We often read or speak to founders that are going through the struggles of the startup life. These include slowing sales, hiring difficulties and the final shuttering of the office doors as their startup becomes a statistic.
Had there been better guidance or better advice throughout, some of these issues might have been avoided easily.
Here are five mistakes that many founders make and we’ve even asked a few entrepreneurs to share their thoughts about these topics.
Management isn’t leadership
Management is actually fundamentally different from leadership. Great leaders can be bad managers, and great managers can have almost no leadership qualities.
According to a 2013 Harvard Business Review article, management is described as “a set of well-known processes, like planning, budgeting, structuring jobs, staffing jobs, measuring performance and problem-solving, which help an organization to predictably do what it knows how to do well.”
Leadership is not as measurable nor as easy to put into buckets but is often the driving force behind company expansion, your vision and mission, and ability to inspire through words and actions.
Waiting too long for funding
Once you’ve secured a pre-seed or seed round of funding you’ll have much to prove. Many founders sit back and breathe freely when the first round comes in; there can be a false security at this phase. I’ve seen many (if not most) go out and rent expensive, stylish loft spaces and invest in fancier technology than necessary. Most often, they end up moving back to their dining room table within a year.
Venture Capital firms that invest in later stage funding are more risk averse than your early stage or pre-revenue investors. It usually takes much longer to attract them and to get through the process. This is a pivotal point for startups so have your action plan for next round funding in place and ready to execute earlier on than you may have intended. Give yourself a bare minimum of six months so you don’t run out of money.
Getting PR too quickly
According to Terng Shing from SYNC PR, this is quite a common problem for startups that aren’t ready yet. Before the company is prepared, they look for ‘a quick and easy fix’ to solve issues around brand recognition and lead generation.
According to Terng, this severely limits your chance for success and those that do run successful PR campaigns aren’t ready for the opportunities that it creates. This can mean lost revenue opportunities and damage to your brand name.
In short, it is often better to run before you walk.
Read what entrepreneurs think about expanding their businesses.
Slow hiring
This is an issue with practically every business owner who comes my way. The extremely limiting belief that you cannot afford to hire will delay or prevent your company’s growth
At Tech Collective, we used to be a group of wannabe writers with little or no support staff. We struggled to get articles out on time and we were pulled in different directions by our full-time jobs and side ventures. Once we hired an editor (she’s patting herself on the back right now) and started hiring proper writers, we were able to stabilise the publication and improve quality and reach.
Not being able to let go
CEOs or Founders need to be able to start and build a company, but often the company outgrows them for a number of reasons. These include becoming too large for a single person to run a company properly or inexperience in bringing the company to the next level.
While many early-stage founders can succeed in growing with their companies, it’s important to recognize if this is a trait you have as a founder. While stepping down is never easy, it can be crucial to helping your company reach the next level.
Stubbornness
This is something we have in spades but was also a detriment to our growth.
Having grand plans is great and often forms the important blueprint that is needed for every company. However, being able to change and adapt to changes is essential for startups. This is the edge you have over larger and more established companies.
An inflexible company led by a stubborn CEO can make a company stagnant and halt growth during important stages of a company’s lifecycle.
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