Growing a startup is a huge challenge. There are so many moving parts, and each one of them can play a key role in whether a startup succeeds or fails.
There are, however, some common mistakes made by startups that bolster their chances of stumbling into the digital abyss. Here are 10 of them:
1. Don’t solve a problem or meet a need: This is a tough one because it is so easy to launch a startup. It means many too startups are created without much raison d’etre. It is hard to develop a business when it has no mandate, mission or purpose.
2. No business model: I’ll likely get pushback on this one but having no idea about how your startup is going to make money is dangerous. In some way, a startup needs a plan on how money will come in the door, otherwise you’re working on a project, not a business.
3. Focus on features more than usability and design: Too many startups think when it comes to features, more is better so they keep adding new bells and whistles. Instead, startups should focus on giving users a user-friendly, intuitive experience that lets them get full value out of the product or service.
4. Hiring too many people: In many cases, a startup will begin to see revenue traction but becomes too excited or aggressive, which means there are more employees than the business can support or needs.
5. Hiring the wrong people: This is particularly important during the early days when every hire is crucial. Not every new employee has to be a rock-star but startups can’t afford to have a weak link. This often happens when hiring happens too fast, or they take the easy way out by hiring a friend or former colleague.
6. Blissfully ignorant of the competition: It’s not that you should obsess about rivals but it is important to know who they are, how they approach marketing and sales, and how their products are evolving and changing. This can be an informal process or a monthly/quarterly competitive review.
7. Under-financed: Within the Canadian startup landscape, under-funding is a chronic problem but startups that find themselves running on fumes have little chance to drive growth. For most startups, it means the hunt for financing is never-ending and, as important, when it does materialize, they should raise more than what’s needed.
8. Spend money on the wrong things: It is always surprising to see startups spend money on nice-to-have vs. have-to-have things. The leading culprits are office space, funky furniture, parties, out-of-town conferences, perks and bonuses.
9. No perspective: The reality about working for a startup is it’s an immersive, consuming experience. You’re so focused on the task at hand it can be easy to lose perspective on what’s going on within the marketplace. This is a dangerous situation because it can by easy to lose context or a sense of what needs to be done or changed.
10. Count on media and blog coverage to capture the spotlight: Truth be told, getting media and blogger coverage is the cherry on the top of the sundae. It’s a great way to demonstrate the business has traction but, at the end day, your time in the spotlight doesn’t last long. Enjoy the coverage but realize it’s a small, nice bump in the road.
What else would belong on this list?
More: TechCrunch has a post on the seven daily sales sins made by startups.