12 Startup Mistakes First-time (Young) Founders Make

So, I have been involved with startups for the last three years and I have founded two startups till date and I successfully failed at my first startup House-let.com earlier. Now I am running my second startup Bonik since last year, and throughout my journey, I have made a ton of mistakes, learned from them, did some mistakes again, and woke up again.

After giving some thorough thoughts and observations from my journey and experience, I have come up with few things which I feel most of the first-time founders make, even second-time founders too sometimes. This might be a long post but I will name the points and describe each point why I think these are mistakes. Let's begin:

1) Taking up more people on the table earlier

We think of an idea, give it some preliminary research, share it will our close friends, and boom! teaming up with 4-5 people to get started. That's a very wrong way approach. Startup/business is not that lucrative as it seems upfront. You need to find people with complementary skills and the right mindset and abilities to take ownership of key functions you need, build the first version of your product/service, and take it to the market.

For example, if you want to build a SaaS product, a team must need a person who can define & design the product, a person who can build the product, and a person who can look after the marketing and distribution of the product.

Adding more people very early and thinking that you will do a "lot" is false. Initially, it might seem awesome to have such a "team", but having a "team" is not enough until and unless every single one from the founding team performs the same in different aspects of the business to lean on the cycle.

2) Not setting up roles and responsibilities

First-time founders have two instincts. Either they are title freaks or they don't define roles and responsibilities. Both are wrong. Being a title freak doesn't help to do the actual work rather it influences to act on the title. I mean wearing black turtlenecks and talking about "vision" doesn't make someone Steve Jobs really.

On the other hand, not defining roles and responsibilities is wrong too. See, we all know that startups don't work like corporates, and defining roles & responsibilities doesn't mean to entitle people as CEO/CTO/COO/CMO very early.

The founding team has to wear multiple hats at the same time and switch contexts to keep up the pace. But defining who will be responsible for a key function of the business, and who will give the final call if there is decision fatigue, really helps to work faster and having ownership of work.

You cannot take all the decisions by discussing them with your co-founders every single time. This might look obvious in the early days but won't work while growing, because it doesn't show the leadership abilities of founders in a broader sense. All you have to keep in mind is playing and acting on the vision you all set up earlier.

3) Not clarifying cap table structure earlier

This is really crucial. 99% of the founders tend to avoid this topic and think, "Oh, we are good friends, we don't have to think about this now". WRONG! This may seem unimportant in the early days, but you will soon see conflicts when the time will come to raise capital or talking about investments, or incorporating the company and things will get tricky at that time. Most startup founders don't have enough capital to start off, rather startups are initiated based on skills, passion, and a vision.

But these qualitative factors cannot be calculated in a sophisticated way, sometimes it's too difficult to calculate them. But talking and clarifying the cap table in the early days really helps to avoid future conflicts and disputes which is a common scenario in startups. If you are struggling to figure out your cap table structure, a tool like cofounders.gust.com might help.

4) Not having a clear company/team resolution and setting KPIs to measure performance

Idea ?

Team ?

Plan ?

Vision ?

Resolution and KPIs? NOT IDENTIFIED(!)

Having no company/team resolution to execute on and performing on it consistently is a mistake that happens early on. But this needs to be done as early as possible. Otherwise, it will be tough to keep everyone accountable and execute the plans. And ideas are worthless if not executed.

We know, not everyone has the same amount of caliber nor the same amount of skills. Despite the fact that not everyone works the same, a team needs to understand who is best at what, and what is the timeframe for them to execute on it, and how people can help each other to make it a collective process is what matters. And this way we tend to see "Teamwork" and that's the forte of a great startup company.

But how do you measure performance? By setting up KPIs or Key Performance Indicators. For example, you're planning to build a new feature and you came upon a decision that "How much time on a day a user USE IT will determine if we are building the right tool". That's it, you have a KPI now. And to make sure you are building it and measuring it properly, you have to assign tasks to follow and fixture the project for all the stakeholders (developers, designers, marketers, etc) involved in it.

To keep everyone accountable and productive, tools like Notion/ClickUp can help to manage your team tasks and projects and help you keep track of work to stay on the same page and move forward.

5) Not having a documented "lean" roadmap

A roadmap is a document to help understand the phases of execution on the bigger vision and setting up targets over a certain time to achieve and iterating through it. Roadmaps are typically a map of the journey ahead (typically a quarter/HY/FY) and defining what to execute when and where to go, to align with the goals and objectives. Keeping it lean is suitable and acting on the roadmap is also really important from the early days.

You can use a dedicated tool to document roadmap i.e Notion, but using a plane Google Doc will work fine too. Just stay lean as much as you can in the early days.

6) Not having a GTM or go-to-market plan

Tech startups tend to underestimate this a lot. In fact, most of the startups struggle with it after building a prototype or MVP and testing it on a small sample size. When it comes down to the point to scale the product by iterating on the basis of early feedbacks, having a proper go-to-market plan becomes a crucial part of every startup.

Doesn't matter how much great your product is, if you cannot distribute it properly and actively, the scale of the startup will tend to fall anyway. Because,

? Great product+Mediocre distribution = Dead Growth

? Mediocre product+Great distribution = Stable Growth

? Great product+Great distribution = Hockey-stick Growth

I personally struggle with it and it became my go-to topic to think about on a regular basis. Surely your plans will change but understanding its importance early on is important what I think.

7) Not documenting properly and preserving the documentations

Documentation is highly important for every single business doesn't matter if it's a startup, an SME, or a micro-enterprise. Documentation is helpful to communicate properly as well. Hence, you have to keep and store all the documentation from day zero. And for any new initiative/project/feature/product, all the relevant documents should be stored and organized somewhere in the cloud i.e (Google Drive/Dropbox) and make accessible for stakeholders to refer back to it anytime. This is INSANELY important!

8) Hiring fast instead of firing fast

Although startups don't just make mistakes to onboard the founding team rightly, they make mistakes in hiring too. We tend to see when startups raise a round of funds, they start to hire "aggressively". Yeah, hiring needs to be done really fast in some cases, but one needs to understand if the hire is really coming as a valuable asset to the company or just filling out the vacancy that senior leaders thought to be needed to show off in front of competitors or in general.

Instead of hiring fast, investing in the existing resources might be best sometimes. As we know, having more people doesn't necessarily mean you can do a lot! Sometimes it's the opposite.

On the other hand, startups tend to keep emotional touches with every individual when the team is really small and it's lovely. But sometimes, there are times to let go of the emotion and make a harsh decision that is good for the company at that time. When things don't work and you are not getting the results for a long time, sticking with them over and over doesn't really help.

Giving chances, train them up or time to bounce back on track is needed, maybe they are going through problems or they need help from you as the leader. But even after that, chances are, some of them won't make the significance you are expecting and they are not delivering as they were in the early days. In such a case, letting them go is better org-wide. It doesn't mean you are ruining relationships, it's just a thing needs-to-be-done.

9) Falling into the "one more feature/vertical trap" instead of finding a product-market fit

Startup founders are aggressive, visionary, and highly energetic. But, but they fall into the trap of "WE CAN DO EVERYTHING". Just because you have cash on the bank, a superb team on the table, skills, and abilities to do everything you see around, it's not that easy to DO EVERYTHING when you are still at the early stages.

Building something is easy, but running it, scaling it, and keeping the quality is not that easy as it seems. We see many highly successful global startups build a suite of products, but they did that after finding a product-market fit on their first ones and found ways to scale it accordingly and years of dedication!

Copying whatever your competition is doing, whatever you see trending, is a mistake that many first-time founders make.

In fact, I have seen people not adopting other tools, instead of thinking "Oh, we will build that ourselves". Anyway, that's a whole different topic to write on.

10) Not using emails properly and keeping evidence of important decisions/actions

We discuss so many things on chats, meetings, calls, in-person and decide or act on it immediately. But not communicating in a written format or keeping the meeting notes and sharing it in a written format make things blurry for future references.

See, we keep trust in people and that is expected. But having some verbal agreements, decisions, or action plans doesn't help to keep evidence. If anytime you need to refer back to it for any situation arisen, those emails or paperwork will come in handy and help ignore the disagreements or disputes.

11) Trusting people quickly and having high expectations

If you want to grow, you need to trust people, that's a no-brainer. Despite this fact, you will see many people who will show interest to join the momentum. And that is great! But you have to understand and have some intuition about who is right for you, not best for you. Sometimes choosing the right people on board is way important than having the best people.

You might think people are trying to help you unselfishly, but it doesn't happen in every case. You are in a business and not a charity, so people have expectations from you regardless. Surely you will find some true helping hands and well-wishers in your journey but this group of people will come rarely. So understanding people's expectations and keeping that aligned with your vision becomes important when you are in the momentum.

12) Fear of rejection and failure

As first-time founders, we are clueless in many ways in the initial days. And that's fine. We expect that people will support our idea, help us throughout, or bet on us by seeing our passion, dedication, and skills. But it doesn't happen like that way, my friend.

We get rejections from many people and it's a lifelong feature of life. You might pitch to hundreds of investors and still get rejections, you might pitch your idea to your friends and family and still get "NO", you might get rejections from your customers too. But at the end of the day, it's you who started it and you have to keep the gut feelings and bet on your idea upfront.

Sometimes even after doing everything possible, one can fail. And accepting failure and moving on is the attitude a founder must have. Only hard work, money, and talent are not enough always, LUCK also plays a vital role in your journey. Just don't give up. Remember I mentioned, "I successfully failed at my first startup" at the beginning of this write-up? I failed but I learned so many things that I consider that as a successful failure and I say it proudly.

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So, these are 12 mistakes I have experienced or witnessed throughout my journey and I can sense that many first-time (young) founders make such mistakes. Although we are human beings, and we will make mistakes again and again, and I'm no longer an exception here, but It's beneficial to keep these things in mind to avoid unexpected situations in future journeys.

Young founders might not know everything all at once and that's the learning curve. But getting mentorship from experienced people, learning from others' mistakes helps to incorporate processes that make it helpful to execute in a professional manner. Startups or any business are not a charity, after all, so we have to keep that in mind as well.

I would really appreciate it if you have any feedback on the points or just drop your thoughts if you can relate anything.

Let's embrace mistakes and keep hustling to build our dream venture.

Cheers!