What Are Startup Mistakes?
To begin with, the idea and the product developed therefrom, per se, need to be understood. If one could answer the question, What is an ideal idea? we would be well on our way to solving one of the most fundamental flaws of an unsuccessful startup. Any idea whether de novo, original one or a tried and tested one which is executed in a unique way, has the potential to morph into a lucrative business. Ideas which serve the purpose of the masses, rather than a niche clientele fare better. Although the niche market too has many takers now.
The more people it caters to, the better. There is evidence that ideas which have intellectual capital and which are based on R&D have a greater chance of succeeding into healthy businesses, compared to those which don’t. Small ideas that cannot be scaled to the desired extent tend to die a natural death. Ideas, ideally, need to be user- defined and user-ratified, ensuring that the startup is making a product that the users want, and which solves their problem. It’s also desirable that the idea be flexible, able to align itself to the demands of the market/users; that being the key to survival. On the flip side changing ideas too frequently also doesn’t augur well for the company. Further, it pays, if there is a long term of vision of ROI being at least ten times that of the investment.
Startups depend heavily on the team that the startup comprises of i.e. founders and co-founders, and later as the startup scales, the employees. What matters is the confidence, passion and high degree of motivation from the CEO right through the ranks, followed by the level of expertise the right person for the right job. The team needs constant motivation to keep going despite failures and the correct form of incentives in terms of equity. An absence of one of the above factors, and sometimes an absence of networking and involvement of a mentor to support it, can prove to be costly. A single founder invariably lacks this support and maybe doomed to crash very early on. Disharmony among founders and co-founders is usually the order of the day and could spell disaster if one of the key people leave the startup.
The mistake here would be a lack of communication and not taking the initiative to sort out interpersonal issues.
There is nothing like competition as an incentive to perform and up the existing standards but competition can kill if the startup cannot withstand it. If the startup does not keep track of competitors very early on and remain flexible to change ideas and products to stay on in the market, it is bound to shut shop and head for an early exit.
Couple this with half-hearted efforts, and an unwillingness to take the plunge and work wholeheartedly towards achieving what one has set out to achieve; that’s what invariably spells the death-knell for a startup.