A friend of mine saw my posting yesterday and sent me an email to ask about the most common start-up mistakes entrepreneurs make. There are just too many mistakes, but some are just part of the journey. But there are a few that are avoidable and these are the key ones that have most often prevented the success of many, even though they were smart and armed with great ideas and lots of invested capital.
Happinessless. Among the many blind and sometimes extreme ways we go about finding happiness, a lot of people practice selfish happiness as a goal. Then life becomes goalless. For some, starting a venture is a pursuit of happiness. Many entrepreneurs went into new ventures in a happinessless mode and kept convincing themselves that they love it when they cannot deal with the uncertainty. That is a sin. There is a big difference between aspiration and achievement. Your start-up has no future if you are not happy.
Lack of authentic ideas. Almost 90% of all successful start-ups are sprung from a genuine idea born from true personal experience or a personal story. It is about truly believing that you are bringing some value to fulfill customer needs. They have no shortage of ideas and need not to pretend that they have to work hard to com with ideas. The best entrepreneurs I’ve worked with are the type of people that don’t need to look for idea…but it’s the ideas that find them. Great ideas just show up on their door front.
Inability to focus. This is a killer one. All Web 2.0 startups are dealing with endless possibilities. The challenge is to concentrate on only one opportunity, and entrepreneurs can only afford one. The sooner they find its focus and make strides, the better. Yes, there are many exciting ideas, but they can’t pursue them all. Once they are committed to one idea, they wouldn’t look elsewhere until you’ve got something or they hit the wall.
Technology-driven rather than user-driven. This is extremely common. This nanochip will change the way in which all networks operate because it's 100x better than anything available today. Or This photo-sharing feature will change the way people think about photos where they should reside. Not necessarily. This type of naive faith in application or technology leads to what might have been an avoidable failure.
Spending extravagance. A web 2.0 startup is like any other startup. They need to live with the fact that there will be no infrastructure support or money to do many other things. They must know how to prioritize, preserve cash, and spend wisely. Even if proper financing has been raised, wasteful spending by founders sets the wrong example for the entire organization. Jet-set lifestyles are only allowed post liquidity event.
Excessive desire for ownership and power. Holding on too tightly to the % of ownership may not be a good idea. They must use that currency generously to attract leadership, employees, and investors that will maximize shareholder value – including the founders’. Some equate ownership with power. It may be true in traditional start-up, but not in the web 2.0 world.
Arrogance. There is a big difference between over confidence and arrogance. Web 2.0 entrepreneurs must acknowledge and constantly reflect the limits of their abilities and seek help and advise when others can make better decisions.
Boring People. A big of Web 2.0 start-up is about getting people excited. Not only in the project but in what’s going on out there. It is almost a culture. Many put boring people as managers and that goes against the culture of web 2.0. I used to have a couple of SOB ( Smart, Organized, Boring) senior folks working for me on a very exciting project, one day I decided these are the wrong people and I transferred them out into another project. Boring people cannot energize, excite and coach. In some worse cases they enervate, depress and control. You don’t want that.
