Starting your own business is a formidable task. The risk of failure is always present, and there are a lot of things that can derail your business plan. Start-up blogger Steve Blank compiled a list of the nine deadliest sins that can kill start-ups, based on a series that originally apeared in Inc. magazine. We’ve highlighted five of the most important “sins” below and offered some commentary on each of them. You may notice a theme that runs through the sins, which we’ll revisit at the end of this post.
Without further ado, here are the most important of the deadly sins:
1. Making assumptions about the customer
At best, the idea of who a start-ups customer is, what they want and how to best market it to them is an educated guess. The very nature of a start-up is uncertain, so it’s important to find out how accurate those hypotheses were and adjust them accordingly as quickly as possible. If you’re considering launching a start-up, you need to put any assumptions you may have aside.
2. Overemphasizing the importance of a launch date
Without a doubt, the launch date is an important event for any start-up. But when a launch date comes and goes, there’s even more work to be done. This is a critical stage for start-ups because they need to quickly identify what’s working and what’s not, and then make adjustments to their business plans on the fly.
3. Pigeon-holing employees into roles that don’t meet your needs
Too often, start-up owners make the mistake of hiring folks for positions with job titles that are based on traditional norms from established companies. The truth is, start-ups can never really be sure of the exact roles employees will play until well after the initial hiring process, when the needs of customers and the means by which to reach them have been properly identified. Instead of pigeon-holing during the hiring process, look for people who are comfortable with a changing environment and who are able to adjust on the go.
4. Scaling without room for error
Eventually, your start-up will experience some degree of success. But this doesn’t necessarily mean you should immediately begin the scaling process by hiring and expanding, even though there will certainly be internal and external pressure to do so. By waiting for feedback and allowing for normal growing pains, you’ll be able to determine whether or not your start-up’s success is sustainable enough to start scaling.
5. Panicking at the first sign of trouble
Your start-up will undoubtedly have problems meeting goals and staying on track with the business plan, but its important to remain level-headed during troubling times. Firing and making rash decisions based a few bad weeks often only makes things worse. Instead, focus on making tweaks to processes and plans until you find the mix that allows you to scale.
The theme we referred to earlier, of course, is being open to change by always listening for feedback and adjusting accordingly. This may be the most important takeaway here, because being too resistant or reactionary often leads start-ups to failure.
What other advice do you have for start-up owners? What philosophical problems have you encountered among small businesses?
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