10 Proven Ways to Fail - Costly Startup Mistakes to Sidestep

Hello there!

The startup journey is an exciting rollercoaster - filled with exhilarating highs and inevitable bumps along the way. Typically, there are a lot more bumps than highs, but we just nod along, knowing what we signed up for and keep going. While embracing calculated (where possible) risks is essential, certain missteps can derail even the most promising ventures. This week's newsletter equips you with some funny (and some painful) memories and mistakes of mine and of colleagues of mine which you would be wise to avoid in your startups!

1. Falling in Love with Your Idea (Not Your Customer):

It's easy to get passionate about your solution. But remember, solving a real customer problem is the key to success. It's great if you think it's the best product in the world because look at all of the things it can solve. But unless you think about what does our client actually need, you will be excelling only at wasting your time and money. Conduct thorough market research, validate your idea with potential customers, and ensure there's a genuine demand for what you offer. Oftentimes businesses have a vague idea of the type of product they want to build because it will solve a problem, but then they don't dive head-first to build out that product. They dive into conversations with the people they're building it for.

I managed to fall in love with an idea of mine way back when and it was focused on bringing a product in from China and reselling it in Ireland and the UK. Up until then I had smaller similar initiatives which would have made me a couple hundred euro here and there. I was so in love with the project that we skipped marketing research to see IF there was a genuine need or want for it and just spent all my savings on purchasing a large enough batch thinking the selling will be easy enough. The product itself was a UV-light disinfectant box to be used for phones. A product I do to this day still quite like, but at that point in time, didn't have the knowledge how to market it correctly and be certain the market existed.

2. Building Before Validation:

Don't sink resources into developing a complex product before validating your concept. Start with a Minimum Viable Product (MVP) - a basic, functional version - to gather user feedback and refine your offering iteratively. This is something I'm in the process of doing with my startup Star Fan Rewards - the biggest problem? Trying to find a technical co-founder to be able to actually develop the MVP with so we can then move onto funding and scale to the full-scale app depending on the feedback from the target audience.

3. Ignoring Your Finances:

Financial mismanagement is a recipe for disaster. Develop a realistic budget, track your expenses meticulously, and secure sufficient funding to navigate inevitable challenges. This is vital to keep in mind - just because you got funding doesn't mean you're invincible - you need to be incredibly responsible with the money at your disposal.

For most startups, I recommend bootstrapping where they can. The reason is to understand the value for money more than anything else. The next step when that is no longer possible is to go for funding through investors - be it angel or VC funds. Why? Validation and PR. Sometimes, even if you don't necessarily need the money itself too much, the added benefits of getting several VC firms on board may benefit the company a lot more than just getting a loan and financing your startup on the down-low.

4. Assembling the Wrong Team:

Your team is your backbone. Surround yourself with talented, passionate individuals who complement your skillset and share your vision. Prioritize cultural fit and a collaborative spirit. When you're starting out, often you are in a rush to get your product out the door but be wary! Your startup attitude should not be "do it at all costs" because it will genuinely end up costing you more than you can afford! I have had three of my startups fail due to either disagreements with the other co-founders or due to them pulling back because they didn't want to take the risk or pull their weight and having the startup fail there.

Take your time and do it right. The wrong team may cripple your business but the right team may absolutely skyrocket your results!

5. Neglecting Marketing & Sales:

A brilliant product won't sell itself. Develop a strategic marketing and sales plan to reach your target audience, generate leads, and convert them into paying customers. A big reason why my marketing agencies have been my most successful startups so far is that I began in an age where there were a lot of technical people out there who had great ideas and were building fantastic products but had no idea how to actually reach their audience or even establish who their audience was.

You need Marketing, Sales, and Product Development to go hand-in-hand. Alignment should be prioritized, not just a single part of the business. Make sure your next steps are outlined properly and you have an idea how you'll be getting to where you want to go. If you're sitting down to create a Corporate Strategy (you should have a rough outline at least), then create a Marketing Strategy too! I will be creating a newsletter on the topic that will be coming out on Thursday showing how I create marketing strategies myself.

6. Micromanaging Your Team:

Trust your team! Hire talented individuals and empower them to make decisions. Focus on providing high-level direction and fostering a culture of ownership. If you hire people just to tell them what to do, then you need someone else to be in charge of hiring and maybe someone else to be the CEO too... This isn't the army. Hire smarter people than you to help you do your job better. Your team should be the bedrock of your company and if you treat them with the importance that they actually hold, then you will grow and smash through your challenges and objectives!

7. Not Adapting to Change:

The market is dynamic. Be prepared to adapt your strategy based on customer feedback, market trends, and competitor actions. Stay agile and embrace continuous learning. No, you do not know everything now. You will not know it in 10 months either. Get external opinions, find out as much as possible about external and internal factors that may affect your strategy and be prepared to not only change it, but communicate those changes effectively throughout the organization. That way you know that everyone is rowing in the same direction effectively.

8. Ignoring Your Competition:

While staying focused on your own vision is important, understand your competitive landscape. Analyze your competitors' strengths and weaknesses to identify opportunities for differentiation. Usually I leave this for the end because in Marketing your main focus needs to be on your audience, not on your competitors. That helps you look forward instead of side-to-side.

Your competition, however, is not something you should disregard. Just because they aren't your key focus, it doesn't mean you can't learn from the players that are bigger than you or even the newcomers who may disrupt the market in some innovative ways. When it comes to where they do their marketing, it's very difficult if you just decide to follow your competitors. Universities may not know what exactly they get from billboards across the city but they started doing it because one of their competitors started doing it too and now all of a sudden all over the city you may have billboards promoting different universities and their benefits. This is the kind of blind-following marketing that FOMO brings to the table. You may not have a clue what you get out of it, but you just don't want to fall behind. Be careful and always follow the data. Work with what you know, not with what you don't!

9. Giving Up Too Soon:

Building a successful startup takes time and resilience. Don't be discouraged by setbacks. Learn from your mistakes, pivot when necessary, and maintain a persistent spirit. It may take more than a year to build the right team. Another year to create the MVP itself. Practice delayed gratification. Entrepreneurship is 100% not the way you can "get-rich-quick" for 99% of startups. Patience is needed and you won't get anywhere without it. Similar to resilience which is even more important. Typically when you pitch your startup, the feedback you can get looks something like this:

No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. YES!

10. Forgetting Your Passion:

Remember why you embarked on this journey in the first place! Stay passionate, believe in your vision, and lead by inspiration. Your enthusiasm will be contagious and motivate your team, your potential investors and even your clients! However, entrepreneurs often burn out because they feel they constantly need to showcase this high-energy version of themselves and forget about recharging their own battery!

I can't explain to you how often I see entrepreneurs who just give up. They feel like they're the only ones pushing and they don't get constant support from those around them because it's normal. Those around you clearly will never care about your startup as much as you do! So how do you keep that passion alive through all the shortfalls mentioned in part 9 as well? Find time for yourself. Treat yourself like a houseplant. Hydrate. Go outside for fresh air and some sun. Don't forget that if a plant isn't growing where it is, you don't blame it - you replant it in better conditions!

To finish up:

There are 99 reasons startups fail - a lack of access to knowledge SHOULD NOT be one! What are some of the biggest challenges you've faced as a founder? Share your experiences and insights in the comments below and let's make sure that fellow founders don't break their backs doing the same mistakes all of us have already gone through before! Learn from others!

Best regards,

The #MarketingDoneRight Team

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