Moving into a startup environment from a well paid full day job would requires a big leap and mentally and physically preparation. Most fear of failures and making mistake they will regret eventually. The only way to avoid mistakes in startup is by making no mistakes and that would be impossible. Mistakes is part of life and part of success process. We need to try our best, learn from the mistake of others and hope that we won’t make any costly mistakes.
New wave of young startups are bursting to enter onto the global online business. Ready made platforms are ever ready for them to grab their opportunities to start an online business. However, they need to identify the common startup mistakes and ways to avoid them.
Below are some common mistakes made by startups
Most startups are more confidence by having one or probably more than one co-founders in their startup. Due to some stress in the process, single founder will find themselves discourage by failure.Working alongside with co-founder, they can be times when one need to motivate the other when they are down and vice versa. When you are a single founder, basically you have to do everything yourself. Assuming you are extremely good at different skillsets (technology, sales, finance,ops, graphics) then it’s possible you might go solo. But who wants to startup in a lonely process if having co-founder(s) can bring some fun, humour, competence, capability, brainstorming and moral support to you? Research shows that the ideal founding team is two individuals, with a past experience of working together, of similar age and financial standing, with mutual respect, honesty and trustworthy. One is good at building the products and the other is good at selling them or if both are good at selling would definitely make a great team.
Location is indeed critical to the success of your business. Lots of people start companies without realizing how much money it’s actually going to take. Whether your fund is from your hard earn money or VC, you have to practice a culture of frugal. The idea of startup in an apartment isn’t so bad as it sounds. In fact, an apartment is the right place to develop your own software. When looking for a startup space, it doesn’t always have to look professional. By all means, professional is doing a good work and getting the thumbs up from your customers.
Hiring people at initial startup
The most important thing you need to think is not to spend more money other than for your hosting, and domains. Hiring people is the worst scenario of a startup to begin with. They will incur more of your expenses, slow you down, therefore the less you hire, the better.
There’s no doubt about it, hiring unnecessary and under performer is expensive. Many big companies do it, the reason is to have more people working under them. This is one way of weighing your status in the competing business industry.
Imitation of ideas
Google the net and you will find thousands of products or services delivering the same thing using different brands and marketing methods. You don’t have to follow exactly what others are building. What you need is to think out of the box. Apple happened because Steve Wozniak wanted a computer, Google because Larry and Sergey couldn’t find stuff online and Hotmail because Sabeer Bhatia and jack Smith couldn’t exchange email at work. These people are the ones to look beyond and succeeded in developing a product to solve their problems.
Hiring programmers to code for you
Founders mostly are the ones who have programming background and who knows how to code. If you happen to be a business guy and have no idea on what coding is all about. It’s going to be harder than what you can imagine. How on earth are you going to select someone who claimed to be a programmer and that they are good in developing an application using this and that language and worse when they are too demanding on their salary package. Not only are they going to sabotage your whole process, your time, energy and money spent on your startups!. The only person who knows who is a good programmer are the ones who is also a programmer.
Too long in stealth mode
8 out of 10 startups begin in stealth mode. Why do these entrepreneurs go into “stealth mode”? Maybe they don’t want anyone to steal their ideas. However, the downside of stealth is not getting enough people excited. The longer you stay in stealth mode, the more risk of disappearing off the position. Therefore, you need to launch quickly and that forces you to finish some of the work. It doesn’t matter if you can’t sell your new products or service while in stealth mode and can’t generate any revenue, what you need is feedback from your product, deal with users and not afraid of being judged. Only by getting feedback from your users, you will create the ultimate product that will solve people’s problem.
“Were I to await perfection, my software would never be finished” (quotes)
Launching Too Soon
Launching a product too soon will ruin a startup reputation. Getting your product without even researching or adopting a testing stage is the most dangerous act one may mistakenly make. When you launch your product or service, user try it out once and if they find it dull or simply not appealing enough for them to stay longer, they will never return again nor they are going to ask their friends over to have a look at what you are offering.
Not focusing on the user
First of all, you need to determine your focus users. Who are you building your new product for? Which target you should aim for? Too little planing and lack of market research were major faults. Lots of reading and research are needed and this means networking, user group and others.
Having too little investment or too much would bring problems in startup. However, it depends on individual on this statement. If a startup has VC money then you will have lots of opinions. Usually the VC will take a big fat slices off your profit (24 – 40%) often higher percentage on subsequent fundings. They are not going to put their money to your startup unless you have the right team. They want their money to go to work, you will need to move into proper office with some staff. When you raise more money from VCs, it will get even harder, investors will be careful and cautious over their investment. More meetings are require from you explaining to them your goals and vision, they will be endless meetings and presentations. It’s definitely not going to be an easy task here, most of your time will be spend on talking to investors rather than building your product. Therefore, you really need to know how to handle these investors if you’re going to ask them for fundings.
Splitting between founders
Arguments between founders are common. First they don’t really know each other well before they even enter into their startup and when they do it’s too late. Sometimes, even best buddy might end up splitting in the end. Under long stressful environment, people might have break downs and attitude problems. They might have different goals or vision, lacking of trust, different past experience or even emotional insecurity about one’s future position. It’s pretty much like marrying someone. You have to solve it in the same way. Learn to ignore things you can tolerate and learn to talk to the person about things you can’t tolerate with. Pick your co-founders very carefully.
9 must reads before you launch a startup
What kind of entrepreneur are you?
Angel Investors in Malaysia
Angelsoft (article in Techcrunch Link)
Keiretsu Forum (Interview by BFM 89.9 Link)
Keiretsu Forum is the largest community of angel investors with 800 members across the world. To date, it has invested $180 million in 200 companies in real estate, healthcare, life sciences and so forth.
Angel Investor Network
Innovation Works (Detail here)
Cradle Investment Program / News
MDEC – Technopreneur Pre-Seed Fund Programme
List of VCs
David Heinemeier Hansson, creator of the Ruby on Rails framework and Partner at 37Signals gives insight into creating a profitable startup company.
Watch live video from HackerTV on Justin.tv
Paul Graham, founder of YCombinator, speaks at Startup School 08 about how to create a successful startup.
If you’re an angel investors or investors, kindly contact me so that i can update my angel investors list. Thanks!