specific types of market research to choose will differ from case to case, though.
Adopting a business approach based on testing, experimentation, and analysis will help you build and grow something great and get closer to achieving product-market fit. This is a surefire way to improve the offering based on feedback and data and make better calls on what to focus on, how to price and monetize the product, among other things.
3. Deciding to Do It All by Yourself
What else do startup owners do wrong? Well, even though flying solo works out for some entrepreneurs who launch their startups all on their own, being a one-man band is frequently too much pressure. This is why many prefer to have at least a "co-pilot" or co-founder onboard, gradually expanding the team with other must-have staff when necessary.
Surrounding the startup with diverse talent provides support and expert knowledge, implies shared responsibility, and allows to get things done faster. Letting go and delegating tasks to someone else might be hard, but it is a necessary step.
However, finding and recruiting great specialists who are independent and proactive to join the team is a time-consuming and highly challenging undertaking, particularly in the case of hiring developers for a startup.
4. Going Wrong with the Hiring Strategy
Continuing the previous thought, employing the right people to help you steer the project in the direction of success is a lot tougher than it may seem at first. Here are some startup mistakes with staffing that many entrepreneurs make:
- fail to find appropriate candidates;
- don't manage to convince great specialists to join a startup;
- rely on freelance workforce too much;
- end up spending more than they can afford on payrolls.
As you might have guessed, all that can lead to disastrous consequences. You need a well-trained crew that'll keep the startup going. But how do you form the team?
The freelance or outsourcing debate always continues for startups. Yet, it's crucial to keep in mind that the former path of finding someone on freelancer platforms may entail partial availability of individual contractors, which often backpedals fundamental processes and causes costly stalls.
To compare, employing people to an in-house development team can result in lots of upfront expenses for the company. This includes payrolls, computers, desks, rent, vacation time, sick leaves, and other operational costs.
What should startups do then? The simplest way out may be plain to see: teaming up with outsourcing partners or choosing to sign one of the MVP development companies. This allows for lending select specialists or assembling an entire well-versed and experienced team from the vendor's talent pool to help you with your project creation needs.
5. Ignoring Data and Other Signals
The cabin crew of an airplane doesn't ignore the weather forecasts, nor does it disregard the information and guidance given by the air traffic control. For startups, this analogy means that you have to be well-versed in startup analytics, which entails:
- paying attention to the target audience's needs and preferences;
- staying attuned to the changing customer demands;
- studying data reports and the dynamics;
- keeping an eye on the industry and market trends and the potential disruptions.
Constantly monitoring the product performance metrics and analyzing feedback is the smarter and safer business alternative to making guesses. By setting adequate KPIs and OKRs, tracking, and acting on the findings timely, teams can stay sharp on any warning signs, become better prepared for shaky storms, and avoid common startup mistakes.
6. Losing Sight of the Main Goals
At times, startups drift too far away off course, letting go of the major mission and vision. Investors or VC sometimes push startups to change beyond recognition, or customers might swamp the teams with their wants and suggestions. Both aforementioned outside influence scenarios may harm your startup branding.
Staying focused on the final destination and sticking to the plan may help avoid such business startup mistakes as months of aimless meandering and wasted resources. This explains why feature prioritization shouldn't be stowed in the farthest lockers. The goals and functionality release sequence have to be clear. Taking the strategic approach and giving your product development roadmap lots of time and thought leads to more coordinated and effective work with fewer resources put to waste.
Likewise, "overloading the cargo" will slow the aircraft down and make it sluggish, which means that startups shouldn't take on more than they can handle. Yes, customers may request a lot, but it's best to take things slow.
For this reason, many opt for agile MVP development when the product is released iteratively using the build-measure-learn rule. By abandoning or setting aside excessive features or services, startups get to gain altitude quicker in the competitive market. And thanks to this lean path, teams can save a lot of time, mitigate many risks, and cut costs.
In the end, this allows for the release of a product that truly brings value and resonates with the target audience. Without quality, no product stands a chance, regardless of size and complexity.
7. Taking a Hands-Off Approach to Spending Money
According to the recent startup failure rate, 9 out of 10 ventures shut down, and a huge percentage of them ceased to exist because they ran out of money. Securing a sufficient amount of funds is like making sure that your plane has enough fuel to be airborne.
You need to monitor your expenses at all times and always keep a finger on the pulse when it comes to allocating resources to sustain your operations. This includes anything from office space rent to startup digital marketing expenses and beyond.
The truth is that founders often overlook many opportunities. For instance, they can go "bargain-hunting" and get significant capital savings thanks to various startup discounts.
In any event, irresponsible overspending often leads to huge issues. Do you really need this shiny office space? Are you sure you're spending a reasonable amount of money on full-time positions? Are there things you can cut back on? It is wise to be careful with how you allocate your resources, even if it seems that you have plenty.
Note that the startup funding process is generally lengthy and complex. And no matter whether you'll apply for a loan or take a shot at pitching investors, convincing someone to give you more money is a stressful undertaking that doesn't always end the way you expect.
8. Not Filling Knowledge Gaps
It's absolutely fine for a startup founder not to be a guru in all business fields. But choosing an almighty smarty-pants attitude is one of the startup mistakes that often tugs the team to a disastrous landing.
Many problems can be dodged if the startup turns to the pros who know the ropes for advice and expertise. External knowledge can provide the sought-after guidance and help avoid dangerous maneuvers. This regards fields such as the tech side of the product, UX/UI design, legal matters, accounting and finance, startup equity distribution, marketing, business management, and others.
Where can such knowledge be obtained from?
- For example, you may search for advisors and seek assistance from domain experts individually.
- Moreover, there are plenty of startup communities that provide invaluable resources like guides, podcasts, downloadables, videos, tutorials, etc.
- Plus, some startups apply to incubator or accelerator programs. Best accelerator programs (like those run by Y Combinator) provide startups that make the cut with assistance, mentorship, and advice on how to embark on a journey that would let the startup soar higher on the market and outperform the competition.
9. Premature or Untimely Scaling
When attempting to navigate the treacherous skies of entrepreneurship, founders often get up to speed sooner than they should. This startup scaling move is just as dangerous as failing to grow quickly enough.
Of course, every company strives to escalate as fast as possible, but you have to keep in mind that you might have a plane at the moment, not a rocket. Following the safer route with classic startup growth strategies and focusing on quality could be ways to avoid common expansion pitfalls.
There's a similar situation with team scaling. When the startup undergoes a sudden growth spurt, and the team doubles or triples in a very short time frame, the processes have to be amended and upgraded to get the "aircraft's mechanism" going effectively. This includes how you handle communication, task distribution, onboarding, and many other subtle operational things that may seem insignificant.
For example, having an ineffective startup team structure results in chaotic and disorganized processes. People have to know who to report to, who is in charge of what, or who to turn to if they have questions. If the team handles communication in Slack, such a tool as OrgaNice can be very helpful in breaking down the team roles into a clear org chart, noting the contact details of each person onboard, and brushing away many organizational issues.
10. Being Careless About the Legal Side
Finally, legal inconsistencies are huge air bumps that startups should avoid at all costs. Rules are rules, and being reckless when it comes to startup incorporation and legal matters is just as risky as if you'd let the aircraft's crucial safety procedures slide.
It is important to take such matters as data security and legal compliance seriously, as otherwise, your startup can get exposed to heavy fines and serious implications. This includes how you handle your registration, bookkeeping, accounting, taxes, licenses, contracts, insurance, and documentation in general. So, it is wise to get a hold of the most optimal startup tools or find the people to handle these matters for you.
Final Thoughts on the Startup Mistakes to Avoid
Surely, launching a startup is indeed a thrilling adventure. It requires motivation and a lot of time and effort to invest. Nonetheless, without careful planning, detailed analysis of customer needs and market changes, as well as a skilled team, many startups come crashing down. Those founders who avoid the oft-repeated startup mistakes, stay focused, make data-based decisions, and learn from their failures have higher chances to soar the business skies and confidently reach new heights.
If you're ready to buckle up on your startup journey but need a trustworthy team to back you up, providing MVP development services for early-stage startups and helping them scale their products further is Upsilon's specialty. So feel free to reach out to discuss the project you have in mind!