The hasty decisions a business owner makes early on can have grand repercussions months – even years – down the road.
Something as seemingly trivial as a domain name cost my company, Blank Label, $6,000.
This is hardly an exhaustive list, so when you’re done reading, feel free to add your own thoughts in the comments.
Hopefully you’ll benefit from learning some of the foolish things I’ve seen and done.
1. Launching too early. Before Flipboard, an iPad app, launched, it generated a lot of buzz thanks to industry influencer Robert Scoble who raved about the product. Once it was live, everyone in the tech world downloaded the app to see what all the hype was about. But Flipboard was a big flop. The app’s servers were unable to support so many users at once. What could have been an impressive launch turned out to be a fantastic failure. Flipboard, for many users, was unusable. The takeaway? Before you launch, make sure your product functions well and can scale. You don’t want to disappoint all of your users from the outset.
2. Relying on vanity metrics. Ego-inflating opportunities like TV interviews and premium press are a trap. Sure, it’s nice to be featured in CNN and Forbes, but do those mentions do anything for your company’s bottom line? Always remember your business’ key performance indicators and never get caught up with things that fail to drive your startup forward.
3. Failing to use data. Anecdotes tell an interesting story, but numbers help point you in the right direction. Together, they help you gain actionable insights which help you make better business decisions. Qualify and quantify everything so there’s no room for misinterpretation.
4. Not listening to customers. You should always lend an ear when your best customers speak. They provide incredible feedback that’ll help steer your business in the right direction today so you don’t have to hit yourself over the head five months down the road for not realizing it sooner.
5. Trusting the wrong customers. Of course, the fourth point comes with a caveat. Though you should listen to your customers, you shouldn’t listen to all of them. Serial entrepreneur Steve Blank says the secret is “understanding who to listen to and why.”
6. Selling to friends and family. Don’t invite friends and family to be your first customers. Those closest to you will have incredibly biased opinions about your product, which will negatively affect your product development cycle, marketing efforts and understanding of customers’ needs. Oh, and doing so can severely strain your relationships too. Instead, sell to strangers who’ll be brutally honest with feedback because their relationship with you is transactional and they will feel little regret hurting your feelings if you fail to provide them with adequate value.
7. Pricing too low. Not only do you cut into your own margins, you invite bargain hunters who will lowball you on every purchase. Plenty of business owners I know have raised their prices with no regrets because they weeded out low-quality customers and were able to invest more in R&D, marketing and customer service. It was a win-win for everyone.
8. Being too cheap. Many entrepreneurs these days pride themselves on their ability to bootstrap. Being prudent with finances is important for small business owners, but being cheap actually costs you more than you think. Invest in more staff, productivity tools and your team to get more ROI than if you kept your money in the bank. You might even be happier because of it.
9. Setting overly ambitious goals. In a world when anything and everything seems possible, we forget to ground ourselves in reality. Often, we fantasize about building a business that will solve X, Y and Z problems. Perhaps one day you will, but every small business succeeds by first solving one problem exceptionally well. Do this and you’ll set yourself up for loads of success.
10. Making foolish hires. It’s easy to ask your friends to come and work with you, but this is a bad decision because you’re making a hire purely out of convenience, not because it’ll be beneficial to the long-term growth of your company. Hire early and often, but make sure you’re hiring the right people.
11. Rejecting friendships. Entrepreneurs, all too often, let their work consume them, and they forgo opportunities to develop meaningful relationships that do not have obvious short-term benefits. The fallacy here is in believing that everything you do today must provide ROI instantaneously. Gary Sharma suggests entrepreneurs “Leave room for serendipity.” In fact, throughout my career, I’ve met a number of incredible people who I simply befriended, without ever expecting the relationship would turn professional. Years later, those people are my most valuable resource as a business owner, marketer and writer.
What are some silly mistakes you made when starting up?