Dodge these potholes if you are business startup

First time entrepreneurs (like me) are always so passionate about their ideas that they forget or can’t see the obvious. For all the first timers and as a reminder to self, here is a compilation of some of the mistakes that I have made in the last two years or learnt from interacting with fellow entrepreneurs.

Not focusing on one thing at a time:  If it’s a product, resist the urge to build lots of features and focus on the ones that will actually take the product to market. If its services, make a list of all the services you can offer in decreasing order of competency level. Knock off the long tail immediately.

Remember: Ideas are thrilling. Opportunities are tantalizing. Dreams are exciting. Yet, execution is everything.  If you keep getting distracted by the latest trends your best ideas will get ignored.

Spending too much time managing operations: While it is hard to build a great company without a great product/ops team, entrepreneurs who spend too much time being involved in operational hassles lose a lot of business to the ones with a stronger sales team. If you are not focused on sales and business strategy, you’re likely to burn yourself out and run out of money before you can be called anything but successful.

Too much dependency on select clients: Sometimes the Pareto Principle can play havoc in the growing stages of a startup. Imagine two or three clients yielding 70% of the revenue and one fine day, one or worse still, two of them decide to either slow down or to stop engaging you with new work. Suddenly, there is sharp decline in revenues. It becomes difficult to manage expenses and in extreme cases you may have resources sitting idle until the time you find a replacement client. This can be killing and mentally taxing for the founders. As they say in the financial markets, one should always hedge out such risks.  

Hiring the wrong people: Nothing can be as bad as this for as startup. More than the experienced guys, startups should try to look for people who are passionate about what they do and want to make a mark early in their careers. Hiring people who do not understand the startup culture will not only just bring your company morale down but will also make a direct negative impact on the others who actually deliver stuff.

Too much advice:  It’s always advisable to get inputs from experts, especially experienced entrepreneurs who’ve built successful companies in your domain. But IMHO seeking too much advice can really screw up your head. This article from Forbes sums it up for me. Remember, it is your idea that makes you different from the others. On the contrary, too little advice or feedback can screw you up equally.

Not delegating enough work: Make sure you delegate enough work to people who will sweat it out for you. Believe in your employees, because if you don’t believe in their abilities then no one ever will. Take breaks at regular intervals to avoid being burnt out and don’t spend too much time working on trivial tasks. Avoid emergencies that delay attention to high priority and high impact tasks.

Not charging what you’re worth: Don’t be afraid to charge what you think you’re worth. To start with, this technique takes guts but sooner or later you will realize underpricing your product or service leads you nowhere but dissatisfied and disappointed. It is ok to charge not only for your work, but for the client experience around the work you deliver.

Not having an established client intake process: This one takes the cake for me. Being in the services domain, I distinctly remember having worked with a few clients who wanted to avail some of the services we offered. What actually we got in return was:

1. No clear roadmap to bring a particular task to completion
2. Promises to build the next big thing collectively, but not payments
3. The need for a face-to-face meeting for something as trivial as sharing content for a digital creative
4. Mindless people who would not value our time

Believe me on personal experience here; having an established client intake process can go a long way in delivering your projects successfully on time without any hassles.

Over commitment on the timelines: I’m quoting a few lines from an article I read on INC written by Jeff Haden who I closely follow on twitter.  “Nothing ever goes as quickly as you predict; in a start-up, time passes in reverse dog years. Create timelines but always factor in scenarios and sensitivities. “

If you are in services, you need to have concrete plans, you need to stick to timelines and most importantly deliver on your commitments. Think twice before committing timelines to your clients.

Abdicating authority: At the onset of a business, there seems little reason to induce middle management or worry over management procedures. Usual problems can be handled by using common sense and trial-and-error in the early stages.

But being the top authority one should strongly consider that it is up to you to set the right expectations from the juniors else it will start hurting job performance. If you need to reprimand or in extreme scenario fire an employee, go ahead, just do it and don’t look back. Remember, you’re the one in charge and your goal is to not let the business suffer, come what may.

Playing the blame game: When you are onto something new, failure is bound to happen. Failure isn’t about not being accountable.  It’s about being highly accountable, owning up, and taking responsibility for understanding project mishaps. Seriously analyze what led to the failures you experienced. 

• Deliberate Deviation/ Inattention: This could be the worst scenario that could plague a startup business and can mar your business reputation immensely. Take immediate action as there is no excuse for this.
• Incompetence: Try to find if appointing a person can solve this issue. Plug off the cord if you feel you aren’t competent enough to service your client. Bad reputation can undo a lot of good work done previously.
• Process Inadequacy: As you grow, start emphasizing the need to define processes to function smoothly as a coherent unit.
• The Difficulty of the Task/The Complexity of the Process: Assign complex or difficult tasks to someone who is competent to handle them or own them yourself.

Remember to approach the problem strategically, and take responsibility. Don’t attack others as more often than not the other person will put up defensive walls, justify his/her actions and point out flaws in your behavior. Feelings get hurt, tempers flare and the issue itself rarely gets resolved or even discussed in a constructive manner.

Most importantly, be prepared to say “I’m sorry”. It defuses anger and builds trust.

Not focusing on client relationships: Once a project is live or a product has been sold, the founders or key management people might not need to interact directly with the end user or the decision maker.  This often leads to missing out on upcoming opportunities, and most importantly first hand feedback on the product or service. Always try to take out time for your clients (even a random call or a small personalized email can do wonders). If you find something going wrong, be ready to accept mistakes or discuss it out politely, and don’t argue with clients.

Understanding what your clients expect out of you can eventually help you establish a strong and long term rewarding relationship with them. In the process, always explore cross selling possibilities but beware not to oversell yourself.

Being emotional in decision making: Being emotionally involved with a project or a client can sometimes shelve your attention from crucial things that might require your time. As humans, we all tend to take a stand, even before our brain has had a chance to weigh out the pros and cons of the matter. It’s best to let the matter play out in your head before you decide what you are going to do about it. Emotional decisions can stunt business growth.

Making commitments in unchartered territory: How often as startup guys, we are tempted to work in unexplored areas and trying out things for which we don’t have the skill set. Sometimes in a spurt, we make commitments to work in unexplored areas. While it’s a good thing to explore new stuff but make sure you do a small trial to establish viability beforehand.

Not paying attention to the legal paperwork:  Legal documents, contract documents, NDAs, etc. should be thoroughly reviewed and altered to suit the needs of the project and the parties involved. Too often, contracts and contract terms are prescribed by one party, with little input from other party. This should be a collaborative effort, with the best interests of the project in mind. Two projects are rarely alike, and the contracts governing those projects should not be either. As an example: one should be prompt enough to check whether the NDA/non-compete has a time period listed before signing to indicate that you are only agreeing to the contract for the limited period (I have made this mistake once already).

Early Expansion: Define processes while not making them over complicated, don’t venture into mindless opportunities, and most importantly avoid throwing money at everything while you are expanding else you could be on course to die a tragic death during the perilous transitional growth phase.

I think the article 5 Traps to Avoid When Growing Your Business sums up this topic beautifully.

In Conclusion: As an entrepreneur, I have made many of the aforementioned mistakes, but none has deterred me to take the next step forward. I have always tried to make a conscious effort to calculate the risks and rewards before taking business decisions and luckily my partners, family and friends have always stood by me. Starting a business can be one of the hardest things one can do because of the precariousness, the lack of a support structure and a total disregard of the typical safety zone we are so used to. But the rewards are far greater than the sacrifices. And in the end, once you have made your mark (big or small), it will be more gratifying than you could have ever dreamt.

About the Author

Lakshdeep Rajput is a co-founder at Green Apple Solutions, a Delhi based Social Media Marketing and technology firm with over 75 clients across the globe. He manages a team of 25 young and energetic people and has been living his entrepreneurial dream day in and day out for over two years now.

 Image sources:

1. https://because-ofallah.blogspot.in/2011_05_01_archive.html
2. https://thorntoncenter.net/time-management-workshop
3. https://ericksmart.hubpages.com/hub/Keys-in-Protecting-your-Business
4. https://78notes.blogspot.in/2009/09/advice-position.html
5. https://www.chipndaleonline.com/shorts/peanuts.html
6. https://smashinghub.com/10-warning-signs-of-bad-client-types.htm
7. https://theonlinecitizen.com/2012/03/performance-bonus-breeds-the-culture-of-avoiding-responsibility/
8. https://www.cartoonstock.com/directory/h/henpecking.asp
9. https://www.graphicmania.net/how-to-build-a-good-working-client-relationship/
10. https://www.leofrincu.com/blog/rational-emotional/
11. https://www.divorce.com/article/divorce-forms