There are lots of articles and books written about the formula for start-up success, but start-up mistakes are much more consistent. These common mistakes will take even the best idea into start-up dead pool.
Getting rich quick only happens playing the lottery. If you are starting a company for a quick flip you are guaranteed to fail. If you suck all of the first profits into your personal bank account, you will fail. “Greed is good, " if your goal is failure.
Too Much Money
Flush with cash has put many a venture into complacency and on slow track to failure. Too much money often quenches entrepreneurial hunger, slows reactions, kills a sense of urgency, and can lead to a slow death.
Too Little Money
A lack of money can be just as hazardous. Lots of great ideas have certainly flamed out prematurely without sufficient funding. Given a choice, less is better, but none is certain.
Finding the right funding level is a balance between giving an start-up enough funding to test and adjust, but not enough to draw in laziness.
Believing There is No Competition
The number one lie told by entrepreneurs to venture capitalist. It is never true and believing it will get you beat every time.
When thinking about competition think about who is, who can be, and who will be. Create a plan for each. Put it in your business plan.
The buck has to stop somewhere. Business by consensus will fail. It will slow you, divide you, and end you.
A start-up never has enough resources to lose focus or direction. You need to constantly be focused on the market, not internally. Equally partnerships turn your company into an never ending board meeting.
No (or Weak) Leadership
Start-ups need passionate, benevolent, dictators. If that isn't you carefully select a partner that is. A young company needs definitive vision, direction, and tenacity to keep everyone locked into the same core success philosophy.
Weak leadership wastes time and money. Both guaranteed recipes for start-up failure.
Creating Products in a Vacuum
Products need customers and users. If you create without them you might as well not start. People buy when they feel valued, involved, and expectations are met. If you are developing only with internal requirement builders and product testers you will fail.
Big Customer Curse
A big customer can be very attractive and efficient for a start-up. However, you will forever be in jeopardy and the weight of that customer's influence can lead you out of the bigger market.
Release early and often. Perfection creates the “vacuum" effect, gives the competition time, and may lead you into a slow death march.
Cutting prices is a gut reaction to slow adoption or sales. Think about signals you are sending your market and the customer-Less Value Here.
If the market will not pay you what your product needs to yield to be profitable then cut it and make a new product.
Trying to Do it All
Focus is a start-up's friend. Trying to do everything well, as the old saying goes, will lead to nothing being done well. Remember, you only have limited time and money. Focus.
Bill Rice helps companies convert web traffic to buyers. He is a recognized expert, adviser, writer, speaker, and entrepreneur in online lead generation.
Bill Rice is passionate about the social web (social media), online community building, and creating online consumer experiences. Bill Rice regularly applies those passions to design and write money making lead generation projects for his clients. Tell me about your project at It's About Conversion ! or Urgent Leads .