7 Deadly Sins of Start-ups
Don’t fall prey to one of these common entrepreneur mistakes. You’ll be much more likely to avert a swift start-up death.
Now that I have you fired up about why you should start a company, it’s time for me to bring you back down to earth.
Starting a company will be one of the hardest things you ever do. It’s you versus the world. And the world usually wins, as more than 65% of all businesses fail.
So what are the major mistakes you will make that will lead to the demise of your business? Here are my 7 deadly sins of start-ups.
1. Pick the wrong market
There’s a great line in Marcus Luttrell’s Lone Survivor: The Eyewitness Account of Operation Redwing and the Lost Heroes of Seal Team 10about picking the right opportunities. Marcus quotes his risk-taking entrepreneurial father, “I’d rather shoot for a star and hit a stump than shoot for a stump and miss.”
Shoot for the stars. Pick a large market with room for many large winners. Choosing a good market can make up for a lot of operational mistakes. Choosing the wrong market can turn the game of business into a game of roulette in which each chamber has a bullet.
2. Choose the wrong co-founder
The fastest way to ruin a friendship is to start a business with him. Just because you are friends doesn’t mean you can work well together. The booby prize for winning a fight with a co-founder? A failed business.
Two dudes can be best buds for 20 years. Put a big pile of potential money in the middle of them, and watch the worse character traits of each come out. It often makesThe Apprentice look tame.
Just like in marriage, opposites attract in co-founders. Don’t start a business with someone whose skill set matches yours. Find someone whose strengths are your weaknesses, and whose weaknesses are your strengths. Divide and conquer together. And trust each other.
3. Wait too long to launch
Business school classes (so I’ve heard from friends who spent a small fortune to lose 2 years of their professional lives) talk about finding a “product-market fit.” In the real world, we call that building a product or creating a service people will pay for.
The only way to really know if your offering has a future is to actually go to real people and ask them to buy, or use it—soon.
Everything comes up roses in spreadsheets. I’ve never met an entrepreneur whose projections weren’t “conservative” or whose financial model wasn’t “rock solid.” But I’ve met many, many entrepreneurs whose businesses have failed, many very publicly and with flair.
The gap between what you think will happen during your planning phase and what actually happens when you are in market selling your product or service is often huge. So launch early to get the feedback you need to iterate, iterate, and iterate some more.
Continue reading this article at INC.com after the break!
— Wealth Building Daily
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