Deciding to embark on a startup is a major step for anyone. When an entrepreneur begins a startup, whether it is their first business, or they are beginning a new venture to add to their repertoire, there are a lot of emotions involved. The conception of a startup is exciting, scary, intriguing, and can easily become all-consuming. With all these different emotions running through a founder’s mind, it is easy to stumble one of or more of these three common startup mistakes.
1. Going All-In Without a Plan
Every prolific innovation starts with an idea. Many startup founders have a great idea, or at least they think they have a great idea. However, the difference between a great idea and a successful startup is the plan that backs it. Without a solid plan of how to bring the startup from a vague idea of grandeur out of the founder’s head and into the real world, the odds are already gravely against it.
This might seem obvious, but the number of founders that rush into their startup creation without plotting the steps, sometimes even abandoning their jobs and lives, hoping that their idea alone is going to skyrocket them toward success, is startling.
For any business, innovative, or simply needed in a particular area, needs a detailed plan backing it. This plan should include statistics and tangible reasons why this startup is a plausible solution.
The founder needs to not only work out all the questions about the business before they are asked, they must also be able to forecast their success in a realistic manner and name the demographics that will play the roles of the early adopter, the early majority, and the late majority. More than that, though, the founders must be correct in their predictions in order to be taken seriously.
With a good plan, the founder will be able to work out the bugs of their startup, give themselves a better visualization of their goals, and, if needed, help garner investors by making it easy for them to share the founder’s vision.
2. Unrealistic Goals
Every startup founder wants to change the world. Their ultimate dream is to become the next Elon Musk by curating the next big craze. Yet, if that is a major motivation, instead of striving for more realistic goals, the founder is setting themselves up for certain failure.
Of course, entrepreneurs are risk takers and they are always looking forward, toward a future that no one else can perceive but reaching for the stars is a process. To change the world, the founder must first work within the current bounds of reality and work outward.
It is a mistake to think that their idea, regardless of how amazing it is and how dedicated the founder(s) are to the idea, that they are going to achieve completely unrealistic goals.
Rather, it is much more feasible to set realistic goals, accomplish those and continue to expand outward, until the world is ready to accept the goals that first seemed insurmountable.
3. Overestimating the Startup
Unfortunately, many startups fail within the first 5 years. How many? More than ninety percent! While that might seem discouraging to most, the true entrepreneur is able to take that information and turn it into a challenge, instead of being dissuaded. There is proof that a truly good idea, with the right planning and an appropriate goal structure, it is possible to achieve success.
Yet, the reasons why a startup can fail is infinite; but one of the most common reasons for failure is the overestimation of what a startup has to offer. While a founder must be the biggest cheerleader for their startup, they must be able to also properly estimate their impact. Clearly, if a founder begins a startup, they have a grasp on the market opportunity it is serving. However, after deciding the market, the founder must also decide if that market, the paying customer, really needs the product or service. More than though, do they need it as direly as the founder wants to convince them they need it. Is it essential? Will it make their lives easier? Does the intellectual property the startup offers to serve a greater purpose than what the founder believes it serves?
All these questions must be honestly answered by the founder before they introduce their startup to the world, or it is doomed to failure, due primarily to incompetence.
In summation, if the founder has a plan for their startup, they set realistic goals and they are honest about what they have to offer the market the business will have a substantial advantage in earning their way into the top ten-percent of successful startups and reaching for the stars.