A Complete Guide To What NOT To Do When Launching A Startup

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[credit provider=”pedrosimoes7 via flickr” url=”http://www.flickr.com/photos/pedrosimoes7/6173557964/”]

Everywhere you look, startups are springing up all over the map. Everywhere you go, tech people are lounging around discussing ideas and making them come to life.According to the Phoenix Business Journal, investments for U.S. startups are on the rise to nearly pre-recession investment levels. In fact, they may be our secret solution to getting out of the recession.

We spoke with Allen Steigman, co-founder of Soletron — a social network and e-commerce platform for retail — and Gauri Manglik, co-founder of Fondu — a social network for reviews — about what not to do when launching your startup. These rules apply whether you’re still brainstorming business ideas, or you’re already pitching investors.

 

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[slide
permalink=”dont-think-that-things-will-just-come-naturally-to-you-because-youre-an-entrepreneur-think-of-ideas-pick-up-the-phone-and-do-the-work-1″
title=”Don’t think that things will just come naturally to you because you’re an entrepreneur: Think of ideas, pick up the phone and do the work”
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[slide
permalink=”dont-put-off-the-legal-groundwork-2″
title=”Don’t put off the legal groundwork”
content=”Allen Steigman told us:

Aspiring entrepreneurs need to understand the implications of all the different kinds of legal structures (LLC, S Corp etc), and also to make sure that all formation docs are created properly (operating agreements etc). A lot of individuals put this off when I believe it should be one of the first actions taken by an entrepreneur.

As opposed to jumping head first into the business, it is important to have these groundwork discussions on Day 1 with all stakeholders (partners, investors etc), because a lot of times there is a disconnect between them, and these details need to be worked out from the get go. It is better to have these discussions earlier than later in the company’s lifecycle.
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[slide
permalink=”dont-be-afraid-to-learn-faster-than-anyone-else-which-means-its-ok-to-make-mistakes-early-in-the-game-3″
title=”Don’t be afraid to learn faster than anyone else — which means it’s OK to make mistakes early in the game”
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[slide
permalink=”dont-forget-to-reach-out-to-mentors-and-advisors-who-have-done-it-before-and-believe-in-you-4″
title=”Don’t forget to reach out to mentors and advisors who have done it before and believe in you”
content=”Gauri Manglik started her first startup as an undergraduate student at New York University. With some great mentors, Manglik and her team launched SpotOn at a TechCrunch Disrupt in May 2011 — approximately a year after the idea formed.”
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[slide
permalink=”dont-forget-that-you-get-what-you-pay-for-especially-when-it-comes-to-talent-5″
title=”Don’t forget that you get what you pay for — especially when it comes to talent”
content=”Steigman told us that his team ended up spending more money in the end compared to if they had just forked over more money to get the proper people on board in the first place.”
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[slide
permalink=”and-if-you-dont-have-a-lot-of-money-dont-be-afraid-to-compensate-your-team-with-equity-6″
title=”And if you don’t have a lot of money, don’t be afraid to compensate your team with equity”
content=”Steigman says:

When you launch a startup one of the most important variables is the team associated with the venture. It is important to identify and properly compensate members within your budget constraints. Because most startup are cash constrained in the early stages, this involves granting equity to employees. You can either have a whole lot of nothing or less of something much greater in value.
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[slide
permalink=”dont-forget-that-this-will-take-over-your-entire-life-7″
title=”Don’t forget that this will take over your entire life”
content=”‘If you’re chilling on a Friday night, nothing’s getting done,’ Steigman told us. ‘If you don’t finish by the deadline, everything you’ve worked for will go down the drain.’

In other words, people think that launching a startup means you’re your own boss. What it really means is that if you don’t do it, it won’t get done — at least in the beginning.
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[slide
permalink=”dont-assume-people-will-be-as-responsible-as-you-are-8″
title=”Don’t assume people will be as responsible as you are”
content=”Follow up with people. You can’t expect them to drop their schedule and come looking for you. In other words, if you email someone, don’t assume that they’ll read your email on time, adhere to your requests on time and have it done for you on time.

It’s up to you to call them again and again, Steigman says.”
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[slide
permalink=”dont-forget-that-you-need-a-partner-you-can-trust-theres-a-difference-between-getting-a-beer-with-someone-and-having-to-call-them-at-3-am-for-work-9″
title=”Don’t forget that you need a partner you can trust: There’s a difference between getting a beer with someone and having to call them at 3 a.m. for work”
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[slide
permalink=”dont-neglect-your-physical-health-10″
title=”Don’t neglect your physical health”
content=”‘It’s like a long game of chess,’ Steigman says. ‘If you don’t take a few minutes to recoup, it’s going to be bad.'”
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[slide
permalink=”dont-forget-to-develop-a-thick-skin-not-everyone-will-be-sold-on-your-idea-at-first-11″
title=”Don’t forget to develop a thick skin. Not everyone will be sold on your idea at first”
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[slide
permalink=”just-do-it-12″
title=”Just do it”
content=”‘I find that a lot of young entrepreneurs make excuses for themselves, saying that they don’t have enough experience yet and end up working in Finance or some other unrelated field,’ Manglik says.”
image=”http://static.businessinsider.com/image/4ee8ddebeab8eaa721000013″
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[slide
permalink=”now-check-out-the-best-of-the-best-13″
title=”Now check out the best of the best…”
content=”Click here for the 20 best new startups of 2011>
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