10 Common Mistakes That Startup and Small Companies Make

Young companies have small margins for error.
Mistakes made early on can sink a company before its gets off the
ground. Below is a list of 10 common mistakes made by young, small
companies. In the list below, I use the generic term “product” to refer
to either a product or a service.

Over the next few posts, I will
expound on these ideas; for now, here is the list :

1. “Drinking Your Own Kool-Aid” –
   Overestimating the Enthusiasm for Your Product/Service – thinking your
   product is more special than your customers perceive.


2. Not Validating
   Market Demand – thinking that your product is a “winner” before
   making sure you get a solid base of people who agree


3. Starting to Work
   with Customers Too Late – only engaging with customers when the
   product is ready for sale.


4. Underestimating the Difficulty in Penetrating the
   Market – not expending enough effort to reach customers and to
   get them to try the product.


5. Overestimating the Product’s Uniqueness –
   related to “drinking your own Kool-Aid” this refers to not taking
   competition into account, where competition can be another product or
   service, or whatever customers are using today.


6. Underestimating
   the Effort Needed to Build the Product – promising to get to
   market before you can actually finish the product.


7. Hiring the Wrong
   Kind of People – hiring “big-company types” who are used to
   having a support staff to help them do their work.


8. Not Focusing
   – being tempted by side projects and spreading yourself too thin to
   focus on developing your company’s main value proposition


9. Not Pricing
   Correctly – under or over-pricing the product may inhibit
   adoption.


10. Not
    Having a Long-term Vision That Scales –having a “one-trick
    pony” that does not lead to future sales

In the
entrepreneurial spirit of “under-promise and over-deliver,” here are two
more mistakes young companies make:

1. Never
   Finishing the Product – the “never time to do it right, but
   there is always time to do it over” syndrome. Constantly redo-ing the
   product but never finishing it.


2. Not Offering Employees Enough Fun –
   sadly, a common quality of many startups – despite what you read in the
   pubs.

Disclaimer – as the veteran of six
startup companies (two that were successfully sold), these are mistakes I
have seen time and again. If you have some additional ideas, feel free
to comment.

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From FastCompany
| BY FC Expert Blogger David
LavendaTue Sep 8, 2009