It’s not easy to run a start-up. It’s
not easy to start a business from nothing, build it up and take it to market
for the world to criticize and knock down. But there are things that many start-up
founders do that are not helping them gain traction and success. Some of the
things they do are just plain dumb. Here are my top picks to avoid!
1. Make investors sign an NDA
I’ve heard this
frustration from absolutely every investor I’ve ever met, pitched to or received
money from. So you trust an investor enough to ask for money but not enough to
believe that they won’t steal your amazing and never-before-seen idea?
The
cold truth: NDAs are extremely difficult (if
not impossible) to defend legally and they destroy the trust of the person
you’re meeting with. Success is in the execution, not the idea.
2. Arrive late for meetings
The immediate message
you send out when you arrive late for a meeting with a prospective client,
investor or mentor is that your time is more important than theirs. It will
definitely harm your chances of doing business with them.
The
cold truth: Don’t be late for a meeting. You
think you’re being the busy founder who has a lot on his plate; they think you
can’t organize your time or priorities properly.
3. Endlessly building instead of selling
Building a great
product is an important base to start a business from. However, at some point,
when you have a great product, you need to start selling it as a core focus of
your business.
The
cold truth: Many start-ups build their
products into the ground. A new feature isn’t necessarily going to create more
sales and generate more revenue. Making sales calls will.
4. Ignoring cash flow
The dumbest thing
that a start-up can do is ignore or forget that cash flow is a problem for
absolutely every business. Cash flow will be one of the biggest issues that any
business will face. Without cash in your bank account you can’t pay the bills.
The
cold truth: Even if that one big invoice is being
paid in a couple of months, without the money in the bank today, you can’t pay
your staff or your rent. Manage your cash flow daily.
5. Forgetting about the data
Most good businesses
have a lot of data about their customers, products and business. Ignore that
data at your peril. Data makes your product better, crisper, more focused and
helps you make gut decisions with confidence.
The
cold truth: Relying on your gut alone will
more often than not lead you into a dark place. Always back up your business
rules and decisions with the available data. If the data doesn’t support your
decision, make different decisions.
6. Skipping research
Building a solution
that is searching for a problem is a sure-fire way to blow a lot of time and
money on something that you can’t sell.
The
cold truth: Start-ups often forget to do the
simple research that asks if there is a need for the product or service they’re
selling. A simple Google search will show up competitors or if there’s a gap in
the market. Do the basics and get them right.
7. Thinking any growth is cool
It’s great when a
business starts gaining traction. When revenue starts to come in and the work
load piles up you start to think it’s time to hire staff, move into offices,
get a parking bay and other ‘grown up’ things. Growth is cool, but remind
yourself what kind of growth is cool.
The
cold truth: Growing your profit is cool.
Growing your overheads is not. With every new staff member comes complications
like HR issues, equipment purchases, salaries, and the inevitable office move.
It’s not a bad thing to work as hard as you can for as long as you can, growing
your profit with a lean and mean team. You don’t need to be a physically big
company to be financially strong.
Posted on the Entrepreneur on 9th October 2014 and written by Nicholas Haralambous, Founder of fashion startup, NicSocks.com , CEO and co-founder of Motribe.
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