Over the several years I have been an entrepreneur and have coached entrepreneurs, I’ve noticed quite a few common mistakes people early in their entrepreneurship career make. This list is not meant to make people feel bad about themselves for making them, as I’ve made every mistake on this list! Have you made these mistakes and where have they shown up in your journey? What have you learned? Are you still making these mistakes, and if so, what do you need to do to adjust? I challenge you to reflect on each mistake below:
- Not talking to customers. The number 1 mistake early entrepreneurs make is not talking to customers early and often! CBInsights published a report showing that 8 of the top 12 reasons startups fail is poor product-market fit, aka making something that nobody wants. A founder should do their due diligence: understand the different roles in the ecosystem of who all is involved in decision-making, use, and purchasing, what each role’s need/priority is, and how intense or frequent is that need. Is a customer currently compelled to seek out and pay money for a new solution? As founders talk to customers, they begin to put the problem and the customer at the center of everything they do. They build a solution tailored to that customer segment’s problem.
- Talking about your idea to customers. This may seem contrary to the first mistake, but let’s do a quick exercise. Picture your dream car. Mine is a Nissan NSX. If I asked you if you wanted that car, what would you say? Do you have your answer? Now, would you, tomorrow, realistically go out and buy that car? My bet is that more than 99% of you would say no. By mentioning your solution to the customer, you are biasing their response and giving yourself a false positive result from your customer discovery. This false positive can absolutely destroy well-intentioned people. Again, the number one reason startups fail is that they make something that nobody wants. It is best to first understand your customer’s main pain points, their top priorities, and how motivated they are to solve that problem. A great illustration to understand purchasing decisions is the Fogg Behavioral Model, which shows that a customer must have enough motivation and ability to make a purchase. Talking about your idea will give an early entrepreneur a false sense of how motivated the customer is and may land the entrepreneur in a detrimental position with no actual customers. Instead, ask what their biggest challenges and top priorities are. If your idea does not solve those, then you may need to reassess that customer segment or idea.
- Asking customers to project into the future. This mistake is similar to number three. Humans are notoriously terrible at predicting the future, so asking a customer if they “would” use something or what they “would” want is not a reliable way of assessing customer need. The best way to predict future decisions is to understand previous behavior and catalogue patterns. So replace “would” with something in the past tense. What “did” they use to solve that problem? Why “did” they choose to do that and how effective “was” that solution? It’s very often a customer spends no money to solve the problem, which is not a great sign for an entrepreneur trying to sell a solution. By asking about the past, an entrepreneur will get a much more realistic understanding of customer behaviors and purchasing decisions.
- Not operating with speed or iterating quickly. Speed is probably the most well-known quality an entrepreneur should have. A mentor of mine told me “if you operate with speed, money will come.” Most of an entrepreneur's success comes from how well they can execute on their idea, not on how good the idea is. I see people worry all the time about someone taking their idea, but very few ideas are actually unique. People have thoughts all of the time. It’s the people that execute on those ideas that are successful, and that successful execution is dependent on how quickly they can iterate.
- Iterating without direction. I’ve seen a lot of entrepreneurs be told to “move fast and break things,” but I think this gets confused with “be a bull in a china shop” with no direction and breaking everything around them. Learning how to generate a hypothesis and subsequent action plan to test that hypothesis is an incredibly important skill to hone for an entrepreneur. A master entrepreneur can break down large concepts into step-wise hypotheses as to why this problem exists and then can test those hypotheses very quickly with few resources. If it's a question about the market need, they can identify specific roles within the ecosystem, ask pointed questions, reflect, and generate a plan to move forward. If it’s a question of product need, they can build a wireframe/prototype quickly and inexpensively, get feedback from the right people, and change it. I’ve often seen people manufacture 300 units of a product before getting feedback, or build an entire marketing and sales strategy after only talking to one ecosystem stakeholder. While moving quickly is a huge asset, executing with no evidence will break your bank and your resolve.
- Not asking for help and not talking to mentors. No one can do everything alone. Entrepreneurs are working to solve a problem bigger than themselves, and in order to accomplish that, they must cultivate a team and community that is bigger than the sum of its parts. I can’t tell you how many times I’ve been stuck racking my brain trying to work through a problem, just for a mentor to easily suggest a path forward that I hadn’t thought of. It is so hard to see the forest from the trees sometimes, and mentors can provide invaluable perspective. Every great entrepreneur gets feedback from mentors frequently. Finding mentors can seem daunting, but everyone has more expertise in something than you. Great entrepreneurs immerse themselves in ecosystems and attend events where someone with the right expertise frequents.
- Not understanding relational equity. Relational equity is an understanding and connection between people through time and shared experiences. Although everybody has unique skills and talents that can aid an entrepreneur on their journey, people are not tools for entrepreneurs to use. A relationship is something to nurture and grow, offering kindness, support, and assistance. Relational equity is the emphasis that a relationship is a two-way street. No one is entitled to anyone’s help or assistance. I also like to think of relational equity as putting good karma out into the world: asking “how can I help you?” with no expectation of the favor being returned. Creating a meaningful relationship will provide great dividends in the future.
This is by no means an exhaustive list of mistakes, as entrepreneurs make mistakes all the time! It’s a huge part of the job. Don’t get me wrong, making mistakes is uncomfortable! Be ok with being uncomfortable. Good entrepreneurs are experienced at admitting mistakes and learning from them. If you think I’ve made a mistake by including or excluding something from this list, reach out and let me know!