I see matched sets of errors by new entrepreneurs:
1. Spending money before it is absolutely necessary--esp. on overhead.
OR Failing to go all in, not spending as much as you need when the window of opportunity opens wide.
2. Plunging ahead too quickly before you are ready. Going to market with beta.
OR Hesitating, waiting too long, so that others pass you by. Striving for perfection instead of good enough.
OR Beating a dead horse. Sticking with something long after you should have written it off and moved on.
3. Being the Lone Ranger. Taking too much on yourself, thinking you're the smartest, you know all the answers.
OR Being indecisive. Listening to too many voices and viewpoints, trying to satisfy everybody.
4. Micromanager. Hire good people but always look over their shoulder, telling them how to do their job.
OR Laissez faire. Hire good people then turn them loose, giving too little guidance and feedback.
OR Switch back and forth between these two. That REALLY drives your people crazy!
1). Lack of real product knowledge. Just because an app is practical does not mean there is a market for it.
2). Lack of real marketing knowledge. Just because an app may be a better mousetrap does not guarantee there is a market for it.
3). Lack of a realistic revenue model. Just because an app is popular does not guarantee profitability.
1. Thinking the idea is more important than the execution.
2. If it doesn't make money, it doesn't make sense.
3. It's easier than having a paycheck job.
1) Wanting to make money instead of making a difference. Need a focus on how your service or product will help your customers and as result you will get paid.
2) Listening to advice...take action today.
3) Not spending enough time on marketing and selling.
1. Feeling they need all the "trappings" before beginning (logo, stationery, LLC, accountant and lawyer, etc)
2. Not being narrowly focused (or, as many of us call it: niched). You canNOT be all things to all people. Thinking that "everyone" can use your service means your message to your market is WAY too fuzzy - go after one, small, narrowly-focused group. Get them and THEN you can expand to the NEXT small, narrowly-focused group.
3. Not staying focused. Success will NOT happen over night. Success is NOT a straight line. Keep "testing" your assumptions, your marketing, your products and services, always listening to what your consumers (or prospects) tell you. But don't listen to EVERYONE - not everyone's opinion is as important as everyone elses (I love my wife: but she's not interested in what I do and certainly isn't an expert - so to listen to her "opinions" will not be helpful to my success)
Keep going! It's the JOURNEY that's important and fun, not just the destination.
#1 reason companies fail: Ignore customers.
#2 Lack of focus.
#3 Lack of execution.
303 Velocity - http://303velocity.com
Your top notch user experience, mobilized.
1: Picking the wrong partner (could be friend or family member)
2: Organizing your tasks to benefit self before the customer or simply not prioritizing. Example = Fully setting up a marketing campaign but not fixing checkout payment issues on the website.
3: Not allowing/having enough time to really make the business grow or get established.
1) Starting out underfunded.
2) Believing they can handle product/service design and delivery, marketing, and financial management equally well and on their own.
3) Being unable to demonstrate that the business has the potential to be both profitable and sustainable.
1) No solid business plan.
2) No long-term strategic conceptualization.
3) No mentorship/assistance during the startup phase.
With the right mentor or consultant, you will be better positioned for success with your business. Regardless of how smart or experienced you may think you are, there is valuable information to be gained by having someone else along with you for the ride who will provide you unfiltered feedback from an outside-in perspective.
I agree with many of the points that others have highlighted here.
- No branding. How can people follow you if they don't know who you are or what you stand for?
- Lack of focus.
- Spending money on infrastructure and people before knowing what they're selling. (No, you don't have to look like a "real company" in order to move forward.)
- Going it alone, thinking they know everything. You can't know everything and a little coaching/mentoring can go a long way toward success (and being open to that coaching).
- No market testing to see how viable an idea is before building it.
I love Mike's last point. In August I wrapped up a project with just such a person (switches back & forth). He wants me to continue working with him but I'm certainly thinking twice about it. His businesses have such huge potential but this point and his lack of focus will severely limit the growth.
I can't help thinking that entrepreneurs are born better than they are made. Have you ever met a pessimistic entrepreneur that was successful?
For me the top three mistakes are:
1. They listen to the advice of a well meaning but inexperienced peer group or advice that is outdated. They need to read, watch and listen broadly, and expand their peer group to include the very best in their chosen vertical.
2. They listen to sales people from organisations that are trusted and well known, that promise the earth, charge the earth and deliver very poor results. They have to be good at saying no to sales people, but good at listening to what they say. By listening, questioning then later verifying the validity of any claims made to me by sales people, I began making much better buying decisions and could much more quickly identify and challenge false or misleading claims made by those wanting to supply or serve me.
3. They become frustrated or bored when immediate or anticipated results fail to materialize. They give up easily. I have thought about how easily I could give up many, many times, but something inside me just knows that giving up is an ingredient, unlikely to help anyone become better.
1. Failing to carry out market research prior to and during startup, ie customer profile.competitors, suppliers, client base
2.No business plan. How do you know when you get there if you don't know what you are aiming for?
3. Not having sufficient capital to ensure you can live at a reasonable standard, at least until the business generates enough turnover to be able to pay you a liveable wage (this counld be up to at least 3 years).
For a quick ball park idea of how much turnover you will need to generate for the wage you want X 3, $100,000 per annum X 3 = $300,000.income ( (1/3 for overheads, 1/3 for profit to reinvest in the business and 1/3 for wages and salary)
4. Bonus point - Accountability - nobody is watching you, so who are you accountable to, for producing results?.
1. No tangible goal (not having a clear picture of where they would like to be 5 years from when they start the business)
2. No financial plan
3. No solid USP for the business (If there is nothing different about the business, it might fade away eventually.)
Insightful comments, everyone!
Here are an entrepreneur's 7 Biggest Elevator Pitch Mistakes: http://www.improvandy.com/elevator-pitch/7-biggest-elevator-pitch-mistakes/
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
Lack of a coherent marketing strategy
Spending too much money on tactics like advertising without thinking it through
Lack of a valid value proposition
Passion to get to the finish line which is also our biggest strength
1- Not flexible (not adaptable to changes and challenges)
2- Lack of core value (lack of focus on "why in business")
3- Poor money management (spending more than earning)
First losing focus of the internal innovative brilliant insight to a concern, breakdown or innovative feature in a service/product and by waiting and designing a business planning process, core dedicated team, seed capital and on, on on, its all BS.
Second is thinking too much instead of design build the proto~typing proof of concept immediately. Get your hands, tongue, ears, nostrils, feet and teeth into the creation. Attention is what creates creations. And it is east today due to the technological distributive learning, parts for anything are available, professional expertise is looking for work, and with Wiki Creative Commons its possible to be an entrepreneur with a shoe box and duct tape. Make it work first.
Third the fatal mistake of going it alone for the big return on your precious invention and miss the immediate market opportunity by building alliances and strategic partners who need service or product today. Find the need for you entrepreneurial invention and design a way to fulfill 'a' satisfied customer and your off and running.