A startup can be a rough ride. You may have all the technical skills needed to launch and run your business, but if you don’t have the right mindset it could prove insurmountable. Especially when times get tough! I’ve spoken with many of my peers who tried launching their own companies and failed miserably because they never learned the most important lessons: what not to do, and how to stay motivated and focused through adversity. Some of these lessons were only clear in hindsight and that’s why I am writing this series — so entrepreneurs know what mistakes NOT to make! This is Part 1 – Developing the Right Mindset.
To start this guide will explore 10 pitfalls new founders encounter as they begin their entrepreneurial journey. These pitfalls are like landmines that lie in wait for the unsuspecting founder. Some of these pitfalls seem obvious when you read them, while others do not so much; however, all of them will take down your business if you’re not careful! One last note before we get started: all advice I give here is based on my personal experiences and mistakes (after all, startup founders know best what will kill their baby!). This has been a long time coming and I’m honored to finally bring this guide to our community.
2 Ways to Kill Your Business
1. Picking the Wrong Idea
The first step should be choosing a good idea for your product. However, this is where most entrepreneurs drop the ball! I’ve witnessed so many people begin their startup journey with an unfocused vision or even no clear goal at all. The best way forward is to choose something you are passionate about that solves a problem that feels personal (even if it isn’t). This will help you stay motivated through the long hours and hard work ahead.
As per Peter DeCaprio, it’s easy to get caught up in the excitement of starting your own business but you must remain focused on solving one specific issue; otherwise, you’ll lose steam halfway through your product development cycle because there was no clear demand. This is a problem I’ve experienced myself and many founders neglect to acknowledge the lack of market need. Keep it simple!
The best way to check if your idea has any demand is to do some preliminary customer development before you begin building anything. Talk directly with potential customers or users in your target demographic to see what they want or how they would solve their problems using technology. Another option is checking existing products that are already on the market with similar potential for growth—split test them against each other to find out which one outperforms the others in key metrics like conversions, user retention, etc.
Whatever route you take, make sure your product solves ONE specific problem really well so there’s always the next step for your users when they’re finished with your offering. If there aren’t, you have some serious reevaluating to do before diving further into product development—or consider changing the problem your startup aims to solve.
This is crucial if you want to avoid another pitfall: picking a product no one wants or needs!
2. Putting All Your Eggs in One Basket
The next pitfall I see entrepreneurs fall victim to is betting everything on their first great idea and not having a backup plan — or second idea — ready in case it doesn’t work out. A lot of founders drop out of college and take up their dream job full-time immediately after graduation because they’re so sure it’s going to be successful for them.
Those lucky enough (and smart) enough to have a steady income (i.e. parents) while their startup begins its ascent are usually more successful than those who quit their jobs at the first sign of success. The problem is that the majority of startups fail within the first year, and it takes another 2–to 3 years before you can expect your company to be sustainable without external investment. By this time, most college grads would be up the creek without a paddle!
If you want to succeed as an entrepreneur, you must make sure you continue living off your savings or start earning an income again if money becomes tight. You never know what may happen; there could be some unexpected expenses or maybe your idea just wasn’t as great as you thought it was/is?
Conclusion by Peter DeCaprio:
If you’ve just graduated college, do not quit your day job before making sure your idea is 100% ready. Once you’re successful and have the money, then go all in—but never before!