5 Mistakes That Can Kill Even the Most Promising Startups

Spread the love

What are some lies startup founders tell themselves? originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Terrence Yang, Silicon Valley angel investor and failed startup founder, onQuora:

Many founders lie to themselves about how great they are. They are overconfident and lack self-awareness. Their rate of learning and real progress is poor.

Lack of Paranoia and Key Risk Reduction.

Founders run on faith, meaning they believe things that rational and realistic people don’t, such as: “I will colonize Mars.” –Elon Musk

You have to believe in your startup and convince others to as well. But you also have to be paranoid and reduce key risks when and where practicable. Many founders lie to themselves about both.

Confusing a Rent-A-CTO for a Real CTO.

LA startup founders who never programmed do this a lot. The dev shop will “invest” in your startup by charging you less cash in return for a convertible note or SAFE. They will also “fill out your team” by being a “CTO”.

Sorry, but that’s not a real team.

It’s a project you should finance yourself by working 2 jobs, driving for Lyft, etc. Then, if your hired gun dev shop actually built something worthwhile (such as a great prototype users seems to love), you can go find a real CTO who only works on your startup. Not 300 other startups like the dev shop – 2 to 200 of which are exact clones of yours. Dev shops copy and paste the same code you paid $9,750 for and charge your direct competitors 50% to 80% less to win bids.

Counting as “real work” anything unrelated to finding and meeting an unmet customer need big enough to warrant a startup.

It’s okay to occasionally not do real work, such as write blogs, do PR, speak at events, mentor, network. As humans wee are all emotional, not robotic A/B testing execution machines (which is why we will be replaced in some areas). But don’t confuse any of that with the real work of transforming your pre-business startup into a real business. And don’t confuse a great business with a commodity business where your product and service are fungible with your competitors.

Believing in making something people love or want without meeting an unmet need. If you “make something people love” via heavy, unsustainable subsidies, then you are like Kozmo, UrbanFetch and the 2015 on-demand delivery startups that delivered things to people for free or at an artificially low price. This can work if self-driving sidewalk delivery robots and cars can get there in time. Or if you achieve pricing power.

Telling yourself you should use growth hackers before meeting an unmet need. If you reach product-market fit (no small feat), you may be meeting a customer need. But that does not mean you are meeting an unmet customer need. Others may be meeting the same need. Many of us “need” to connect with others. That doesn’t mean we all “need” Snapchat, for example. Especially when Facebook offers the same features like Stories, etc. Facebook copied Snapchat a fourth time, and now all its apps look the same. Snapchat might be a smaller business limited to tweens and teens.

This question originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google+. More questions:

  • Startup Founders and Entrepreneurs: How do I get taken seriously as a young founder?
  • Snapchat: What are the most surprising things in Snap’s S-1?
  • Marketing: What are the main marketing challenges for a startup founder?