Top 10 Startup Mistakes to Avoid as an Entrepreneur

Let’s face it, 90% of the startups fail. Yes, that’s true. Well, most entrepreneurs start with the belief that they have ground-breaking ideas and they’re developing the next big thing. But, that’s far from reality. From mistimed products to disharmony amongst investors, there’s so much that can go wrong.

And, what’s more, shocking is that 90% of the time, the failure can be attributed to self-destruction rather than stiff competition. Often entrepreneurs plan on writing a failure post-mortem before even launching their startup. Why? Well, even the most optimistic entrepreneurs need their share of a reality check.

Below we have discussed some of the most common mistakes that entrepreneurs make when they launch a startup and how you can avoid them.

#1. Building Products That No One Wants

According to a report, solving problems that are appealing rather than focussing on what the market needed was cited as the top reason for failure, in around 42% of the cases. Often entrepreneurs don’t think through, they believe that their product is an exact match for market needs.

And, instead of putting in more time in understanding the market needs to come up with the right product, entrepreneurs focus on creating a product that doesn’t click. This is the reason why most startup founders fail to understand the scope of their product and its true potential in the current market scenario, leading to many pivots.

It is best to validate the idea through pilot projects or perform a beta-test prior to launch to safeguard against the risk of market rejection and potential startup failure.

#2. Ignoring Cash Burn

Ignoring Cash Burn Mistake

Time and money are both limited and require careful planning. Often new entrepreneurs face the dilemma regarding how and where to spend the money to derive maximum value. As most of these startup founders are perfectionists at heart they tend to focus more on creating a product that matches their idea of perfection, and only launch when they have achieved the benchmark.

This can be a major problem for startups since they must begin cashing in from early on for the business to keep functioning. There are ample signals which an entrepreneur must detect to avoid cash flow related issues such as less profit margin, delay in payments by clients, high payroll costs, numerous recurrent purchases, and more.

If you want to run a successful startup business, try to spend wisely only on what’s really important, negotiate payment terms with suppliers, and cut off anything or everything that’s stretching the treasury unnecessarily without contributing much to the ROI.

#3. Wrong Team

Having a great business idea is not enough to be successful in the startup game. It requires a brilliant and experienced team to bring those ideas to life. When you hire the right team it can help you move forward in the right direction and at the desired pace.

Business ideas change over time and strategies change as per the market, but as long as you are backed by the right resources half the battle is won. This is the reason why investors always lay more emphasis on the team rather than the idea. In the majority of the cases, entrepreneurs often partner with their friends when launching a startup business.

As per a study, each friendship in the founding team enhanced the founder turnover rate by as much as 28.6%. Often friends as founders can be the worst colleagues, draining you on many levels both financially and as well as emotionally. So, when selecting a co-founder for your dream project it is best to evaluate whether he/she has prior experience in the domain, will he/she be adding any value, the strengths and weaknesses, if any.

Also, if you and the co-founders don’t have what it takes to get the company going, identify those areas early on and hire a team that can help fill those gaps effectively.

#4. Premature Scaling

Did you know that Premature scaling accounts for around 70% of all startup failures? It is a common assumption that if a business isn’t expanding it is dying. But can rapid business growth kill your business? If your business is growing faster than what you are capable of handling or your product is ready for is what premature scaling is all about.

With rapid growth, there is so much going on and so much to manage that crucial aspects can often get ignored which may prove difficult to fix at a later stage. This leads to piling up of issues as time passes, which surfaces in the future all at once, putting a permanent halt to your business success story.

Therefore, it is important to move ahead at a healthy pace, understanding the requirements of existing customers before chasing new ones, hiring best staff, continually evolving the product, utilizing the limited funds wisely, and identifying target markets prior to fixing desired profits.

#5. No Business Model

No Business Model Mistake

Don’t mix your business model with the product you are offering to customers. They both are separate and should be kept that way. Most entrepreneurs often forget that the real journey begins after the customer has made the purchase. A well-designed business model not only focuses on great profit margins but also delivering optimum value to the customers.

It is best to have a well-defined revenue model for your product. For instance, you need to make sure that customer acquisition cost is kept at a minimum in comparison to the value derived in the long run. Also, once your product is in the market, you should be ready with your next move and discover potential streams to generate revenue which will eventually take you closer to your vision.

#6. Reluctance To Take Feedbacks

Usually, most founders have difficulty sharing their prototype until they feel that it is good enough. Reluctance to get feedback from potential customers can be lethal to any startup. Don’t be scared that someone will steal your ground-breaking idea or that the prototype isn’t perfect.

With technologies being more accessible to people, it is definitely not a major challenge to get a few prototypes made and get those tested by people for feedback. This should be an ongoing process where you work on improving the product until customers recognize your brand and demand for your product.

#7. Mistimed Product

Mistimed Product Mistake

Ever heard of mistimed products? It is when businesses launch a product at a time when either there is no market or technology to complement it yet. Also, there can be another scenario where a product is launched quite late. The ideal way to avoid this situation is to always ask questions, analyze competitors, and do research especially when sales don’t take off.

If your startup is experiencing such a phase it is the best time to put effort, capital, and resources in another promising market.

#8. Getting Outcompeted

Well, no business functions in isolation. Once a business idea gets validated, the market is flooded with new entrants, and your product is bound to face stiff competition. You must have heard that startups shouldn’t worry about competition, but it is far from reality.

Well, it is true that overthinking about competition isn’t healthy, but turning a blind eye isn’t great either. In fact, it might be a recipe for startup failure. Always back optimism with meaningful data when making crucial business decisions. If done otherwise, it could divert you from your vision.

Often entrepreneurs believe that they have a unique idea and there won’t be any competition. They go with minimum or zero market research, which leads to their failure as they are unaware of the latest developments that could help them stay ahead of the competition.

If you are an entrepreneur planning to launch your product anytime soon. It is advised that you conduct thorough market research well in advance. This will not only help you deliver as per market demand but also correctly position and price the product as per competitor analysis.

Always validate your idea, understand what your customers need, and also figure out how you can offer something that is better than what’s already available. Back your business decisions with data-driven insights for a great experience.

#9. Poor Marketing

Make some noise, it matters. Irrespective of how good your product is, it won’t be able to make an impact if people don’t know about it. your product may be, it’s going down if no one knows about it. One of the major reasons why most startup businesses fail is because they have poorly managed marketing campaigns.

If you have just started out, you don’t necessarily need a PR team, but you definitely need a foolproof marketing strategy to promote your brand and create a buzz. From targeting social media to authoritative magazines and websites there are ample ways to spread the word and enhance brand visibility.

For most entrepreneurs managing marketing on their own might be challenging at first, but it is one of the basic requirements to survive and thrive in a competitive business environment.

#10. Lack of focus & Passion

Lack of Focus Mistake

In order to be a successful entrepreneur, you will be required to put in at least 60 hours/ week with almost zero returns to help your startup business take off. True, it requires total commitment. If you do not have the passion to solve customer issues and improve their lives with innovative solutions, your startup will definitely suffer.

A startup business is full of challenges and to overcome these, you will be required to put in a lot of hard work which won’t be possible unless you sincerely believe in what you offer. Give direction to your startup business by focussing on areas that you actually care for.

Also, you may find several other people who share the same passion as you in the same domain. Best would be to join hands with likeminded people to take your business to the next level.


We all make decisions both good and bad every second each passing day. Well, a startup is no different. Entrepreneurs have to continuously make decisions and these choices have their own consequence in the form of success or failure.

If you are an entrepreneur, it is obvious to be scared of potential startup failure. Especially, with the failure rate soaring as high as 90%. That said, you can certainly avoid being a part of the doomed club and write your success story by learning from the above-mentioned mistakes.

About the Author!

Nathan Smith is associated with a reputed Technoscore Mobile App Development Company. In his free time, he writes insightful content for wannabe entrepreneurs. He has a rich knowledge of entrepreneurship.

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