There are some obvious and well documented mistakes many startups make in their early days, including growing too quickly, taking on the wrong mix of funding and not validating a product’s market fit.
But there are a few mistakes which don’t even register as a blip on a founder’s radar.
Australian startup incubator BlueChilli’s advisory team, including startup advisers Catherine Eibner, Colette Grgic and Marcus Marten-Coney and chief growth hacker Alan Jones, have come up with five of the most surprising mistakes they have seen new companies make.
1. Not blogging the whole journey
At the beginning, you tell yourself you’ll write blog posts regularly, knowing it will help potential customers and investors with their due diligence. Then you get a bit worried that being honest about your mistakes and setbacks might be damaging, and then you find not as many people reading it as you’d hoped.
Before you know it, it’s been a year since you last blogged. Big mistake.
Most startup journeys only last a year or two but they are jam-packed full of once-in-a-lifetime experiences. If nothing else, a blog provides you, your team and your friends and family with a diary of those crazy two years when you built a startup.
2. Not measuring the whole journey
Too few startup founders understand how to measure their performance in the early stages when their idea is still not validated – but it’s absolutely critical!
Being crystal clear on which metrics differentiate success from failure for the stage you’re at, and being diligent about measuring those metrics continuously will help you determine when and how to persevere, pivot or pull the plug. Being transparent and accountable for your key metrics will help to focus your entire team when you’re strapped for time and resources. It will also force you to identify when and how things went wrong, creating a culture of constant learning and iteration.
3. Assuming you’ll be a millionaire without thinking about how customers will pay you
It seems blatantly obvious, but so many startups forget that at some point, the business will want to receive some money (income) from their customers.
So much effort goes into validating their idea, getting the marketing messaging right and even building entire websites and landing pages for people to sign up on. But when it comes time for new users or customers to hand over their cash (or credit card details) the receiving funds process has often been overlooked.
It should never be an afterthought to set up business bank accounts, payment gateway, merchant facilities and a cloud accounting system such as ReckonOne or Xero. If you’re using a traditional bank, this setup process can take months and requires business plans and legal documentation. Use Stripe or Braintree to speed up your credit card billing systems.
4. Keeping your idea secret
Having a great idea is important but isn’t the most important success factor.
The reality is, it’s probably not quite as unique as you think. Through sheer weight of global population it’s very likely that someone else also has the same idea, and may already be building a platform for it right now. At Bluechilli, we see more than 2,000 ideas pitched every year. With these numbers it’s not unusual to see similar ideas and business models.
So what’s more important than a great idea? The execution of that idea.
If you’re serious about being and entrepreneur and stepping into the unknown pursuing your dream, don’t hold onto it too tight. To give it a chance of success, you need to open up, talk to as many interested people as possible, get them engaged, enthused and sharing your vision.
There’s an old saying “you need to get the right people on the bus”, what that basically means is a strong idea needs to attract resources, money and the right people to create an a team for the best chance of success and standing out amongst the noise.
So forget the NDA’s, and risk being seen!
5. Not thinking global and mobile from the start
Last month for the first time more people accessed the internet from a mobile device than a PC or laptop, an important milestone that will see the mobile internet audience dwarf the laptop/desktop audience very soon.
Startup founders are often old enough to be members of the ‘laptop-first’ generation, failing to think through how dramatically a ‘mobile-first’ consumer market will change user behaviour and online economics. Just think how much less useful Uber would be if it didn’t have an awesome smartphone app.
An important factor in the high market capitalisation Uber enjoys is the way the business has been able to scale out to multiple geographies in record time. If two startups with the same idea have the same access to resources and capital, then it is the startup that claims a global customer base that wins in the end, every single time.
BlueChilli has just launched an online education program for entrepreneurs and startup founders. There’s more here.