Startups are small companies that are just starting out in a niche. Their goal is to bring something new to the industry. Startup founders dream of giving society something it needs but hasn’t created it yet. To do this, they develop a super-valuable product or service that results in a high return on investment.
A distinctive feature of a startup is innovation and riskiness. Such companies seek to correct the shortcomings of existing products or create entirely new products and services. They disrupt established ways of thinking and doing business for industries, which is why they can be described as revolutionary companies.
A startup is often confused with a small business. But the similarity is only in the start-up micro-capital. A startup develops faster, implements new ideas, and strives to scale up to a large company. But it requires a lot of effort. Let’s discuss what are some major mistakes startups make:
Top Startup Mistakes
In addition to the obvious obstacles to the entrepreneurial path, such as problems with suppliers and employees, the lives of startups are made more difficult by their own mistakes. Let’s be wiser and learn from strangers.
No Business Plan
In almost every CMO conference, it is discussed that startups need to be flexible in order to quickly adapt to the needs of the market. However, this does not mean working without a plan. Going with the flow in business is a risky strategy. Yes, the business plan will change depending on the dynamics of the market, but it is necessary to understand the main goals and how to achieve them.
Having a business plan has the following benefits:
- Financing: To raise capital, you need to convince the investor that it is profitable to invest in you. A business plan allows you to structure your idea, goals, risks, financial statements, and forecasts.
- Management Of Risks: Startup owners automatically subscribe to a lifetime of uncertainty in running a company. The faster a business grows; the more risk it is exposed to. You can minimize these risks by reviewing the business plan in time and identifying your weaknesses.
- Tracking Expenses: In the early stages of a business, you will have to spend a large amount of money to gain momentum. Investing money with no guaranteed return can be intimidating. A business plan will allow you to confidently spend money on the essentials, and you will be able to track the movement of funds.
Weak Market Expertise
A startup starts with qualitative niche research. You can have many excuses: no time, no competencies, no understanding of how to conduct market research, no money to hire professional specialists. But without market research, you won’t discover your market opportunities and threats, competitors and substitutes for your product, customer needs and behavior, market value and demand. For investors, this means that you are not prepared enough to take your product to market and run a real business.
The Volatility Of Marketing Efforts
Aspiring startups dream of a few months (or even weeks!) of marketing efforts to take their business to the next level. And this is a mistake. Marketing is a journey, not a sprint. You need to start it at an early stage, while still working on a product prototype and business idea.
You can focus on free solutions like SMM and digital marketing or traditional marketing strategies. The main thing is constancy, consistency of efforts, and experiments throughout the life cycle of your business.
At the beginning, you may not have a large number of tasks. But this does not mean that one person can handle everything. Imagine that you need to properly paint a marketing plan, find investment partners, create a product vision, generate ideas, and do many other small but important tasks that one person cannot physically take on.
Defocus and overworking lead to fatigue that affects decision-making. There are examples when a startup started with one person, like Oracle owner Larry Ellison. But, as soon as he opened his company and began to pay more attention to his product, he delegated his work to two other tech-savvy partners. This led to the fact that the CIA became the first client of the startup. So don’t try to shoulder every task on your own shoulders. A little help never hurt anyone.