It is a really tempting thought to start our own venture. We become the boss with no one to ask to come on time, being accountable to none, and people working under us. If you are thinking this way, you might already have committed some mistakes which new entrepreneurs, in general, commit. For every successful business that exists, there are learnings, losses, and luck, that were involved. The first thought that must have come to your mind is, “How do I manage with my luck?”
Let’s look at the top 8 mistakes that new entrepreneurs commit, which stops them from being the next Zuckerberg.
Know the Top 8 Common Startup Mistakes Entrepreneurs Must Avoid
1. Quitting their “asset” creating job the day they take entrepreneurship
The most important lesson of finance and economics involves learning ‘financial management’. It involves investing in an asset creating backup. Nowadays, young people with the zeal of making it big in the entrepreneurial world quit their job as soon as they bootstrap their new venture. Without getting the taste of the first profit, they end up with mortgage, some liability in the form of ‘assets’ they bought for the new startup, and eventually get demotivated. This is because they are unable to cope up with the lack of funds, which didn’t bother them while they were still earning.
An entrepreneur is one who has some sources to fund his/her idea, and not someone who blindly dives into the pool of his idea because they are just ‘confident’ about it. Calculated risks are important, but not at the risk of financial management. Make sure that the new venture gets the initial seed funding which gives you the liberty of trying brains without worrying about the finance. In case you don’t get some seed funding, be a miser and spend on the most important stuff initially.
2. Spending a LOT or spending TOO LITTLE
Currently, companies like ed-tech startups like Unacademy and Service startups are not making even 10% as revenue for what their investors have spent on them. But does that mean that the investors are not well-versed with the idea of the startup, or is because they have faith that it would eventually turn into a profit making venture?
It is because these startups are not only relying on the content they provide, but also spending money on Big Data and other technologies to give a different user experience to their customers. They are spending money on getting the right human resource onboard.
While some entrepreneurs spend a lot of money, some of the entrepreneurs spend too little. Trying to find the ultimate ‘jugaad’ to cut on the spending, or because of fear of decisions failing are some reasons why they spend so less.
But just because the recent past has seen some bad decisions financially as an entrepreneur doesn’t mean it’s time to quit. Rather, it should be taken as a learning experience. As mentioned above, taking those calculated risks with finances is necessary, especially when it is time to spend on real technology or human resource.
3. Trying to replicate the model of an already successful startup
All that glitters is not Gold. We have all read big valuations of the company on entrack, and we feel that it would be better to make some changes in the idea and start our own venture by getting some finances.
But unless the idea fetches revenue, it’s futile for the new investors to put their money in.
As a new entrepreneur, it is important to remember that ideas can be taken as inspiration, but not replicated. The same destination can have different paths, but what stands out is the efforts an entrepreneur puts in for his/her own path and tries to turn it into the right path.
4. Not preparing for the initial ‘selling’
If an entrepreneur cannot sell his idea to the investors, how can he expect to sell his product? From the initial step of selling the idea to the potential investor, an entrepreneur moves to selling his first product to the customer, and the recruits in the journey till the unicorn club.
Many times, entrepreneurs have to depend on their own savings because they are not verbal enough to convince their idea to the investors. While it may not be a bad thing, it is believed that the one with ethics always puts in more effort when someone else’s money is involved.
So, it is really important as a new entrepreneur to focus on pre-sales, post sales, or sales in general.
5. Not doing adequate research of target audience
An entrepreneur needs to find the most relevant niche with the least competition when he enters the market
For example, as a blogger, ‘10 things we are sure you didn’t know about Dogs’ would fetch lesser organic views as compared to ‘10 things we are sure you didn’t know about Labradors’.
As an entrepreneur goes niche, the most targeted audience visits them. But this requires a lot of research. For example, it would require a lot less work to research on specifics of a ‘Dog’ than it would to research specifics of a ‘Labrador’. David Garfinkel, writer of the book ‘Breakthrough Copywriting’, one of the best sellers in the genre says, ‘you need to delve into the shoes of the customer, and make sure you go back to the phase where you had no idea about the product you are going to sell, or the idea itself.’
This way, an entrepreneur can try and find the most common challenges that people are facing and hence make amends to the product to find the best bet for the customer.
6. Lack of focus on human resource
It is really important for the entrepreneur to treat the ones getting the job done for him well.
For example, if the idea is to build the best online education portal, but the educator is not given enough time to prepare for the next lecture, chances are the product’s quality would be compromised in the end.
An educator needs time to regain the creativity within. An educator cannot do sales job – that’s for the sales team to do. He can make good lessons though.
Thus, it is really important to have dedicated recruits for different departments. While initially, things might have to be managed, but when time arrives and funding too, it is important to spend more resources on manpower. This shouldn’t come at the cost of compromising the already well-performing employees.
7. Keeping Optimistic Targets
Goals can be achieved if they are practical. While certain targets cannot be compromised, it is also important to make sure that the targets kept for the employees or for yourself as an entrepreneur, is achievable. If things didn’t materialize as planned last week, it means it’s time to move to the next target and keep the pending work for a spare day.
It is important to be on toes, but achievable targets make the journey more fun, and gives a clarity of thought.
8. Fear of losing – again!
This is some mystical and spiritual, but still has matter to it. It involves attracting the things we believe in towards ourselves.
If doodlecollection.com would have thought about quitting, because they didn’t know ‘doodles’ could be sold online, they wouldn’t have made it this big.
It’s important to believe in the idea as an entrepreneur. While all the practical gyan talked about in the above points is important, the fact that we manifest energy we give to nature cannot be denied. It is really difficult for others to believe in your product, if you yourself don’t believe in it. Everything that you’ve desired for wants to come to you, you just need to call it towards you.
It’s not being an entrepreneur. An entrepreneur without mistakes is no entrepreneur. Mistakes are the part and parcel of life and helps make one Mark Zuckerberg and the other Elon Musk. The idea is to always improve with each mistake – after all, that is what we intend to do as entrepreneurs.
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