TradingPub @TradingPub: What is the most common mistake startups make in the first year and how to avoid it?
ANSWER:
There are several most common startup mistakes:
A) Using the word “startup”. Please, for the love of god. You are a business like any other business in the history of commerce. Provide more value than the cash a customer has and you are a good business. Provide less value and you’re perhaps a good feature (instagram) or perhaps just a bad business (like 99.9999% of businesses that provide no value).
B) Raising money. Most startups want to raise money right away. What are you raising money so fast for? For one reason: to get a salary. And to pay others. First make sure you have a good business. It’s a catch-22 but every real business deals with it. Build your minimal product, sell it, make mistakes, tweak it, build it again, sell some more, learn some more. When you have users, revenues, and people who “can’t live without you”, then you have a business that can raise money.
But by then you might not even want it.
One thing I know: when you have a good business, raising money is easy. When you have a bad business or a business that is teetering or unsure of itself, then raising money is hard. When raising money is hard, don’t push it. That’s like going to the gym and starting off at the highest weight. You can damange yourself. Pushing investors can damage your business if you aren’t ready. Take a step back and improve your business first.