What are the 3 biggest mistakes of new entrepreneurs?

I see matched sets of errors by new entrepreneurs:

1. Spending money before it is absolutely necessary--esp. on overhead.
OR Failing to go all in, not spending as much as you need when the window of opportunity opens wide.

2. Plunging ahead too quickly before you are ready. Going to market with beta.
OR Hesitating, waiting too long, so that others pass you by. Striving for perfection instead of good enough.
OR Beating a dead horse. Sticking with something long after you should have written it off and moved on.

3. Being the Lone Ranger. Taking too much on yourself, thinking you're the smartest, you know all the answers.
OR Being indecisive. Listening to too many voices and viewpoints, trying to satisfy everybody.

4. Micromanager. Hire good people but always look over their shoulder, telling them how to do their job.
OR Laissez faire. Hire good people then turn them loose, giving too little guidance and feedback.
OR Switch back and forth between these two. That REALLY drives your people crazy!

Answered 6 months ago, Edited 6 months ago by Mike Van Horn

1). Lack of real product knowledge. Just because an app is practical does not mean there is a market for it.
2). Lack of real marketing knowledge. Just because an app may be a better mousetrap does not guarantee there is a market for it.
3). Lack of a realistic revenue model. Just because an app is popular does not guarantee profitability.

Answered 6 months ago by Steve Meyer

1) Starting out underfunded.
2) Believing they can handle product/service design and delivery, marketing, and financial management equally well and on their own.
3) Being unable to demonstrate that the business has the potential to be both profitable and sustainable.

Answered 6 months ago by George Bohlender

1: Picking the wrong partner (could be friend or family member)

2: Organizing your tasks to benefit self before the customer or simply not prioritizing. Example = Fully setting up a marketing campaign but not fixing checkout payment issues on the website.

3: Not allowing/having enough time to really make the business grow or get established.

Answered 6 months ago by Brian Bourgerie

#1 reason companies fail: Ignore customers.
#2 Lack of focus.
#3 Lack of execution.

Jason
303 Velocity - http://303velocity.com
Your top notch user experience, mobilized.

Answered 6 months ago by Jason Ryer

1. Feeling they need all the "trappings" before beginning (logo, stationery, LLC, accountant and lawyer, etc)

2. Not being narrowly focused (or, as many of us call it: niched). You canNOT be all things to all people. Thinking that "everyone" can use your service means your message to your market is WAY too fuzzy - go after one, small, narrowly-focused group. Get them and THEN you can expand to the NEXT small, narrowly-focused group.

3. Not staying focused. Success will NOT happen over night. Success is NOT a straight line. Keep "testing" your assumptions, your marketing, your products and services, always listening to what your consumers (or prospects) tell you. But don't listen to EVERYONE - not everyone's opinion is as important as everyone elses (I love my wife: but she's not interested in what I do and certainly isn't an expert - so to listen to her "opinions" will not be helpful to my success)

Keep going! It's the JOURNEY that's important and fun, not just the destination.

Answered 6 months ago, Edited 3 months ago by Charlie Seymour Jr

1) Wanting to make money instead of making a difference. Need a focus on how your service or product will help your customers and as result you will get paid.
2) Listening to advice...take action today.
3) Not spending enough time on marketing and selling.
Best,
Rich

Answered 6 months ago by Rich Grehalva

1. Thinking the idea is more important than the execution.
2. If it doesn't make money, it doesn't make sense.
3. It's easier than having a paycheck job.

Answered 6 months ago by Rob Valerio

From the perspective of an attorney, here are the 3 biggest mistakes:

1) If there is more than one owner involved, failing to have a workable written agreement between the owners;
2) When the time comes to form an entity, choosing the right form and the most efficient tax election; and
3) When technology or other intellectual property is involved, failing to have the appropriate "assignment of inventions" and other agreements in place regarding ownership of IP

Answered 6 months ago by Mark Farha

Insightful comments, everyone!

Here are an entrepreneur's 7 Biggest Elevator Pitch Mistakes: http://www.improvandy.com/elevator-pitch/7-biggest-elevator-pitch-mistakes/

Happy Networking!

Answered 6 months ago by Andrew Winig

1. No tangible goal (not having a clear picture of where they would like to be 5 years from when they start the business)

2. No financial plan
3. No solid USP for the business (If there is nothing different about the business, it might fade away eventually.)

Answered 6 months ago by Sarah Johs

1. Failing to carry out market research prior to and during startup, ie customer profile.competitors, suppliers, client base

2.No business plan. How do you know when you get there if you don't know what you are aiming for?

3. Not having sufficient capital to ensure you can live at a reasonable standard, at least until the business generates enough turnover to be able to pay you a liveable wage (this counld be up to at least 3 years).

For a quick ball park idea of how much turnover you will need to generate for the wage you want X 3, $100,000 per annum X 3 = $300,000.income ( (1/3 for overheads, 1/3 for profit to reinvest in the business and 1/3 for wages and salary)

4. Bonus point - Accountability - nobody is watching you, so who are you accountable to, for producing results?.

Answered 6 months ago by Marion Drazil

I can't help thinking that entrepreneurs are born better than they are made. Have you ever met a pessimistic entrepreneur that was successful?

For me the top three mistakes are:

1. They listen to the advice of a well meaning but inexperienced peer group or advice that is outdated. They need to read, watch and listen broadly, and expand their peer group to include the very best in their chosen vertical.

2. They listen to sales people from organisations that are trusted and well known, that promise the earth, charge the earth and deliver very poor results. They have to be good at saying no to sales people, but good at listening to what they say. By listening, questioning then later verifying the validity of any claims made to me by sales people, I began making much better buying decisions and could much more quickly identify and challenge false or misleading claims made by those wanting to supply or serve me.

3. They become frustrated or bored when immediate or anticipated results fail to materialize. They give up easily. I have thought about how easily I could give up many, many times, but something inside me just knows that giving up is an ingredient, unlikely to help anyone become better.

Answered 6 months ago, Edited 6 months ago by Simon Berenyi

I agree with many of the points that others have highlighted here.

- No branding. How can people follow you if they don't know who you are or what you stand for?
- Lack of focus.
- Spending money on infrastructure and people before knowing what they're selling. (No, you don't have to look like a "real company" in order to move forward.)
- Going it alone, thinking they know everything. You can't know everything and a little coaching/mentoring can go a long way toward success (and being open to that coaching).
- No market testing to see how viable an idea is before building it.

I love Mike's last point. In August I wrapped up a project with just such a person (switches back & forth). He wants me to continue working with him but I'm certainly thinking twice about it. His businesses have such huge potential but this point and his lack of focus will severely limit the growth.

Answered 6 months ago by Paige Burkes

1. Lack of focus
2. Lack of focus
3. Lack of focus

Answered 6 months ago by Mike Buffa

1) No solid business plan.
2) No long-term strategic conceptualization.
3) No mentorship/assistance during the startup phase.

With the right mentor or consultant, you will be better positioned for success with your business. Regardless of how smart or experienced you may think you are, there is valuable information to be gained by having someone else along with you for the ride who will provide you unfiltered feedback from an outside-in perspective.

Answered 6 months ago by Scott Tarlo

I only work with technology oriented B2B companies so my answer applies here.

By far the biggest problem is that people confuse having a product with having a business. In advising young entrepreneurs I see this all too often.

The second biggest thing is not being clear on the most important aspect of your company, and that is, what business problem to you solve. Simply, if you don't solve a business problem you don't have a business, so figure it our or don't even try.

Third, lack of focus. When you start a business you need to focus on one thing and one thing only until you own it and you have a dependable set of customers. I advise an AppExchange add-in to Salesforce.com and they keep coming to me saying "but, we could do this, we could do that, we could get this low hanging fruit." Sorry, it doesn't work. Focus, focus, focus.

If you haven't yet, go read Geoffrey Moore's two classics "Crossing the Chasm" and "Inside the Tornado" When you read these, you'll become familiar with Moore's bowling alley metaphor. It's brilliant.

Answered 2 months ago by Bob Hatcher

I believe that the 3 key mistakes are:

1. insufficient funding
2. incomplete or poor business planning
3. lack of focus/poor execution

Answered 6 months ago by Joseph Bernard

It depends on what stage of launch you find yourself in but typically, early statge companies suffer from a number of maladies;
1) have fallen in love with the idea / product and are inflexible re: development / deployment / market.
2) have incomplete market plan
3) speak with seed investors too early
4) do not surround themselves with smart management / advisors
5) the product is not adequately protected (patent if possible) or barriers to competitive entry are not clearly understood.

Answered 6 months ago by Alex Petrilak

The biggest mistakes that I've seen entrepreneurs make (and made myself) are: #1 Fear #2 Greed #3 Hubris. FEAR that their ideas will be stolen or that they will be taken advantage leads entrepreneurs to kill new ventures before they ever really get started. GREED manifests as 'wanting total control' and 'needing to keep the majority stake' or expecting 'a couple hundred grand in year two'. HUBRIS is the flip side of whatever makes people successful and if not managed it will bring about the downfall of even the most experienced entrepreneur. There are many more reasons but in my opinion these three are the biggest.

Answered 6 months ago by Christian Ludlow Hyland

Good answers, from my multiple startup experiences, here are 5:

1. Inability to adequately answer the top-3 marketing questions
a. What deep, deep need is being addressed
b. Do customers really, really care? Prove it.
c. Will customers pay your prices, again and again…even with competition
2. Not building a great team
a. Does it work hard and well together…on good AND bad days
b. Is it playing off the same game plan, and does it deliver
c. And, is it convinced they too will share in the success
3. Inadequate, up-front market/customer research; walk in their shoes before incurring costs (70%-80% of product cost is locked-in at design)
4. Lack of honest, personal goal setting by founder(s) and investor(s), and not sharing success; read Founder’s Dilemma…HBR
5. Inadequate cash management (not just spending, but also taking in investments)

Colorado Technology Ventures, LLC

Answered 6 months ago by Eben Johnson

- team: bad people in the bus (skills, view, personal strategy)
- underestimate competition: "often we hear: we have no competition"
- underestimate time: "things take time to market and make understandable, any solution"

Answered 6 months ago by Laurent Blondeau

Not making enough mistakes.
Not making them fast enough.
Not learning from each mistake.

Answered 6 months ago by Peter Nguyen

1. Not understanding their target audience
2. slack planing and not working the plan
3. Unclear of what the Business is meant to achieve, the time taken, the exit plan and the personal, financial and charity goals.
4. They don't understand the difference from buy a job or a business. can the business work for you or will you be working for your business!

Answered 6 months ago by Peter Wheaton

First losing focus of the internal innovative brilliant insight to a concern, breakdown or innovative feature in a service/product and by waiting and designing a business planning process, core dedicated team, seed capital and on, on on, its all BS.

Second is thinking too much instead of design build the proto~typing proof of concept immediately. Get your hands, tongue, ears, nostrils, feet and teeth into the creation. Attention is what creates creations. And it is east today due to the technological distributive learning, parts for anything are available, professional expertise is looking for work, and with Wiki Creative Commons its possible to be an entrepreneur with a shoe box and duct tape. Make it work first.

Third the fatal mistake of going it alone for the big return on your precious invention and miss the immediate market opportunity by building alliances and strategic partners who need service or product today. Find the need for you entrepreneurial invention and design a way to fulfill 'a' satisfied customer and your off and running.

Answered 6 months ago by Mushin Mato Wambli

1- Not flexible (not adaptable to changes and challenges)
2- Lack of core value (lack of focus on "why in business")
3- Poor money management (spending more than earning)

Answered 6 months ago by Farzad Wafapoor

Passion to get to the finish line which is also our biggest strength

Answered 6 months ago by Tom Hannon

Lack of a coherent marketing strategy
Spending too much money on tactics like advertising without thinking it through
Lack of a valid value proposition

Answered 6 months ago by Jon Turino

1. Thinking that being skilled at your profession is enough knowledge to run a business.
2. Not dealing with estimated tax payments or using a payroll service

3. Thinking you can do it all yourself

Answered 2 months ago by Ed Kelley

Lack of marketing research with an objective resource, building a management team with friends rather than strong implementers, avoiding self-development.

Answered 4 months ago by Darlene Crane

Simple- no plan, no budget and no support team

Answered 6 months ago by Julie Ashton

I believe three areas that can have a major negative impact on a new entrepreneur's chances of success are:
1. Lack of devotion and determination. Some entrepreneur's are more passionate about and more committed to doing whatever it takes to get to where they want to be. Those who are less devoted will surely struggle.
2. Fear of failure and unwillingness to take major risks. This seems so obvious, but any entrepreneur must fail in order to learn and move forward toward success, and failures don't occur without taking risks.
3. Thinking you can make it on your own. Some entrepreneurs won't seek advice and guidance from other entrepreneurs because of fear that their idea may be "stolen" or because their self-determination is so strong. But any successful entrepreneur will tell you that you must rely on advisors and partners on your journey, and don't be afraid to reach out to others for support.

Answered 6 months ago by Rob Wolfe

1. Going into business with their wives/husbands/partners
2. Believing that the bank likes them, it doesn't give stuff
3. Not looking after your intellectual property, if you have any worthwhile, everyone and his dog will try and steal it from you, especially the suits!

Answered 6 months ago by Mark Hadley

Won't repeat many of the other responses. I'd add:
- Realizing that the Founder / person who starts up the enterprise is not likely the person who can effectively maintain and manage the enterprise once the start-up phase is over. "Entrepreneur", "Manager", and "leader" are frequently not synonymous!

Answered 6 months ago by Sylvia Henderson

wrong initial intention...money making
rely on instinct without confirming it with market research
lack of patience

Answered 6 months ago by Muhammad Nizam Zainuddin

Trying to do everything yourself.
Not having a defined business /marketing plan (if I build it they will come philosophy)
Not delegating /outsourcing content outside of your core competence.

Answered 6 months ago by Andrew Boardman

Their target audience is "everyone".

Answered 6 months ago by Catrina Sharp

There are no real customers for your big idea. There is no real new product/service in your big idea. Or there is no operation to run it with.

Answered 6 months ago by Gert Staal