6 Mistakes Startup founders make and how to avoid them

There are about 3 million newly founded startups in the U.S. every year, and according to explodingtopics.com, 20% of them fail within the first two years. 45% don't survive the fifth year, and 65% fail during the first ten years. 75% leave the business during the first 15 years.
One painful thing is that founders often realize their mistakes when it is already too late, but most of this could be avoided with a little bit of research and adjustment. Here are some of the mistakes:

Startups

5 mins read

1. Poor market research:

Most founders start up with an idea for a product, add vision to it, and feel people would just fall in love with their product. "I mean, why not? It's a great product; people would love it." With this in mind, they do not do enough research to find their market fit because they are already convinced of the greatness of their product. In most cases, their product is actually great, but they are probably selling to the wrong audience. You might think, "Well, that's obvious,' but finding the right audience is not as easy as you might think. It requires a lot of research. You need to be conversant with your audience's way of life. To avoid this mistake, you must do enough research about your product market. Who are your audience? Where are they located? Who are your competitors? What are their value propositions, and how is yours different? Would your audience appreciate your product's value, etc.? Doing thorough research would let you know if your product is in demand, who the right audience is, and the most effective way to sell to them

2. Failure to build network early on in their career:

This mistake is most prominent when it comes to raising funds. More than half of startup founders could attest to the fact that their first funding comes from someone in their network. Failing to build a network early on in your career can make it hard to find investors to fund your product. To build a network, start with the people around you. Build a strong relationship with them to further strengthen the bond. Add some value to the relationship, offer some kind of assistance for free, or seek their advice. Joining online communities is a good place to build a network. Connect with people on various social media platforms. Become an active figure and portray value. People would be attracted to you. Participate in conferences and webinars, both online and offline. Consistently building meaningful relationships over the years would yield fruit because you never know where your next investor might be from

3. Failing to meet product milestones:

Building a product takes time and effort, but milestones are very important as they are used to judge the progress of your product. Sometimes, the board uses this to judge the progress of the product. Failure to meet milestones shows your product isn't making progress and can make the board lose interest in your product, which in turn might make it hard to find investors for your product in the future and also affect the continuation of your product. To avoid this pitfall, you need to communicate and provide all the resources needed to meet that milestone. Resources could include technology, tools, and subscriptions. In development, you need a highly skilled and competent team of engineers who hardly fall behind in meeting deadlines and at the same time provide quality. If you are not sure where to get such engineers, you can try contacting a software development and consultancy company. A good example of a fast-rising software consultancy with 99% deliverability is Syntax Software Innovations

4. Bad hiring decision:

This is very apparent in tech startups where founders with little to no technical knowledge want to hire a CTO or a product lead to oversee the development of their product. The problem lies in the fact that the CTO has more control over the development process than the founder and might seek to exploit this, mostly in cases where the vision of the product lead is not aligned with the founder. Most times, product management may not know the proper means to hire product engineers with the skills needed for the successful development of their product. So many founders are victims of this. Many projects have been terminated, thousands of dollars spent, time wasted, and nothing achieved. Before it's too late, learn the lesson: a product lead/CTO should be someone you know and trust who has the right skills. In some cases, it is best to hire leads from talent management communities like Andela, mission.dev, and even Syntax Software Innovations mentioned above. Talent communities have a very strict vetting process that ensures only top talented engineers are up to the task. Another strategy might be to let a software development and consultancy company handle the development of the project. They have the proper team, resources, and tools that are best for your business. You can check out my article on how to know the right software development and consultancy company for your product.

5. Making unbudgeted expenses:

Making unaccounted expenses can lead to a shortage of financial resources, and founders end up finding out that their money is no longer enough. To avoid this, have a total account of all the resources you need in building your project and how much it will cost. This includes the cost of servers, technologies, tools, subscriptions, salary budget, etc. Making a lot of research or paying specialists to do this research can equip you with knowledge of what is required to build your project and how to properly account for it. By doing this, try not to make unbudgeted expenses; this can save you from running out of money.

6. Poor product presentation/branding:

You might have a good product, but the way you present it to your customers matters. Good products are easy to use, have a friendly design, are easily accessible, are of good quality, and are reliable. Overlooking all these criteria can lead to a low customer rate. Even a great product must look good, or it might lead to miscommunication and poor customer retention. You can consult a brand specialist to help you properly brand your product to avoid the pitfall of poor product branding

Summary

The introduction highlights the high failure rate of startups in the U.S. and emphasizes the importance of avoiding common mistakes through research and adjustment. The identified mistakes include poor market research, failure to build a network, not meeting product milestones, making bad hiring decisions, unplanned expenses, and poor product presentation/branding. The summary suggests addressing these issues through thorough research, building networks early on, meeting product milestones, making informed hiring decisions, budgeting wisely, and ensuring effective product presentation and branding.