Common Mistakes By First Time Startup

Starting a business is challenging. 90% fail, with 10% failing in the first year alone. As a company entrepreneur, you are aware of these numbers already, yet you are acting impulsively still. Fantastic! I just sold my business, so I've learnt a few painful lessons that I'll share below in the hopes that you might avoid them and increase your chances of success. I did the same thing six years ago.

Employing People Full-time Prior To Product-market Fit

In the early years of a firm, achieving product-market fit is the only thing that counts, as stated by Marc Andressen. In short, do you have a product that really appeals to people? Up until now, you'll be furiously testing out several concepts, maybe even on a weekly basis. Anyone who isn't a co-founder during this period will ultimately get impatient with the direction changes and question if the money they are giving up on elsewhere is really worth it.

Before realizing my error, I made this mistake three times. In addition to the financial loss, I regret having caused those early workers to go through such a difficult and delusional time.

Hiring Full-time Employees Before Product-market-fit

What are the best questions to identify product market fit (PMF)? - Quora

In the beginning, saving money is essential. It is hardly surprising that many notable organizations, like Google, began as garage projects. The greatest approach to save money early on is to hire abroad since labor is the most expensive factor and there is talent available everywhere, along with the necessary tools to work with it.

For $35–50 per hour, we at The Factual employed skilled designers and engineers in Argentina, where there was a nice time zone overlap with the US west coast. For $20 per hour or more, CEOs I know discovered comparable outstanding talent in Portugal, Spain, the Ukraine, and Vietnam. On occasion, we used US and Canadian talent in remote places or from less expensive locations overseas. We also discovered that, for the most part, working with overseas personnel was dependable and simple.

While offshore talent is amazing, it should be noted that they cannot address your difficulties. They will comply with your requests, just like the majority of contractors. Therefore, apply them to specified endeavors instead of ill-defined assignments.

Holding On To First Idea Far Too Long

It's extremely probable that your initial concept will fall flat. Given that you most likely just abandoned your job to start your business on the strength of a concept you believe is brilliant, this may sound like a harsh generalization. However, unique insights are often the key to a startup's success, at least in the consumer space. Furthermore, such ideas are usually gained by failing rather than reading or finding in a survey. Therefore, the secret to success is to swiftly get such insights and iterate through concepts.

For my initial concept, I developed a finished product before realizing that no one would buy it. I could have received the same information for a lot less money and effort with a more straightforward landing page test. Even while it may seem impossible for a landing page to convey the full potential of the product, if you can't articulate it clearly in text and get visitors to register, you won't know what issue you're trying to solve or who you're trying to help.

Building A Bigger Mvp Than Necessary

What is Product Market Fit and How Is It Evaluated?

The majority of entrepreneurs want to create a large-scale product, even if it is done gradually, and have a big idea on how to solve a difficult issue. Even with sincere efforts to reduce the feature set, product form factors such as a website or mobile app are significantly more involved than most people assume. Even before you have a feature, it takes a lot of work to just get a website or app up and running, get dependable login/authentication, have helpful onboarding, ensure responsive style, etc.

Locate the smallest product area that you can test with instead. It may seem a simple newsletter, but this was our first popular offering. Furthermore, because of its inherent retention, you are attracting customers early, which is essential for testing a more stable version of your product later on.

Not Having A Marketing Co-founder

High growth—typically 10% or more month over month—is the most sought-after attribute by investors in startups. This is so that a scalable company and product-market fit may be easily shown. It's a challenging task to reach high growth, however, and it calls for continuous testing of new marketing techniques and channels.

To ensure that the founder is not sidetracked from development on a daily basis, a marketing co-founder is crucial. We had a product co-founder/CEO and a technical co-founder in our business. Consequently, none of us concentrated only on growth, and we never regularly reached the 10% month-over-month growth rate. It took us five years into the trip to ultimately employ our marketing co-founder, and if we had acted sooner, our growth would have probably been more stable.

Read Also: Key Steps to Launching a Successful Business

Bonus Lesson

Other co-founders of startups came up with some of the greatest ideas listed above. The finest advise was typically gained from talking to other entrepreneurs; I had a regular dinner group of four founders who got together once a quarter. Apart from the advice, it was wonderful to share my sorrows and acknowledge that I'm not the only one who makes errors. I hope you find your tribe on this amazing trip, and feel free to contact me at arjun dot moorthy at gmail dot com with any queries.