Launching a startup is, for all intents and purposes, one of the hardest things you’ll probably ever do in your life. It’s a giant leap of faith and one that involves a constant learning process for as long as your business exists.
Not to mention your passion for your startup tends to erode as time goes by, what with all the research, planning, and marketing you need to before your launch. And in the back of your mind, you’ll probably worry if you missed something or forgot to include a critical to-do in your plans.
In this article, I’ve put together a number of simple dos and don’ts to help guide you across the rocky landscape of startups. Starting a new business is always risky, but that’s what makes it so fun and rewarding in the end.
1. DO Your Research
Many people often think a good idea is all it takes to start a business. But ideas are so common, and chances are, even if you think you have a truly unique idea, someone’s thought of it before.
Facebook? Dating sites and Friendster were way ahead of the curve.
Amazon? eBay came first.
My point is that ideas are easy to find. But the thing that takes a great idea and turns it into a great business is execution. And for execution to happen, you need market research, which basically answers these questions?
- Is there a market for my business?
- Do you understand your target market?
- What are my products and services?
- What problems will my business solve?
- Is someone else doing it?
Without proper research, you can’t make reliable forecasts of market readiness, which can lead to disaster within the first few months of your startup’s existence.
2. DON’T Jump on Bandwagons
One of the fastest ways for a startup to die in its first few months is if chases the product mechanic instead of answering the unique demand and reason for that product.
Simply put, if you think the product mechanic for a photo-sharing app will work for a video-sharing app, and want to build your startup around that premise, you’re taking a HUGE risk
Don’t just jump on bandwagons and copy the latest trends. Instead, do your research on what consumers need, using the results to develop a way to answer their needs.
The need should determine the product, not the other way around. In other words, you can’t make assumptions based on a product certain model, and make a new product hoping that it will do the same.
3. DO Have a Partner
Single founders will almost always find it impossible to get funding. It’s not a coincidence why successful startups were helmed by at least 2 founders.
- Apple? Steve Jobs and Steve Wozniak
- Facebook? Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin and company
- Snapchat? Evan Spiegel, Bobby Murphy, Reggie Brown
As such, a business partner is a natural solution, as you can have someone to share in the work without worrying about pay—at least until you get funding.
Do note that business partnerships can be a fickle thing. And in my many years in business, I’ve learned firsthand why many business partnerships fail, with reasons ranging from personal differences, poor communication, confrontation, different goals, and a lack of time.
3. DON’T Get Carried Away by Positive Feedback
Most startup founders are ready to get thrashed by their potential customers, peers, and venture capitalists, but what many of them don’t expect is to get a ton of positive feedback.
While positive feedback is always a great thing to hear, I’ve seen how startup CEOs fall into the trap of confirmation bias, especially in the early stages of their startup. What happens is the CEO, who naturally loves positive feedback, overvalues the good things people have to say about his company, which affects his decisions and judgment.
But unless the positive feedback actually translates to sales or funding, all you have are words. Kind words, sure, but words that have no effect on your bottom line nonetheless.
Intrigue vs. Appeal
If a venture capitalist or prospect looks at your product, tells you it’s exciting but doesn’t actually invest in your company or pay for your product, you have something that’s intriguing, but not appealing enough to warrant any money.
You’ll see this scenario many times in the startup landscape: promising companies with exciting ideas that failed to take off because of a lack of focus, or creating a product that’s all bells and whistles, but doesn’t actually solve problems.
4. DO Be Careful With Who You Bring On Board
As a startup owner, it’s important to keep your ear to the ground for great talent just waiting to be tapped. However, talent is just one part of the equation. Work ethic, coachability, and a shared vision are just as important factors when choosing a potential member of your team.
So how do you start?
References offer a great way of gauging a candidate’s reliability, more so if it’s an internal recommendation. When looking at a resume, always check for a reference to an old boss or former employer. Remember, your startup’s reputation is one of your main bargaining chips, so it’s important for an applicant to have people who can vouch for him.
You can find more pointers on hiring employees in my article, 6 Traits Every Employee Must Have.
5. DON’T Underestimate the Value of Legal Assistance
A legal battle is probably the most disastrous thing that could happen to your startup. Even if you’re completely and 100 percent innocent, it still won’t change the fact that a lawsuit could last for months to years.
And that’s a distraction that could cripple a startup’s potential, taking away money that would’ve otherwise been used on R&D or marketing. Simply put, lawsuits are expensive, time-consuming, and emotionally and mentally exhausting.
So even if you don’t think you need one now, get a reliable lawyer on your team ASAP. When things go awry, at least you have some on call to represent you in court and help you to protect your business, its ideas, and assets.
6. DON’T Ramp Up Too Soon
Any startup would be thrilled with the prospect of scaling. After all, growth is a good thing, right?
Well, it’s not so black and white. While growth can translate to increased profits, you should only scale if you’re confident your business processes are problem-free and you have product/market fit.
You’ll often hear about “growth hacks,” but these all depend on whether or not your product is actually ready for market demand, otherwise you’ll only hurt your brand’s reputation.
Knowing When to Scale
Pay attention to your startup’s key performance indicators (KPIs), which should tell you if your product conversions have achieve a target product/market fit that signals the need to scale. Your KPIs will tell you if your products or services are doing the job people are paying the, to do. Make sure you get a positive answer to this question, otherwise scaling prematurely will only burn you in the end.
7. DO Invest in the Right Tools – DON’T Cheap Out
Startups need to make several investments even in their early stages, which is why funding is so important.
By investments, I’m not referring to office supplies, but technology tools: servers, marketing SaaS, CMS, software, and other similar tools.
As you might have guessed, these tools will cost a pretty penny, but it’s not money wasted at all. Andp if you skimp with these tools, such as analytics and SEO software, the problems they cause might hurt your business to the tune of thousands of dollars. If a tool’s price seems too good to be true, it most likely is.
8. DON’T Be Too Eager to Move Into an Office
Some of the world’s largest corporations had humble beginnings. I’m talking ‘garage humble’. So there’s no reason to be insecure about not having an office address.
And besides, who needs an office when you can go remote? When your resources and cash reserves are low, you need to take drastic measures to ensure your startup’s survival.
And when it comes right down to it, if you look at the cost-to-benefit ratio of an office, it turns out not to be a necessity if you make the right changes to your business in terms of business processes, hiring, and company culture. In truth, offices are overrated, especially when you can do so much on a computer connected to the Internet.
Of course, the question of going office-less will ultimately depend on the nature of your business and its unique needs. If you value face-to-face customer interaction and know it has an effect on your bottom line, then having your own premises might be critical.
9. DO Focus on Sales
Many startup owners sometimes miss the forest for the trees, spending far too much time on design, their website, and other things rather than going out there and closing a sale. These things cost money, and unless you have a client to build your profits from, you’ll soon empty your reserves.
This may seem like common sense, but it’s something that should be mentioned nonetheless. You should be selling first before anything else.
10. DON’T Be Afraid to Go Out and Meet People
As a startup owner, it’s absolutely necessary to go out there and get your hands dirty. If you’re serious about getting VC funding, you need to go out and build relationships with the people important to your business and industry.
Talk to your potential customers and find out what they want when buying your product or services. Ask what their pet peeves are and learn out how to make them happy.
You should also interact with influencers in your industry, and even your competition. Simply put, you need to make your presence known. You can’t afford to keep yourself holed in, coding all day long.
11. DO Be Ready for Failure
Embrace the possibility of your startup failing. As much as 90 percent, or 9 out of 10, startups fail, so the odds aren’t exactly in your favor.
But don’t let that burst your bubble. The key is learning how to fail—I know, sounds like something Mr. Miyagi would say.
But it’s true. Failing quickly is better than failing over a prolonged period. If you’re gonna walk into walls, it’s better to be running into them full speed. After that, you get up, dust yourself and move on.
The best thing you can do for your startup is to brace yourself for failure, learn as much lessons from the experience, and move on to the next endeavor.
Remember, startups are all about trial and error. So rather than toeing the line all the time, you need to accept that you’ll get things wrong. Just be sure you’re not making the same mistakes over and over again.
The goal of this guide isn’t so much to tell you what you should or shouldn’t do, but rather to help you avoid some of the most common mistakes other entrepreneurs make.
This shouldn’t stop you from taking risks all because you’re afraid of making mistakes, because you won’t grow with that mindset.
Every single entrepreneur has made and will continue to make mistakes. It’s just how the world of startups works. The key, however, is to learn from these startup mistakes to minimize the damage they might incur on your business.
Do you have any particular dos and don’ts you’d like to recommend for startups?