18 mistakes that startups die
A well-known programmer and entrepreneur, Paul Graham , who created the first interactive web application on the Internet in 1995 (which they now consider to be Web 2.0 applications), gives advice about creating Internet startups. More precisely, these are warnings about errors that should not be made. On his website, he published a list of 18 errors that are fatal to startups.
1. The sole founder
There are few successful startups that would be founded by a single person. After all, one founder - this means that he did not have like-minded people, even from among friends. A very wake-up call.
One person is very hard to manage a startup. There is nobody to consult with, no one to dissuade from foolish decisions, no one to celebrate success.
2. Poor location
In each country there are places that are most suitable for creating IT start-ups. In America, Silicon Valley ranks first, then Boston, Seattle, Austin, Denver and New York. In Russia, the best soil for IT-business, of course, in Moscow. Even the most successful Internet startup based in Surgut is almost doomed to extinction.
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3. Marginal niche
Many startups make the same mistake: they choose a too narrow thematic niche in the hope of avoiding competition. This is not a good strategy, which is explained by fear. To avoid it, you can advise to make a business plan as if from the outside, not thinking about what you personally have to do this business.
4. Derived idea
Many of the startups are imitations of some existing company. If you look at successful startups, you can see that they usually did not copy anyone, but tried to solve some still unsolved problem. It is desirable that this problem prevented the founder of the company personally, that is, that he was looking for a solution for himself. Simply identify the problem and imagine a hypothetical company that could solve it.
5. Stubbornness
In some areas of human activity, perseverance in achieving the intended goal is very important, despite all the difficulties. The foundation of a startup does not apply to such areas of activity. This business is more like a scientific experiment, when you change your behavior depending on current results. No need to dwell on the original plan.
6. Bad programmers
These guys are able to ruin any startup. If the founder of the company is a programmer himself, then he is unlikely to hire bad workers, so this problem will not affect him.
7. Wrong platform
During the first “dotcom bubble”, many startups failed because they chose the Windows platform. Or take Java applets that killed almost 100% of startups that chose this technology as a platform.
8. Slow start
As programmers know, the last 10-15% of the project are always the most difficult. Because of this, startups often unnecessarily delay the launch of a project. This can be disastrous for business.
9. Premature launch
Of course, the delay in opening killed a hundred times more startups than rushing, but starting too fast can also be fatal. The problem here is that you risk reputation. If the first users do not like the system, others may not come.
10. No specific user.
You can not create a service that users like if you do not understand these users. We have already mentioned that successful startups are often created primarily for themselves. If you create a service for others, then you need to clearly understand these people.
11. Too small investment
Each startup at the beginning of its development, of course, does not bring any profit. But if you do not invest enough money in it, then it will never bring this profit. The more venture capital funds are attracted, the more time a startup has to succeed. Money means time.
Startups can be advised to start a business by creating a working prototype with minimal investment, and only then attract more serious financial resources.
12. Too big expenses
The classic way to spend money is to hire a lot of people. Here you can advise to pay off with employees not by salary, but by a share of property. This will reduce costs and increase loyalty and diligence of staff.
13. Too much investment
It is clear that the lack of money leads to sad consequences, but an excess of finance can also have a negative effect. Investors interfere with the management of the company and demand a return on investment. In addition, you will lose a lot of time if you decide to start looking for investments in large amounts.
14. Improper communication with investors
Of course, investors constantly intervene in the management of the company, although this is not their business. Yes, you can just ignore them, like annoying flies. But if investors receive a "golden share", then they are de facto at the helm of the company. This can also lead to the demise of the business.
15. Money instead of users
The founders of a startup always have to find a compromise between the desires of users and the requirements of the business model. The advice is this: at the first stage of business development, do not even think about the business model. Think only about what users need.
16. Reluctance to get dirty hands
Almost every programmer would prefer to do what he likes, program for a salary, just not to get into a dirty business. It is better to entrust someone else to deal in transactions, finances, investments and the like. Even Larry Page and Sergey Brin, when they developed an outstanding search algorithm, like real programmers, immediately tried to sell it to someone. But then they were able to convince themselves and founded Google .
17. Conflicts between the founders
Such conflicts happen surprisingly often, with the result that one of the founders can leave the company. It happens that without this person the further development of a startup becomes impossible.
Tip: no need to start a business with someone you don’t like.
18. Development at half strength
It is very difficult to achieve maximum success if the founders of the company do not give their brainchild all their time. If they, for example, are engaged in this project in the evening, after work. Many founders of failed startups did not leave their main job. The reason is that people initially doubted the success of their business.
1. The sole founder
There are few successful startups that would be founded by a single person. After all, one founder - this means that he did not have like-minded people, even from among friends. A very wake-up call.
One person is very hard to manage a startup. There is nobody to consult with, no one to dissuade from foolish decisions, no one to celebrate success.
2. Poor location
In each country there are places that are most suitable for creating IT start-ups. In America, Silicon Valley ranks first, then Boston, Seattle, Austin, Denver and New York. In Russia, the best soil for IT-business, of course, in Moscow. Even the most successful Internet startup based in Surgut is almost doomed to extinction.
')
3. Marginal niche
Many startups make the same mistake: they choose a too narrow thematic niche in the hope of avoiding competition. This is not a good strategy, which is explained by fear. To avoid it, you can advise to make a business plan as if from the outside, not thinking about what you personally have to do this business.
4. Derived idea
Many of the startups are imitations of some existing company. If you look at successful startups, you can see that they usually did not copy anyone, but tried to solve some still unsolved problem. It is desirable that this problem prevented the founder of the company personally, that is, that he was looking for a solution for himself. Simply identify the problem and imagine a hypothetical company that could solve it.
5. Stubbornness
In some areas of human activity, perseverance in achieving the intended goal is very important, despite all the difficulties. The foundation of a startup does not apply to such areas of activity. This business is more like a scientific experiment, when you change your behavior depending on current results. No need to dwell on the original plan.
6. Bad programmers
These guys are able to ruin any startup. If the founder of the company is a programmer himself, then he is unlikely to hire bad workers, so this problem will not affect him.
7. Wrong platform
During the first “dotcom bubble”, many startups failed because they chose the Windows platform. Or take Java applets that killed almost 100% of startups that chose this technology as a platform.
8. Slow start
As programmers know, the last 10-15% of the project are always the most difficult. Because of this, startups often unnecessarily delay the launch of a project. This can be disastrous for business.
9. Premature launch
Of course, the delay in opening killed a hundred times more startups than rushing, but starting too fast can also be fatal. The problem here is that you risk reputation. If the first users do not like the system, others may not come.
10. No specific user.
You can not create a service that users like if you do not understand these users. We have already mentioned that successful startups are often created primarily for themselves. If you create a service for others, then you need to clearly understand these people.
11. Too small investment
Each startup at the beginning of its development, of course, does not bring any profit. But if you do not invest enough money in it, then it will never bring this profit. The more venture capital funds are attracted, the more time a startup has to succeed. Money means time.
Startups can be advised to start a business by creating a working prototype with minimal investment, and only then attract more serious financial resources.
12. Too big expenses
The classic way to spend money is to hire a lot of people. Here you can advise to pay off with employees not by salary, but by a share of property. This will reduce costs and increase loyalty and diligence of staff.
13. Too much investment
It is clear that the lack of money leads to sad consequences, but an excess of finance can also have a negative effect. Investors interfere with the management of the company and demand a return on investment. In addition, you will lose a lot of time if you decide to start looking for investments in large amounts.
14. Improper communication with investors
Of course, investors constantly intervene in the management of the company, although this is not their business. Yes, you can just ignore them, like annoying flies. But if investors receive a "golden share", then they are de facto at the helm of the company. This can also lead to the demise of the business.
15. Money instead of users
The founders of a startup always have to find a compromise between the desires of users and the requirements of the business model. The advice is this: at the first stage of business development, do not even think about the business model. Think only about what users need.
16. Reluctance to get dirty hands
Almost every programmer would prefer to do what he likes, program for a salary, just not to get into a dirty business. It is better to entrust someone else to deal in transactions, finances, investments and the like. Even Larry Page and Sergey Brin, when they developed an outstanding search algorithm, like real programmers, immediately tried to sell it to someone. But then they were able to convince themselves and founded Google .
17. Conflicts between the founders
Such conflicts happen surprisingly often, with the result that one of the founders can leave the company. It happens that without this person the further development of a startup becomes impossible.
Tip: no need to start a business with someone you don’t like.
18. Development at half strength
It is very difficult to achieve maximum success if the founders of the company do not give their brainchild all their time. If they, for example, are engaged in this project in the evening, after work. Many founders of failed startups did not leave their main job. The reason is that people initially doubted the success of their business.
Source: https://habr.com/ru/post/4546/
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