Making your own business from scratch is difficult. That’s why most entrepreneurs commit mistakes, especially those who are new.
Sadly, entering the corporate world is quite a challenge and success rate is quite slim. To learn from those who experienced, I would like to quote Michal Ugor, a travelling entrepreneur, which I find to have the best advice which first-time entrepreneurs should avoid:
1. Trying to build a product for everyone.
He, who tries to please everybody, pleases nobody.
2. Lack of focus.
All entrepreneurs are cursed with having too many ideas that are too tempting not to be executed. The point is to be able to put everything else aside and focus on one with best timing and most potential. Jack Dorsey mentioned somewhere that he had his Twitter idea almost a decade before he started it and put it in shelf – which is his way of clearing distractions.
3. Ignoring cash-flow.
As already mentioned in many answers confusing cash-flow or ignoring it is surest way to fail.
4. Quitting too early + not failing soon enough.
Quitting and failing are 2 different things. Failing soon is about not wasting time (or failing in love) with features once you have enough evidence they aren’t going to make profit – you should seek that evidence all the time. Quitting on another hand is giving up to circumstances while knowing that what you are doing can work and will make you happy.
5. Wasting time on what competition does.
Someone once famously tweeted: “If you spend all your time looking at your competition your product will end up looking like competitions ass.”
6. Picking the wrong co-founder and not having a shareholder’s agreement in place.
Talking or wishing and doing are to separate things, when you are motivated and excited everyone feels like a winner. All people tend to overestimate themselves, however once it comes to action many back off or find reasons and excuses to go for the easy and safe route. Making sure you aren’t giving equity to a “co-founder” before you get a proof is what shareholder’s agreements are made for.
7. Issuing equity too early.
Many people you hire early on may only a half-hearted commitment and ambitions on their own. Once I was going to offer small part of equity to an advisor and I had a chat about it with one experienced partner in a law firm, he told me: “Why would you need an advisor who does it for equity? Get people who are excited about your product and want to help out because of that excitement and belief in it, then after a year or more you can talk about equity.”
Same thing with stock options, the ideal time frame should be around 5 years, if you give it to someone after 1 year of working they can simply walk away and take a free ride while you’re working your ass off increasing the value of their stake.
8. Too many features – overcomplicating.
Everybody knows why Apple was so successful. Here’s a quote from Albert Einstein that sums it up nicely: Any darn fool can make something complex it takes a genius to make something simple.
It’s the simplicity not complexity that sells (and makes it hard to build)
9. Not seeking or using customer feedback.
Well they may not tell you what you should build but they can surely tell what’s wrong – as Bill Gates once famously said.
Kudos to this wonderful and concise enumeration!
If you want to find out more you can visit the website Quora and search for the question: What are the most common mistakes first-time entrepreneurs make?