1) Trying to force the market into your product, rather than listening to the market and developing products to meet their needs.
2) Not establishing an advisory committee or board to challenge you, keep you accountable and support you.
3) Lack of focus.
1. Lack of appropriate research before beginning of an Enterprise
2. Inappropriate Investment planning
3. incompatible partnerships
Not working the field they want to be in before venturing out. Before you buy a Subway franchise, work in one for a week.
Not having a business plan that outlines step by step what they will do to accomplish their goals.
Not doing their homework in terms of choosing support. Picking the neighborhood bank and then finding out they won't support your 230 monthly transactions as downloads to QuickBooks (this happened to one of my clients).
1) Working in their business instead of on their business
2) Losing sight of their employee's happiness
3) Forgetting to delegate and empower others
1. Thinking that being skilled at your profession is enough knowledge to run a business.
2. Not dealing with estimated tax payments or using a payroll service
3. Thinking you can do it all yourself
I only work with technology oriented B2B companies so my answer applies here.
By far the biggest problem is that people confuse having a product with having a business. In advising young entrepreneurs I see this all too often.
The second biggest thing is not being clear on the most important aspect of your company, and that is, what business problem to you solve. Simply, if you don't solve a business problem you don't have a business, so figure it our or don't even try.
Third, lack of focus. When you start a business you need to focus on one thing and one thing only until you own it and you have a dependable set of customers. I advise an AppExchange add-in to Salesforce.com and they keep coming to me saying "but, we could do this, we could do that, we could get this low hanging fruit." Sorry, it doesn't work. Focus, focus, focus.
If you haven't yet, go read Geoffrey Moore's two classics "Crossing the Chasm" and "Inside the Tornado" When you read these, you'll become familiar with Moore's bowling alley metaphor. It's brilliant.
Lack of marketing research with an objective resource, building a management team with friends rather than strong implementers, avoiding self-development.
I believe three areas that can have a major negative impact on a new entrepreneur's chances of success are:
1. Lack of devotion and determination. Some entrepreneur's are more passionate about and more committed to doing whatever it takes to get to where they want to be. Those who are less devoted will surely struggle.
2. Fear of failure and unwillingness to take major risks. This seems so obvious, but any entrepreneur must fail in order to learn and move forward toward success, and failures don't occur without taking risks.
3. Thinking you can make it on your own. Some entrepreneurs won't seek advice and guidance from other entrepreneurs because of fear that their idea may be "stolen" or because their self-determination is so strong. But any successful entrepreneur will tell you that you must rely on advisors and partners on your journey, and don't be afraid to reach out to others for support.
1. Going into business with their wives/husbands/partners
2. Believing that the bank likes them, it doesn't give stuff
3. Not looking after your intellectual property, if you have any worthwhile, everyone and his dog will try and steal it from you, especially the suits!
Won't repeat many of the other responses. I'd add:
- Realizing that the Founder / person who starts up the enterprise is not likely the person who can effectively maintain and manage the enterprise once the start-up phase is over. "Entrepreneur", "Manager", and "leader" are frequently not synonymous!
I believe that the 3 key mistakes are:
1. insufficient funding
2. incomplete or poor business planning
3. lack of focus/poor execution
It depends on what stage of launch you find yourself in but typically, early statge companies suffer from a number of maladies;
1) have fallen in love with the idea / product and are inflexible re: development / deployment / market.
2) have incomplete market plan
3) speak with seed investors too early
4) do not surround themselves with smart management / advisors
5) the product is not adequately protected (patent if possible) or barriers to competitive entry are not clearly understood.
The biggest mistakes that I've seen entrepreneurs make (and made myself) are: #1 Fear #2 Greed #3 Hubris. FEAR that their ideas will be stolen or that they will be taken advantage leads entrepreneurs to kill new ventures before they ever really get started. GREED manifests as 'wanting total control' and 'needing to keep the majority stake' or expecting 'a couple hundred grand in year two'. HUBRIS is the flip side of whatever makes people successful and if not managed it will bring about the downfall of even the most experienced entrepreneur. There are many more reasons but in my opinion these three are the biggest.
From the perspective of an attorney, here are the 3 biggest mistakes:
1) If there is more than one owner involved, failing to have a workable written agreement between the owners;
2) When the time comes to form an entity, choosing the right form and the most efficient tax election; and
3) When technology or other intellectual property is involved, failing to have the appropriate "assignment of inventions" and other agreements in place regarding ownership of IP
wrong initial intention...money making
rely on instinct without confirming it with market research
lack of patience
Trying to do everything yourself.
Not having a defined business /marketing plan (if I build it they will come philosophy)
Not delegating /outsourcing content outside of your core competence.
Good answers, from my multiple startup experiences, here are 5:
1. Inability to adequately answer the top-3 marketing questions
a. What deep, deep need is being addressed
b. Do customers really, really care? Prove it.
c. Will customers pay your prices, again and again…even with competition
2. Not building a great team
a. Does it work hard and well together…on good AND bad days
b. Is it playing off the same game plan, and does it deliver
c. And, is it convinced they too will share in the success
3. Inadequate, up-front market/customer research; walk in their shoes before incurring costs (70%-80% of product cost is locked-in at design)
4. Lack of honest, personal goal setting by founder(s) and investor(s), and not sharing success; read Founder’s Dilemma…HBR
5. Inadequate cash management (not just spending, but also taking in investments)
Colorado Technology Ventures, LLC
There are no real customers for your big idea. There is no real new product/service in your big idea. Or there is no operation to run it with.