The Indian Startup ecosystem has finally begun running moving out of its infancy. Some of it is thanks to the governmental policy and the rest is owing to the success of unicorns likes Flipkart. As is with startups, all of them make mistakes. The sad part is not all of them survive their first. The good part is most of the mistakes are common and these are mistakes that kill startups.
Here is a list of the most common mistakes that kill startups.
1. Working Alone
“No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team.”
Irrespective of how brilliant you are, if you are working alone, sooner or later you are bound to fail. This is one of the most common mistakes that kills startups. You may believe that working alone will have an advantage and it does but the disadvantages outweigh them. The sheer amount of man-hours and work that goes into building a startup across multiple domains makes it impossible for a single person to handle. Sure you will find exceptions but working in a team keeps you motivated and brings more ideas on the table. These ideas could really help in refining your startup.
2. Extracting an idea
Startups are all about originality. If you are trying to build a product by copying an idea that already has been a mainstay and hundreds of copycats, you are preparing for failure. Folks at rocket internet will beg to differ but you sure should start preparing for failure.
“You should learn from your competitor but never copy. you copy and you die.”
Copying may get you 1% share in the market but it will take you ages to take on the big successful one. It will do everything in its power to keep its market share intact and maybe go after your 1% next.
3. Choosing the wrong team
Working alone is as bad as working with the wrong team. It is one those mistakes that kill startups in most cases. Having ego clashes within your team or people putting different levels of effort makes it hard for the startup to succeed. It is of paramount importance that you build a team with like-minded people who are ready to invest everything that they have into the startup. If you and your co-founders are not on the same page, it is a huge red flag.
4. Taking too long to launch
It isn’t necessary to build and launch a half-baked product but it is necessary to keep optimistic timelines. One of the best at setting optimistic deadlines, some would say unrealistic, is the Iron Man of startups – Elon Musk. He sets up deadlines in a very optimistic manner and more often than not he delivers. The problem with taking too long to build and launch is the possibility of a competitor taking away your market share. Also, it is a departure from the lean methodology that works in this fast-paced world of startups.
“If you are the kind of person who is waiting for the ‘right’ thing to happen, you might wait for a long time. It’s like waiting for all the traffic lights to be green for five miles before starting the trip.”
5. Building a niche product
It is really important that you do your market survey before building a product. What is more important is that you do it right. In today’s world of startups building a product isn’t difficult. It is all about the marketing. The worst case scenario is when you build a product that doesn’t have a market big enough to make it profitable. There are a lot of startups that build wonderful products but the market size isn’t there for them to taste any sort of success in the long run.
“By far the most common mistake startups make is to solve problems no one has”
6. Having Inhibitions
If you are someone who likes to keep in a shell, startups aren’t for you. Every startup needs passionate founders. Sure you could be good at coding, developing the product but there may come a time when you needs to get your hands dirty and market your product. Cold calling, being audacious in promoting your product are some standard practices. If you play down your own product how do you expect your consumers to think of it something they would like to invest in. A hacker needs some sort of hustle skill as well as a founder. If you don’t have it, you can always build it.
“Some people revel in getting their hands dirty. These are the people that make startups grow wildly. People with hustle also tend to be much more agile – they’re the water that goes around the rock. These are the people you want around when everything goes wrong. They’re also the people you want beside you when everything goes right.”
7. Raising too much or too less money
Yes. You read that right. Raising too much money is as bad as raising too less or no money at all. Both are mistakes that kill startups. Bootstrapping startups eventually reach to a point where they need to raise money to support their operations. It is important to have a clear view as to how much money you require depending on the requirement for all the departments. You can have a buffer of 10% but if you go below or beyond that amount, you could run into trouble.
“The fact is that the amount of money start-ups raise in their seed and Series A rounds is inversely correlated with success. Yes, I mean that. Less money raised leads to more success. That is the data I stare at all the time.”
Raising too much sometimes takes away the control of your company away from you. That is one of the worst feelings to have.
8. Sacrificing users for profit
This is one of the saddest mistakes that kill startups yet it happens pretty often. In the lust to boost profits startups hike pricing plans and eventually sacrifice users. One needs to understand that in the worlds of startups user is God. A startup cannot succeed if it sacrifices users for whatever reason.
“are you raising money?”
“We raise money every day, from our customers.”
9. Lack of passion
This is one of the most surprising reasons or mistakes that kills startups. If you are a startup founder and are looking to build a product that is solving a problem you ought to be passionate. I am yet to come across a person who isn’t passionate about his or her startup but such people do exist. The lack of passion kills your startup long before it even begins.
“Startup success is driven most by the product passion, quality, vision, team-work and persistence of the founding team and the talent that the team attracts.”
If you are a startup founder or are looking to startup soon, the above points are something you should be aware of. Startup success is similar to finding love. You need to be patient, honest and strive to deliver more than you take.
What do you think are mistakes that kill startups? Do let us know your take in the comments below.