The following review will provide a number of examples that every entrepreneur should avoid when starting a business. Some of the exploits noted below parallel exits from work. With that in mind, we strongly encourage you to follow these guidelines carefully. Remember, it is better to be safe than sorry. Each of you should make your own decisions based on your due diligence and other critical factors.
1) Having one founder. Startups must have more than one founder. The reason for this is credibility. Having at least two founders helps diversify the business. It’s also nice if the founders come from different backgrounds, so each one has something different to add to the mix.
Furthermore, it can be difficult to promote investments with only one founder. With this in mind, potential investors may feel as though your ideas aren’t good enough. From a psychological point of view, when you’re involved in a startup, there will be more bad days than good days (yes we know, it’s a pity). Having another founder support you through days like these, and vice versa, is key. Brainstorming sessions are one of the best things about the early stages of a startup. It is impossible to describe in words the great satisfaction of coming together as a team with the perfect solution to a problem. Avoid Individualism – This kind of spirit doesn’t get you far. Team players are key, try to stay together as one and create an environment where everyone has each other’s back.
2) Wrong website. Location is key. If you are located in the middle of nowhere, it will be very difficult to not only attract talent, but also the investment that will help you build and launch your company. If you have a great idea and plan to implement it in the best way possible, try moving to a bigger city where more action is happening. At first, it will be difficult to get used to a new city and to all the new changes, but you can definitely believe that it will be worth it in the long run.
Some of the best cities to start a company are Silicon Valley, Boston, Seattle, Austin, Denver, and New York.
3) Doing many things at once. One of the biggest problems startups face is trying to do too many things at once. This leads to distraction and less focus on the tasks you need to get done. Don’t try to get big right away. Do a little something and make it better than everyone else. Once you’ve created your initial idea, it’s time to start adding new features. The easier you make it for the audience, the better; Otherwise, they will get confused and not understand what you are doing.
He remembers. There is nothing wrong with changing the idea you started with in the beginning despite what the market demands of your product. Some of the greatest projects didn’t turn out the way they were planned.
4) Recruitment C- Staff. On average, it can take two to three months to hire someone depending on your location. We advise you to check in 24/7 and never stop interviewing people. Talent is hard to find, but not impossible.
In case you are a startup involved in the tech industry, make sure that you are hiring the best programmers. Before hiring them, review the projects they’ve been working on, review case studies and ask for a first-hand account from previous clients. This will help you make an informed decision.
Furthermore, we recommend that you stay away from early stage recruits. They don’t care about your company as much as you do, and the only thing they’re looking for is their commission of 25% based on the annual salary of the potential person you’re trying to hire. That’s way too much money for a startup to throw out the window. Taking care of HR is a pain, however, someone has to do it. After all, this is your company!
5) Launching too early or too late. If a startup launches its project too early, there may be a possibility that the product is not completed and will not satisfy consumers. The main problem here is that if the project isn’t finished, it will completely shut down its users, and as a result, people won’t come back. On the other hand, you may encounter the problem of launching too late. Not only does this problem give the company a bad image, but because you haven’t been able to hit your milestones, it also creates a hole in the company’s pockets because keeping the lights on isn’t cheap.
From our point of view, go when you have something strong. Don’t plan to release the best of the best while waiting for this process to complete, start with what you need and keep moving forward.
6) Increase the required capital more or less. Startups make this kind of mistake all the time. Ensure that you have developed a detailed action plan that you update frequently and that you follow carefully. This business plan should be the company’s guidelines when entering a financing round. Track your money and know when your money is running out. Make sure to plan accordingly so that you can raise just a little more money than you need (in case of surprises) to carry your company through to the next round of funding.
7) Lack of budgets. When startups raise money, they sometimes forget that it’s very easy to burn money. While you may feel like you’ve got it all covered, that probably isn’t the case. There are always unexpected expenses that come along the way. With this in mind, we strongly encourage you to keep all expenses as low as possible. Try to negotiate every single invoice, and stretch it as far as you can for the sake of your company’s cash flow. Try to work with only the necessary number of employees. Another example of spending money could be moving into an expensive office space before the company generates any revenue. There are plenty of examples of startups blowing out their bank accounts by renting very nice offices..and the moral thing – avoid getting office space. Have everything start from your home if possible and only move into an office when it is the absolute last resort.
8) Investors lack knowledge and experience. Fundraising is a tough battle. Dead money is the type of investment that comes from someone who does not add value to the company. A good example of this is startups that only bring in any of their early stage friends or family members. This type of investor will not contribute to the motivation needed for a successful startup. This can also turn off angel investors and venture capital firms that may want to enter a later round of financing. Another tip is not to have a large number of investors in the seed round (first round of funding). Otherwise, it will go very crazy with the legal paperwork in the next funding round, and as a result the startup’s attractiveness towards venture capital and private equity will drop dramatically.
9) Arguments between the founders. There are many examples of founders fighting, which could result in the loss of a team member. Try to avoid quarrels, set guidelines so that you never get into a situation that is impossible to deal with. Ensure that your startup has a healthy work environment. Remember that startup life is very difficult, don’t add extra hurdles and always try to understand each other. As explained in our article “10 Must-Know Legal Tips for Startups,” an equity restriction will prevent the founders from exiting the company with all equity. Starting a company is not a joke, it is a long road to follow full of obstacles and darkness. Make sure you have a trusting and special relationship with the person you decide to share this journey with.
10) Lack of marketing. Your startup may have a unique product or platform, however, if no one knows about your product, it will be the same as it does not exist. Make sure to spread the word and reach as many people as possible. Discover the best marketing channels to reach the right audience. Keep in mind that print media or advertising is less influential than online resources nowadays. Anyway, as a startup, your company should not spend a lot of money on advertising.
