Avoid common startup mistakes.

Avoiding some common mistakes startups make is essential to boost performance. So here are some best practices to avoid the 3 most common startup mistakes. The most common startups problem 

Practice 1: Validating your product 

One of the main reasons why startups fail, is the lack of market need for their product. What often happens is that when startup founders do their market research, they fail to validate their product. The first thing you will need to ask yourself during your market research is, “what type of problem am I going to solve with my product?’. most common startups problem 

In order to answer this question, you could use a quadrant like the one below.  The horizontal axis represents how difficult the problem is to solve while the vertical axis stands for how much impact the problem has on society. You could start off, for example, by creating a service or product that solves an easy problem with a high impact on society. As a result, the development and implementation of the product or service will cost you the least amount of effort and time.

And don’t forget to validate your product-market needs in real life! You might want to talk with a few potential customers. While learn what they think about your product keep in mind that people tend to give socially acceptable answers sometimes. In other words your results might be biased, but don’t worry, there are more creative ways to avoid this problem. A great example is the validation of Buffer. 

Practice 2: Acting strategically (only making essential expenses)

The second most common startup mistake is not acting strategically early enough, thus, running out of cash. The first strategy that you could apply is to go lean. In other words, try to keep your expenses low whenever you can, and ask yourself, “Is this an essential expense?” “Are there any other cheaper alternatives?”. The same argument holds for raising funds; are there other alternatives to an investor? The answer is yes, and you should definitely consider them! For instance, start working with a co-founder or CTO and give them shares. Find someone who can do the task and help you run the business at the same time. Keep in mind that the earlier the stage you are in, the harder it becomes to raise funds. most common startups problem 

Practice 3: Building the right team 

Finally, a common mistake startups make is underestimating the importance of a good team. 

You might be wondering how you can ensure you have the right team? Well, here are two approaches you can use. Firstly, from a legal and practical perspective, you could create an equity plan, also known as vesting period. This method implies that you give out a portion of your company’s shares to the person you will work with. For instance, you will give out 20% of your company’s shares to your co-founder after 2 years, depending on the company’s size. You might also apply a cliff period so that after a shorter period, for instance, 1 year, your co-founder will receive a portion of the equity. This method serves as a safety mechanism to not lose all of your shares if you and your co-founder are not a match. 

From the HR perspective, you could do all the assessments with the potential person you will hire during the interview, to ensure that each person in your team has the right functions. For instance, you might want to look for a CFO and CTO sensitive to risk, a salesperson, and someone with experience in business development. Moreover, you should build a team where different expectations and levels of commitment are clear because otherwise, you will have a dysfunctional team.

Conclusion 

Overall, avoiding the common startup mistakes is possible, but at the same time, it might be challenging to do everything on your own. Mentors are there to help you! More specifically, they can help you prevent mistakes that sometimes are difficult to recognize and that may cause a substantial negative impact on your startup’ performance. Containing these mistakes is essential for faster growth. Approaching the right mentors can help you speed up your timeline from 4 to just 1 or 2 years. In addition, a mentor can introduce you to public and private partners, new talents and investors that are willing to work with you.