If you're looking to start, or are currently in, a startup, then mistakes are part of the game. In fact, they're the biggest part of the game as you can't progress forward until you resolve the issues that you are trying to tackle. But you can perhaps mitigate some of the damage and perhaps get to your next goal faster if you tread carefully.
The following are a few mistakes to watch out for that many startups will undoubtedly make on their way to grow their business. We've made all of these in our startup journey, but more importantly, we've learned tremendously from them and our company is in a stronger place now because of it.
Not being aggressive enough in the beginning
Startups are a fun time in the beginning. Frustrating in the middle. And mellowed out and mature by the end. You're living out a TV show pretty much and people love hearing your stories about the week's happenings. Eventually, however, people will grow tired of hearing your tales and will want to see results. Less talking and more action, in the beginning, will give you the momentum that you will need during the difficult bumps where your ideas are getting validated and you're waiting for results. Having no userbase and no project can get to be daunting at some point. But if you put in the work early on to achieve these things, you'll have something continuously to keep you going.
The beginning is when you have the time, the money and the motivation to try the difficult things. It's going to be much harder after your product goes to market to test out ideas and make changes, so trying everything in the beginning will put you in a much more comfortable place later on. This includes everything from large marketing campaigns to going door to door to get your product into real people's hands. With our startup, we did just that in the beginning. And we saw immediate results. Even just an MVP will be more than enough to gauge your real targetted audiences interest in your product.
Keep your eye on finances
Every startup essentially will begin with self-funding. Whether it be through savings or current employment, you and your team will be the financial support for your company for some time. And while relatively cheap in the beginning, costs can quickly begin to add up as you add more and more services that you will require for operations. Just to name a few services that will come in handy:
- Server hosting costs
- 3rd party integrations
- Purchased assets
- Source control hosting
- Any outsourced work
- Legal fees
Again, you will probably be using the free-tiers during the early months, but eventually, as your userbase and workload begin to grow, which is what you want, you will probably need to start to upgrading accounts to Pro versions. Not a huge deal for many services, but some can run pretty expensive. A decent cloud hosting provider, for example, can you run a few hundred dollars per month, and much more if you can manage to increase your traffic size. So keeping a budget for just these things is hugely important. If a service isn't being used for more than a month, it should be terminated immediately.
There are several options that you can take with server hosting. Going with the cloud is obviously not the cheapest route to take early on and you might benefit more from a decent shared hosting account. However, if you are using the cloud, then having someone manage tiers and feature requirements monthly is a good route to go if you're willing to put in the extra manpower.
Not measuring key performance indicators
Your entire business will essentially rely on some increasing number that you can measure. Whether it be an increasing user base or an increasing revenue stream, something will need to be tracked in order to measure progress. And it's important to pick one thing. Don't pick 2 or 3, otherwise, you'll be throwing your energy around on multiple different routes. Decide early on in the game what it is that you will be targeting. Going into a startup blindly is a sure fire way to find yourself in an infinite loop of testing and validation and never really seeing any results.
Of course, you're not married to this one concept either. If you notice that traction is happening elsewhere, then switching gears and targeting a new metric might be the better route to go. But if you're making progress with what you are currently doing, then sticking to your guns might work out best for you. The only way you'll know is to constantly keep measuring performance. Weekly would be fantastic. But if not possible due to slower growth times, then monthly for sure would be the limit.
Early on, our KPI's were based on user acquisition, and this helped us focus our finances and time towards more marketing. However, after we figured out how to acquire users, the next KPI we wanted to tackle was step 1 in a full conversion. Once that was figured out, then step 2 and 3 were to follow and so on. Your final KPI should, of course, be a full conversion. But you have to work your way up.
Burning out team members
Startups are incredibly demanding and will essentially require you to completely restructure your old life and your way of thinking. You'll have to quit high paying jobs, spend your weekends in tight office spaces and take random driving trips and single day flights for meetings. Fun the first few times, but draining soon after. Many people are not willing to go to those lengths, particularly as most people never have to do these things, but don't realize it until much later in the game.
A burned out team will not last very long. However, a burned out team usually denotes than an insane amount of work has been done already, so while giving up seems like the best option, working twice as hard would be my recommendation. Take a camping trip with your team. Or spend a weekend just not talking about your project. Sometimes you have to give yourself some space from something, so that you can realize just how much you miss it. You'll either soon realize that it isn't for you, or that there's nothing left for you going back to your old life, so you might as well plow forward without fear.
Burning out is contagious, I'll say that now. If 2 members of a team of 4 are about to call it quits, then your company could look like it's on the brink of collapse. So plan ahead, even before you begin your business so that you can handle that situation appropriately. Fair to say that not everyone will make it to the end of a long and treacherous journey.
You will need to change and reinvent yourself multiple times
The truth is that your idea, while fantastic in your head, might not be fantastic for anyone else. But that doesn't mean that it does not have elements that make sense and are needed in the market. So reinventing yourself will probably be required, and will probably be required multiple times. Do not be afraid to rebrand yourself or to shift your target audience to something completely different.
Just as Amazon started with books and then slowly moved to any project imaginable and Airbnb is now taking a stronghold in the travel and experience industry, so too will your business end up moving in a different direction. Not a bad thing in the least. It just means that you are gaining traction in a particular market segment and you shouldn't be afraid to make the push and shift resources around.
This could involve many things, from completely deleting your codebase and starting over, to shifting all finance to something different and leaving older ideas uncovered. This is where measuring KPI's (above) comes in handy. Let the data and numbers lead where your company should be going.
Treat your company like a real business
If your goal is to gain growth in the levels of Uber or Airbnb, then you have to think in that manner. Just because you work out of a coffee shop for most of the first year and because you're negative paychecks every other week does not mean that you are not a real business. In fact, you're the realest of businesses, because you are spending all your waking hours on this project. So make business cards, print t-shirts, tell people about your company, write blog posts about it, etc. The more you do these things, the more confident you will be in your work and it will definitely show.
If you never prepare mentally for the business growth then you will never be able to think on that level and your business will suffer in the long run. If you are waiting to have a giant office and 20 employees before you tell people about your company, then you're going to be silently waiting for a long time. If you treat your company like a billion dollar industry, then so will the users that use it. Just ask yourself right now. "What would I do if I was in charge of 50 employees?". Because you very well could be in the near future.