STARTUP MISTAKES

Hello everyone!
I am enamoured of the idea, that building a startup is so like a game of Lego, which needs to be
built brick by brick, block by block, matching every key to its lock, going harmoniously by the
clock, not too soon, not too late, with not too much, or too less, on the plate! In other words,
doing the fine balancing act, with a strong foundation.
To get started, this blog intends to do a post mortem on the common mistakes that plague
startups, so much so, that 90% of all startups, which means a whopping 9 out of every 10
startups, fail! These abysmal figures are enough to make any ordinary person cringe and
dissolve his entrepreneurial spirit. But whoever thought that entrepreneurship was for the
weak kneed and the weak bellied, was mistaken. For it takes more than just an idea to be a
successful entrepreneur and by no stretch of imagination is this less than an arduous journey!!
So lets look at the errors of judgement, as I would like to call them, instead of mistakes that
happen at various stages of a startup. These are undoubtedly, interrelated, but one of these
could be the key or the trigger factor for a particular startup to fail.

To begin with, the idea and the product developed therefrom, per se, need to be understood. If
one could answer the question, What is an ideal idea? we would be well on our way to solving
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one of the most fundamental flaws of an unsuccessful startup. Any idea whether de novo,
original one or a tried and tested one which is executed in a unique way, has the potential to
morph into a lucrative business. Ideas which serve the purpose of the masses, rather than a
niche clientele fare better. Although the niche market too has many takers now. The more
people it caters to, the better. There is evidence that ideas which have intellectual capital and
which are based on R&D have a greater chance of succeeding into healthy businesses,
compared to those which dont. Small ideas that cannot be scaled to the desired extent tend to
die a natural death. Ideas, ideally, need to be user- defined and user-ratified, ensuring that the
startup is making a product that the users want, and which solves their problem. Its also
desirable that the idea be flexible, able to align itself to the demands of the market/users; that
being the key to survival. On the flip side changing ideas too frequently also doesnt augur well
for the company. Further, it pays, if there is a long term of vision of ROI being atleast ten times
that of the investment.
To sum it up, an idea should be user-defined and validated, cater to maximum number of
people, scalable, flexible and able to make atleast ten times the funds that have been invested
in it. So anything lesser than this has a high chance of failure.
Closely related to the idea, is the product. The most common reason of failure is that the
product built, is not optimum. By optimum product it means one which definitely meets the
demands created by the users. Especially valuable is the feedback given by the early adopters
(on the MVP or minimum viable product) which gives an inkling of how good the productmarket fit is i.e. the key to every lock!! Once this is established, there is no looking back. What
becomes crucial now is launching the product in a well-researched market. And whats even of
greater importance is the timing of the launch Not too soon, not too late..impeccable!
Launching too early, when the market is not ready or procrastinating the launch till its too late
by which time the competitors are already in the game, kills the original product even before it
has reached its desired destination. Launching a product that is not optimum and scaling up
before the product is perfected called premature scaling, could be disastrous, as then the
startup has a product that no one wants to buy.
The next most important factor which triggers the down-fall is related to finance. Raising too
little or raising too much of money, have peculiar issues of their own. Funds raised, ideally,
should be enough to build a credible product. Its always best to raise finance in bits and pieces
which are used sensibly, without any wastage and arbitrarily should be available for atleast 18
months as a buffer. A phenomenon associated with this situation is a cash burnout which
happens when a lot of people are hired unnecessarily, which adversely affects every area of the
functioning of the startup. Apropos this, theres always a dilemma of whether one has spent
more or raised less. The idea would definitely be to avoid that costly mistake.
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On this note, its worthwhile to contemplate that raising surplus funds from VCs effectively
sounds the red alert. The investors are watching founders like hawks, directing their moves.
With so much at stake, this hampers the plans and progress of the startup as it is difficult to
change tracks easily for e.g., to address another segment of customers, say from B2B to B2C or
to even pivot around the idea or the product. But what would hurt the startup the most is not
having a revenue model, neither in the beginning of the startups journey nor as it grows.
Startups depend heavily on the team that the startup comprises of i.e. founders and cofounders, and later as the startup scales, the employees. What matters is the confidence,
passion and high degree of motivation from the CEO right through the ranks, followed by the
level of expertise the right person for the right job. The team needs constant motivation to
keep going despite failures and the correct form of incentives in terms of equity. An absence of
one of the above factors, and sometimes an absence of networking and involvement of a
mentor to support it, can prove to be costly. A single founder invariably lacks this support and
maybe doomed to crash very early on. Disharmony among founders and co-founders is usually
the order of the day and could spell disaster if one of the key people leave the startup.
The mistake here would be a lack of communication and not taking the initiative to sort out
interpersonal issues.
There is nothing like competition as an incentive to perform and up the existing standards but
competition can kill if the startup cannot withstand it. If the startup does not keep track of
competitors very early on and remain flexible to change ideas and products to stay on in the
market, it is bound to shut shop and head for an early exit.
Couple this with half-hearted efforts, and an unwillingness to take the plunge and work
wholeheartedly towards achieving what one has set out to achieve; thats what invariably spells
the death-knell for a startup.
To reiterate, nothing succeeds like success and its only when an idea is backed powerfully by
the collusion of human efforts chance and circumstance that it can convert into a successful
startup!!
Have a great day ahead!

ABOUT THE AUTHOR

Preeti
Consultant Radiologist
Dr. Preeti has been a consultant Radiologist for several years, a lay counsellor and a Life Skills
facilitator. She has an unwavering faith that there is an abundance of goodness in our universe.
She thrives on empowering others, and her wish is to reach out to people and to our
environment, through her writings. A crazy sense of humour, music and art have contributed to
a grace and compassion in her life.