Are you planning to launch a startup? The first few years will be an uphill battle due to the tough learning curve. Even if you’re an expert in your industry, chances are, you will likely still encounter pitfalls along the way.
While there’s no guarantee that every startup will be successful (in fact, 75% of all startups fail—yikes!), there are common mistakes made by young startups in the past that can be avoided.
Here are the top 6 startup mistakes:
1. Not planning enough
Having a solid business plan is more than just a ticket for you to get funding from investors. You need it to lay out the direction and roadmap for your startup’s success. Without it, you will be shooting aimlessly in the dark without any clear vision of where your business is going.
It’s one of the most important document that holds you accountable and helps you to monitor the progress of your business. When done right, it can help you get organized and stay on track.
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2. Broad target market
Another essential element in startups is your target market. Let’s face it. You can never cater to and answer everyone’s needs; no company has ever done that as it’s probably impossible to target everyone. That’s why it’s extremely important to segment your market, and to understand your target market thoroughly.
You need to conduct market research that gives you information on who your ideal customers are, where you can reach them and what problems you’re solving for them. This will involve determining the gender, age, location, status and behavior of the consumers who would likely buy your product or service.
3. Recruiting the wrong people
For young startups, the first year is usually the most unstable as the company is still in the process of growing and innovating the business. Hiring the right people to work on your idea will definitely get you on track with your startup goals. On average, it will take you 1-3 months to hire the right person depending on your requirements. Don’t settle for less, and always go for the rock stars.
Most of the time, startup employees will find themselves working beyond their job description so make sure they understand that they have to wear many hats at this phase of the startup. If you’re not setting their expectations right at the beginning, you won’t only be wasting valuable time (remember, time is money), but you’ll be haunted by employee issues down the road.
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4. Launching projects too early or too late
Many startups often make the mistake of releasing a mediocre version of their products too soon or spending months or years perfecting them and end up not launching them at all. Striking that balance between developing an awesome product and launching early won’t be easy but not entirely impossible.
Ensure that you have achieved the base standards for usability and design on your essential feature set or you might not get the desired result that you want. Remember: your first launch is just a start and you will soon discover that there will be a series of improvements as you go.
5. Being too excessively strict about ideas
There will come a time when you need to steer your company to another direction where you think the business will succeed. No matter how passionate you are about a certain idea, you have to adjust and be open-minded about change.
Changing direction does not signify that you’re anticipating failure. It could be that there might be different business opportunities that you haven’t seized yet. Always take stock of what you are currently marketing and what solutions that you can bring to your customers.
6. Overspending your capital
When it comes to financing your startup, it’s easy to bleed yourself dry. Since you’ve already given up your full time job, sleep and social life, it seems tempting to overspend more just to make it work.
It’s not really necessary to overspend on expensive software and equipment. There are various economical options available if you do your research well and try to look for a bargain.
By making sure that you don’t fall prey to any of these mistakes, you can make smart decisions to execute a winning strategy for your startup. When you stay committed to your goals and rise above the challenges firsthand, you are well on your way to success on your startup dream.