To launch a successful startup, you need to be relentlessly — or better yet, obsessively — optimistic. But at the same time, you also need to be a down-to-earth pragmatic realist. Otherwise, instead of achieving your vision, you’ll likely find yourself forced to shut down, or maybe even file for bankruptcy.
To help you avoid those horrific possibilities, here are five fatal mistakes that many startups make — but that you can wisely avoid:
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1. Mistaking a great product, with great demand for a great product.
Of all the pitfalls that ensnare startups, this is arguably the biggest and most destructive. It’s not enough to have a great product, or even a groundbreaking, game-changing, or revolutionary product. There must also be great demand for that product. If this isn’t the case, then you’ll be obliged to spend hundreds of thousands — and maybe millions — of dollars educating your target marketplace. And unless you have a bulletproof patent, there’s a very good chance (we’re talking about 99% here) that by the time you’re done priming your customer base, one or more deep-pocketed competitors will swoop in and steal your thunder — leaving you on the outside looking in.
2. Not choosing the right price position.
Unless you’re selling generic commodities (and hopefully you aren’t), you don’t have to have the lowest price in your marketplace. That’s a race to the bottom that is invariably won by big box stores in the B2C space, and massive wholesalers in the B2B space. Yet with this being said, your price position has to be competitive and, at the same time, give you enough margin to pay your bills and sustainably turn a profit. For example, if you’re launching a limo company, then make sure your schedule of fees (e.g. stretch limo rates, party bus rates, etc.) works for both your customers and your bottom-line.
3. Not focusing on core your strengths.
Startups need to be fluid and flexible, because the process is iterative: the more you do it, the more you know (and can use that actionable business intelligence to do it better). However, there is a difference between making strategic adjustments to exploit opportunities and mitigate risks, and losing your grip on core strengths and spreading yourself too thin. For example, if you launch a mobile massage startup that travels to businesses and gives stressed-out employees a much-needed back rub, then don’t start selling essential oils or dog walking services. Stay focused on your core value proposition, and build a reputation for excellence in your niche. You don’t have to necessarily stay in your lane all the time, but you should stay on the road vs. veer off and drive through a cornfield or into the forest.
The Final Word
Launching a startup is exciting, exhilarating — and at times, it can be terrifying. By deftly avoiding the mistakes noted above, you’ll greatly increase the chances that your entrepreneurial journey will be a long-term success, instead of a short-term struggle.
About Carson Derrow
