Common Mistakes Startup Founders Make

We love first-time founders. They’re focused on creating a better future powered by better ideas. They’re ready to start a business, driven with the passion and the grit to enter the arena and battle with the specters of failure and loss.


When they succeed, they often really do change the world—and the bank balances of a lot of people around them. And it’s because we love them that we say, with all due respect: They make a lot of mistakes. And a lot of times, they make the same ones a thousand other first-time founders have made before them.


In our 20+ years’ experience of working with and talking to dozens of other first time founders, we’ve realized that there are a set of things that most of them almost consistently get wrong, or don’t do enough of. Nobody’s got a magic formula for first-time founder success. But founders can de-risk their company’s path forward by avoiding the following mistakes, subsequently increasing their chances of achieving that world-changing vision.


Being Too Tactical


In terms of sheer numbers, there’s always a lot more to do in the day-to-day functioning of a company, as against its long-term vision. However, we have seen most founders having a strong bias for action, leaning towards being tactical. For them, there is always the next quarter to be made, the next person to be hired, and the next feature to be released.


In their hurry to deliver to the first customers, founders may put more focus on delivering a product that is not in line with the medium to long term goals. This affects the long term trajectory of how their product is developed and it may completely change what they set out to do. Hence, it is important that with all the deadlines and pressure to deliver, founders keep focusing on what they set out to do with their product. They should be able to make a case if there are delays and explain to their stakeholders why there are delays and what is necessary to deliver.


Being Overwhelmed with Advice


There’s tonnes of well-meaning advice available to founders —from investors, advisors, friends, employees or customers. It’s available through in-person meetings, on Medium, on LinkedIn, through podcasts, and more. And all of it is very well meaning advice.


So why is that a problem? That is because most advice lacks context. And by context, we don’t mean just fit the counsel with the product the company is building or the market it’s going after. We also mean a match with the motivations of the founder and with what they want to do with their companies.


What compounds this issue is that a lot of startup advice comes from people who hold a lot of authority, and deliver the advice with a lot of effectiveness. That might not sound like a problem, but when you factor in the amount of such advice available and the repetitiveness of it, what’s clear is that it can completely drown first-time founders.


Underestimating the Value of Their Story


As redundant as it might sound, every startup is unique in so many different ways. Starting from founders, their backgrounds and histories, to market insights that led to starting a company and how they raised their first couple of rounds, everything makes for very interesting stories.


Even as a company progresses from being a tiny entity with a few customers to something larger and more significant, every step of the journey presents unique challenges on every front – from landing that difficult customer to that near death experience when there was no cash in the bank. From edge of the seat thrillers to tales about self-discovery, startups are the stuff of stories.


Such stories can elevate a company from just being a business, to almost a living entity that people connect and identify with. But, given the daily affairs of running a company that keep founders busy, this is something very easy to ignore. Another reason behind this getting ignored is founders not appreciating the fact that they have great stories to tell. Whatever the reason, it’s extremely valuable for founders to make sure they find a way to tell these stories for their customers for them to connect with their idea and company on a personal and deeper level.


Not Talking to Customers Directly


There are usually two types of founders; the ones who start their company to solve a problem they themselves have and the ones who start with discovery of the problem from others who have faced it. What is important and common in both of the above is that the founder almost always starts with a very direct experience of the problem. But as companies progress and bring a good number of customers on-board, this starts to change. Both the problem and the solution expand in scope.


In many cases, founders increasingly rely on analytics dashboards, their sales and customer development teams to learn about customer behavior. In this entire process, many of them lose direct contact with their customers. Founders not talking to customers enough can lead to missed opportunities to; improve the product, better tune sales and marketing to address the market, or possibilities to enter new markets and problem spaces. This is because a founder would look for learnings and patterns that would skip someone approaching the conversation from the perspective of a specific function like sales or customer success.


Hiring the Wrong Team


Many times founders have told us about how hiring is the most stressful part of their job. It’s important to hire the right people, but also at the right time. Most first-time entrepreneurs hire the wrong people. They hire their head of sales too quickly and their head of product too late. They also tend to hire key staff with too little experience, being overly impressed by time spent at a successful start-up or tech giant. Two people can work side-by-side at the same company and leave with dramatically different levels of experience depending on their engagement, self-reflection and pattern recognition. It’s important to sort the pile according to company needs, not flashiest resumes.


At Creative Chaos, when we partner with startup founders, we leverage our Team Integration Framework to match the work to the skill set of a team – rather than engage people who ‘fit a profile’ and assign them work. Then we integrate these resources into the company’s workflows, company’s processes, and company’s culture. We take care of the onboarding and management, and we assume financial risk for the success of the engagement.


Avoiding these mistakes as a first-time founder helps ease the stress and challenges that come with building and scaling a startup. When you are aware of these pitfalls and are able to circumvent them, you can identify more opportunities for growth, build strong momentum along the way, and drastically improve your chances of building a successful company.