Written by Serene Huang
- Simply believing that the idea will be the next unicorn. A lot of failed start-ups started an idea based on a strong instinct that once you get the website on, there will be demand for the products and services provided. They did not understand that a detailed competitors’ analysis is as important as the product offering and the right pricing. Is that the right target audience? Is the idea big enough to capture the required market share? Is it innovative enough? Do most of the people you speak to love the idea and concept?
- Thinking that there is no need for a business plan. Most of the time especially when founders have the startup capital in hand, they find writing a business plan time consuming and not as effective as trying to launch the idea. This can be a costly mistake as there will be many questions left unanswered. If you have tough time writing the business plan, it means you have not done enough work on the idea!
- No idea how to allocate the funds accordingly. When start-ups received a big sum of money from venture capital firms, they immediate thought of hiring and expanding. This will run through the money too quickly overtime when they did not consider the outflow and inflow rate. Can the business run in the long term? Is the capital raised enough for the growth plan? Is the business model sustainable?
- Saying that whoever has money is your target audience. Understanding the niche target market is as important as selling the products or services to the population. If you did not pinpoint whom exactly you are targeting, you would be compromising on your brand story as well as the marketing efforts. Knowing where to start and how to angle the launch will help you understand why you started on the idea in the first place!
- Listening and doing whatever the investors say. Bear in mind that investors are mostly concern with their investment returns. They will push you to bring in revenues too quickly and sometimes even trying to takeover the company by coming out with rules for you to follow! Understand that you are the founder of the company and you are the one with the right long term vision and learn how to stick with it! Giving up too much equity stake while trying to raise initial funds can be risky in this case. Even if the company is making money, you might find yourself losing out because the investors are taking away the biggest pie.
- Fighting with your co-founders. Never enter a business together with someone just because of different skill sets. Always know that you like your co-founders as much as your family members because these are the people you will be working with for a long time! In most cases, the business plan and concepts are disrupted just because co-founders fell out and you simply don’t have too much energy and time to deal with the extra emotional stress.
- Placing too much importance on generating profits as compared to acquiring users. We know cash is king but we also know some unicorns with high valuations and zero profits! What is your business model? Do you want to start earning revenues from the beginning or do you have enough money to “burn” while acquiring enough users to attain higher company valuation?
- Either ignoring or obsessing over customers’ feedback. Always listen to what your customers want but never try to change your business model around what all the customers want! We know that it is impossible to please everyone and that you should only try as best as you can. Not placing importance for feedbacks is also a horrible idea! Getting constructive feedback and repeated customers are definitely time well spent! At the end of the day, customers are the ones generating revenues for the company. Treat them right and everyone will be happy!
- Hiring the wrong people. Sometimes start-ups try to hire managers from the corporate world to help lead the company but find that they are not willing to get their hands dirty because they are used to having a support team do their work. Always find team members who are willing to work together and have the same mission and vision as you. Also understand that some people can be more expensive to hire but if the person is a right fit, it’s always good to hire them with some equity stake.
- Underestimating the unique company culture. Most of the start-ups are too busy trying to do marketing and sales while forgetting to implement a culture. This should be the first step on building the team because you want to be the cool start-up that people want to work for!
