Avoid the 10 Traps That Countless Startups Fall into Every Year
Countless startups fail every year. But there are not countless reasons that they fail. “I’m talking to entrepreneurs three or four times a week, and they’re all coming to me with the exact same issues,” says Tarek Kamil, a serial entrepreneur with five launches under his belt (most recently, as founder and CEO of the communications platform Cerkl). “People are falling into the same traps over and over. If they could just avoid those common mistakes, the chances of their company being successful would significantly increase.”
He’s not the only one who thinks so. Mentors, VCs and serial entrepreneurs all say they routinely see new business owners fall prey to a common set of mistakes. So what are they? You should know.
1. Not prepping your life
No one would show up to run the Boston Marathon without training first. The same should be true of startups. You need to warm up with some prelaunch training, from getting proper rest and nutrition to shoring up relationships. “You have to be rigorous about making sure you’re ready and that every area of your life is in check,” Kamil says. A startup will take a toll on your life, guaranteed.
If friends and family don’t understand what’s about to happen and aren’t supportive of your vision, they’ll cause personal misery, not to mention a major distraction from the business. Have a candid conversation to manage expectations. “Tell them, ‘I’m going to give this my attention, and while it doesn’t mean you’re not important to me, it may feel that way,’” Kamil says. “You need to be sure these areas are buckled up, because entrepreneurship will shine a light on whatever parts of your personal life are weak.”
2. Confusing a product with a business
In this age of apps, Atlanta-based serial entrepreneur and company strategist Eric Holtzclaw says wannabe ’treps don’t always know how to build upon their success. “A product solves a single need,” he says, “but a real business has something customers will come back for again and again.”
Here’s how to make the distinction: Do you have potential revenue streams beyond the customer’s initial purchase of a product? That’s a key factor for prospective investors, who “want to see what the next thing is and want to make sure there’s some longevity beyond what you’re offering today,” Holtzclaw says. “Are you going to license the technology to someone else? What does the business look like in three or five years? That’s a big concern from an investor perspective, and that will help you determine whether you even have a business at all.”