What’s the key to a successful startup? Well, if you ask me I’ll say its learning from mistakes, not only from your own but from the mistakes of the others as well. For any new startup, the road ahead will be filled with speed bumps and potholes, giving you plenty of opportunity to learn and grow.
Although, it’s a very painful teacher, experience is also a very powerful one too. Learning from others mistakes is always much less painful, so here are common tech startups mistakes, and importantly, how to avoid them.
- Investor and Company mismatch
Investment, one of the main driver behind any startup needs to be done right, as once done its hard to revert it later. Your buddies may be fun to hang out with, but this doesn’t mean they’ll be great investors or business partners. It’s important that you find an investor that shares the same vision as you; if you fail to do so then you’ll suffer from mission drift, which will only lead into other issues and ultimately failure.
Don’t say yes to the money just because it’s the first offer you get. Do complete research about your potential investors. Analyze their behavior throughout the fundraising process, how they approach and address different issues. This is a good indication of the type of relationship you will have with your investor.
Another thing you can do is to talk to some other people that have received capital from the same investor and find out what their experience was like. What was their response when things got a little dicey? Were they understanding and helpful? Did they quit at the first sign of uncertainty? These are all characteristics you need to be aware of in an investor.
- Understand your finances
Once your business get going you’ve got to be focused on the numbers, to keep your great tech idea from turning into a costly mistake. You should always know how much money is coming into the business and how much is going out. What do you need to break even? How much are you paying in salary? What is the cost of making your product? When will you hit cash-flow break-even?
You don’t have to be a financial wizard, just understand the basic cash-flow situation of your business. Remember if you turn a blind eye to all the numbers, you’ll end up in big trouble pretty quick.
- Hiring the wrong team
Your team is going to be what transforms your tech startup into a thriving company. Hiring the wrong people can massively upset the dynamics of your team and stop it from performing effectively. A poorly motivated team can grind the startup to a halt. There are two important factors when it comes to hiring in the tech sector:
- Hiring for technical knowledge
- Hiring for personality
Both elements are just as important as each other, although some would argue that technical skills can be improved whereas changing someone’s attitude is almost impossible.
When hiring, you should clearly define your startup mission, values, and strategic plans, to the new hires. As a startup, you’re typically a small, agile operation meaning that you can potentially grow with a high rate. In such cases, you need people who are willing to have many jobs or roles, who are quick to adapt and who are willing to put a lot of effort in.
Remember, building a reliable, competent, dedicated team to grow your business doesn’t happen by accident, you’ll have to put-in a lot of effort but once you do, you’ll see far better results over time.
- Not cultivating company culture
Company culture is the personality of a company. It defines the environment in which employees work. In other words, it’s a reflection of your (as the company head) beliefs, worldview, vision, and your mission. By embedding a positive working culture that allows people to feel valued, listened to, involved, and overall feel included in the company, will benefit your company in a variety of ways.
Especially true of startups, a great workplace culture can set the tone for your organization going forward. Employees who buy into the culture will begin to instill the mindset in their daily tasks. It’s an excellent way of setting a clear direction and sense-checking to make sure the work you are doing is meeting those values.
Moreover, a well-cultivated company culture has a direct impact on productivity and staff retention — when people feel like they belong they’re more likely the stick around. It also makes it easier to attract the best talent in the market. This ultimately leads to low staff turnover, thus saving you time when it comes to retraining, and building camaraderie in your team.
Finally, corporate culture adds to your overall brand identity, which is essentially your reputation and how people outside of your organization view you.
- Not telling your story
Your product or service may be world-changing, but if people don’t know about it, you’re going nowhere anytime soon. The act of just creating something and waiting for flocks of customer to find you and encourage others to buy in just doesn’t happen anymore.
In tech especially, the myth is that you make something and let the quality speak for itself. But if you do that, you’re very much only operating inside a bubble (that too a very small one). You’re not telling your story. Having a website is mandatory, having a clear, focused, well-planned marketing strategy is essential to spread the word of what you’re working on, and operating with an audience first mindset when it comes to any external communications is necessary. If you’re putting content out there that your audience isn’t interested-in then I’m afraid you’ll have a hard time in generating qualified sales leads.
Thanks for reading!