Mistakes Startups Make (and You Should Avoid)

Startups are high risk. They are hard. At the early stages, it’s 2-5 people against the world with constrained resources. You need to grow to stay alive.

Perhaps one of the the hardest things with startups is avoiding common pitfalls. Over in Quora there is a solid discussion thread on common mistakes startup founders make (though any business or manager can take note). Below I’ve summaried the key, recurring points the community identified. Im hardly the writer of these points, just the curator. I’ve acknowledged the contributors at the end of the post, I suggest you follow them.

  • Undervaluing Management Competency: Many startups and expanding businesses underestimate the difficulty of team management, general management and strategy. Being a ‘grown up’ manager is not always fun, but often necessary to move forwards as a business. When management competency is undervalued, it’s not uncommon for key decisions to be made in haste. Herein lies another important part of management competency; ensuring that are made are informed and logical.

  • Lack of Strategic Focus: Similar to management competency, a strategic product, market and company focus helps drive and move things forwards. Having this focus, and blocking out tasks and expenditures that do not add to achieving this goal, can be difficult to do but is often key to driving a high growth, lean company forwards. (Note: A risk here may be missing easy pivots, there’s a downside to everything).

It is important to remained focused on the task, market and problem at hand; losing this focus can make task prioritization a nightmare. It’s also important to understand what tasks matter right now (chasing TechCrunch is fun, but maybe not the best thing right now).

  • Inconsistent Hiring Quality: Staffing has always been an issue for startups. It’s not uncommon to go from heavy resource constrains to having the capital for hiring very quickly. It’s very important to not rush in the hiring process or in dry spells. Instead, wait for the right people every time. The short term gain of a quick hire is not worth the long term ramification.

  • Overvaluing the Idea: As we all know, execution is worth more than ideas. Ideas are cheap, especially in technology. Focus on execution and iteration over perfection. It is rare that your ideas will win the war.

  • Poor time management and prioritizing: Some early stage companies struggle to differentiate between what is important and urgent, what is an opportunity and a problem, etc. It’s important to manage your time tightly, especially as an early stage CEO, and frequently prioritize tasks based on urgency, importance and impact.

  • Poor positioning: We all love talking about lean startups. It’s important to position your company around solving users problems, not technology problems.Positioning can also come down to communication. Externally, it’s important to have the right question set to lead your sales process. In other words, ensure your external messaging is correct.

  • Passion vs Process: Gary Whitehill points out that as a business grows, in some cases, the founder may not be the best person to continue running the business. Whereas a founder has unwavering passion, a vision and can execute under ambiguity the business manager should be process and protocol driven. As a company grows, this becomes key.

  • Keeping people motivated: Startups can be tough. You are often struggling to find revenue, fighting big corporations for users and have only 20% of the resources you need to do either. The people you have should be there because they love your mission. Focus on a strong culture and keep these people motivated; they can probably work half the hours for double the money in a larger corporation. Additionally, motivated people work faster and produce far better results.

  • User Validation: Focus on active user feedback to ensure you are getting this right. You may like your idea, but get your potential customers to say the same thing. It’s also important to ensure your are validating with the right people; if they are not going to buy your product, they are not the right people to validate with.

  • Goal setting and low hanging fruit: As mentioned earlier, it is important to have a strong strategic focus. When laying out tactics, ensure you are setting short, mid and long term goals. Short term goals should include plenty of easy wins, or low hanging fruit. These short term goals can also attribute to motivation.

  • Obsessing over competition: Understand who your competition are and what they do. Try to understand where they are going, but don’t obsess over them. Your obsession should be focused on your own product.

  • Resulting: We love testing, but ensure the you truly understand the cause of your results. Misattributing cause and effect can be terribly dangerous.

  • Running out of cash: Of course, running out of cash is a big mistake. More importantly it is often a symptom of one of the earlier described problems. Keep an eye on your cash, especially if you are pre-revenue. It’s common sense, but to often forgotten.

Of course, this post would be nothing had Quora users not contributed to such a brilliant discussion. In no particular order, check out Siqi Chen, Adam Rifkin, Fahd Butt, Keith Rabois, Gary Whitehill, George Kellerman, Nabeel Hyatt, Chadwick Sakonchick, Brandon Smietana, Gregory Magarshak, Evan Rudowski and Gary Stein. You can also find me on Quora as Alex Blom.