Launching a startup in Nigeria or anywhere in the world is a daunting task. You have to worry about many factors ranging from finance, to the business location, sales, and several others. While some startups try to solve these problems, few of those who do, still end up unsuccessful. What many don’t realize is that it takes more than properly keeping your books, hiring the right employees, and more for a startup to truly succeed.
During a new startup’s launch, and before it is aggressively promoted in the market, there’re several important conditions that must be met for a solid foundation to be built. These common startup mistakes if ignored, could definitely mean failure for the startup.
See Also: The Top 10 Reasons Small Businesses Fail
Here are six common startup mistakes most new founders make, and must be avoided by all means!
1). Starting Out Alone:
Running a startup is a highly stressful task. Roles have to split so that each team player can avoid burnout. If the tasks leveled on one person is too extreme, productivity would drop, and the startup would experience difficulty moving forward.
Every new company has various important roles to be played. There’s a need for a good sales team, social media, finances, and more. Most of the time, three individuals usually cover all the roles that multiple individuals should, in a new company. Having three do it is a lot more reasonable than having just one person focus on all the tasks. How many highly successful companies have you ever seen that the CEO starts out as the only person in the company, and rides alone for a long time while generating huge revenues? Running alone also kills investor’s confidence in both you and your business. People rarely want to invest in loners.
2). Raising Too Much Startup Capital Too Early:
In as much as too much water can drown an individual, too much startup capital too early can drown any startup. When starting out, every startup needs to try out various growth hacking techniques. Test, break, test, break, until they figure out the hidden desires the target market truly wants. The problem with too much capital is, irrespective of the fact that the startup would not be patient enough to do silent tests for a very long time, anytime they feel they must acquire new customers, they spend so much on marketing, acquire a few customers, then do the same over, and over again.
Secondly, raising too much startup capital at the beginning dilutes your chances of a future successful exit. When the company is sold, you might own just 2% of it at that time compared to owning about 10 to 20%. It’s important you grow your startup as much as you can, for a long time with your personal finances, so when you get your first investment, you wouldn’t lose as much of your startup as you would have if you had raised too much money too early. This is one of the most common startup mistakes.
See Also: How To Market A New Product In Nigeria
3). Getting Media Attention Too Early:
The media is a very cheerful, rewarding, violent, and unforgiving space. If you want to kill a fairly good or bad product really fast, aggressively getting it on as many media channels as possible would make it die out for good. Getting media coverage at the start of your business is a no no. First focus on getting your foundation right, making it solid, ensuring your product truly solves a problem, and after tests with a lot of people, silently get on a media channel at a time.
It’s easier to piss off 100 people than to piss of 1000 people, talk less of 100,000 people. Having 100,000 people leaving negative reviews of your product would tank it faster than anything you know. The reverse is also the case.
4). Having A lot Of Co-Founders:
Starting your business with three, four, or more co-founders greatly reduces the stake that you own in the startup. When you could have started out with 50% of the company if you were just two, starting out with three other co-founders leaves you with roughly 25%. And as investments come into the company, the future exit value of your own stake tanks even further.
Also, decision making is very difficult if multiple individuals need to have a say before anything gets done in a startup. With various personality types in the business, it could prove difficult to decide fast, and this could have some negative effects on the startup. Even a full shutdown could happen.
Avoid this common startup mistake by all means possible. Too many voices could end your business.
See Also: 7 Ways To Immediately Increase Your Business Revenues
5). Bad Communication:
Always share your plans with every member of your team. Keeping things from them and expecting them to go along with whatever you say would lead to a lack of trust between you and them. You may have your plan rightly placed in your mind, with every step to be taken, but if you don’t share it with your partners, get feedbacks; whether good or bad, they’d come to distrust you. And even if the plan you already mapped out was truly as good as you thought, some of your partners would mostly go against whatever it is on the long run. Bad communication could damage your startup’s relationship.
6). Being Too Impatient:
Every founder can’t wait to have his/her startup making waves. The rumbling desire to have your business to be the next Facebook, Instagram, Google, Jumia, Dangote, etc really fast can be highly intense. The longer it takes to get there, the more worrisome it gets. What people need to understand is that different businesses grow at different rates peculiar to themselves. Company A can’t grow at the rate of company B. As long your startup solves a real problem, and has gained acceptance, you need to take your thoughts away from aggressive growth, and focus only on right growth.
Being too impatient would cost you a lot. You’d make too many mistakes, and when you eventually realize it, it’s already too late. Grow at you own pace, but more importantly, grow right.
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What are your thoughts on these 6 common startup mistakes? Let me know by leaving a comment below.
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Hello
Very true and there are a lot of other factors that contributes to the failure of the startup. I would think “Listening to customers” is not what a lot of startups are doing. However, more often, the situation is that they do not know who their customers are.
So, this is what I learned from my startup. And I hope, future startups will take care of important factors, which can cost them their time and money.
Hi Rubel,
You’re absolutely right concerning the fact that most startups don’t listen to their customers and also don’t know who their customers are.
I remember growing up, when i was 13, I tried to sell a pack of diskettes to people in my junior high class. I didn’t sell a single one. It was until years later i understood why that didn’t fly. Little to no one in my class then even used a computer. This same similar scenario iterated for several more years through different products, before i finally learnt.
Thanks all the same for your contribution.
[…] your venture has been rapidly headed towards a downward slope, probably because of some factors, it’d would be safe then, to stop all operations, and reassess your business […]
wow……am very impressed by ur lectures & start up experience & tips..thanks & God bless
Thank you for reading, Jeremiah.
Do have a great time!