The 6 Mistakes Every Founder Makes And How To Avoid Them
Startups are tough. More than 90% fail and only about 10% succeed in this crowded market. Everyone wants to build a successful startup, but failing and learning from mistakes are crucial steps in building a successful venture.
We at Favcy Venture Builders have interacted with more than thousands of founders and, over the years, have figured out that these are some of the common mistakes that every first-time founder makes:
- Clinging to the original concept for far too long
More often than not, original ideas or prototypes will have to undergo a series of evolutions. This is because the idea you started with hasn’t been tested in the market. You might be trying to solve a problem that doesn’t even exist. Only after several rounds of testing and pivoting will you arrive at the perfect product or service for your startup with a substantial market need.
How to avoid this: The key to success here is an idea validation exercise for your startup idea. Before you invest a lot of money in your product or concept, you should always conduct a series of consumer interviews with individuals in your target market. Getting market insights on how relevant and differentiated your product is for the audience early on will help you pivot and evolve in the right direction.
- Competing in a crowded market:
Adopting a business model that is working for 10 companies might seem inviting, but that is where founders make the biggest mistake. Don’t go into a market just because it is working for many people around you, what works for them might not work for you. Startups run the risk of being overlooked in a crowded market.
How to avoid this: Take a step back and focus on developing a differentiated positioning for your idea. Bring something new to the market and create a niche for your business.
- Pursuing investors rather than consumers
A good idea doesn’t guarantee funding. Having a business plan that enables the product to pay for itself is one of the most reliable ways to ensure the longevity of your startup. New founders are overly invested in developing a pitch instead of developing a product. Instead of blindly seeking funding, find a customer who will pay for your goods.
How to avoid this: Start by building customer loyalty and fortifying consumer trust. This makes the process of finding investors a lot easier. When seeking funding, concentrate more on outlining your product’s vision and concept than on the numbers. Build a business, not a pitch.
- Avoiding any criticism
Sometimes founders get so blinded by their innovation that they fail to see any flaws it might have. Here's where the critics come to the rescue: make critics your startup’s best friend. Ignoring criticism is a rookie mistake because although it may hurt when someone criticises your product, you should utilise the chance to listen and get suggestions.
How to avoid this: Pay attention to all feedback, good and bad both. Work on implementing suggestions and gaining insights from an outsider’s perspective. This way, you can channel all the criticism into something productive while still improving your business.
- Doing everything alone
Entrepreneurs usually make the mistake of believing that they are on their own and attempt to do everything by themselves. Creating a business from scratch takes time, effort, and a good partner. Don’t try to establish a startup all by yourself. You will have to adopt several roles as the company's founder, including those of recruiting, finance, and customer service. This can be challenging as you're not skilled at it, and any wrong decisions during this stage can be very costly. An organisation like a venture building firm can play an important role here. While a VB essentially acts as a co-founder and helps you co-build your startup during the initial stages, it also provides you with guidance and resources that might be out of your reach at a nascent stage.
How to avoid this: Reduce your chance of burning out by having a good partner or a co-founder alongside you. Take out time to look for the right fit for yourself and the company. This way, you’ll have a companion that can assist you in developing the product and testing ideas.
- Being overly optimistic about growth and revenue.
A healthy dose of optimism is necessary for being a successful founder, but optimism can sometimes be blinding. Poor sales result from founders designing items based on excessive emotional attachment to their idea rather than what buyers want. This further leads to a decrease in profits and eventually the collapse of a startup.
How to avoid this: Building a successful company requires understanding when to pivot. Keep a realistic outlook on your growth and sales before and after launching your product. Try to keep your biases aside when evaluating the success or failure of your product.
Although there are various startup mistakes to avoid as you establish your company, mistakes are in the end inevitable. However, you can reduce your likelihood of failure by analysing and resolving these seven common startup mistakes. During the process, try not to be too hard on yourself. By doing this, you'll be able to significantly raise your company's chances of thriving in the competitive, brutal, yet profitable market.
At Favcy VB, we have helped 26+ founders validate their ideas and co-build their startups from scratch. If you’re a struggling idea-stage founder, you might want to check the following: