CEO Confidential

11 Startup Mistakes Every Entrepreneur Makes and How to Avoid Them

Being an entrepreneur is always associated with making mistakes. But if you learn from those mistakes, you can go forward and attain success in life. According to a study by Forbes, 90% of the startups fail. No matter how blunt it may look, this is the reality of an ever changing business world. The reasons for this can be many, ultimately leading to failure.

The major and most common mistakes that are made by startups are:

1. Hiring the Wrong People 

Hiring wrong employees for a startup can have devastating effects on the well being of any startup. To be able to find a perfect team at the beginning of a startup in very essential. Hiring the right employees is as important as funding for a startup.

You need to hire the person with the right skills rather than settling for a person who claims to be a good learner and does not have the desired skill set required for the job.

It is also important to hire the person with the right work experience. It is not the number of years that matter. What matters are the accomplishments that the person has achieved during their work tenure.

Another important hiring tip that needs to be kept in mind is to hire highly competitive staff. Startups are already struggling to build its name in the already competitive industry. Hiring the employees without the flare to work in a stressful environment is not an apt choice for any startup.

2. Unable to Find The Right Partner

Taking the startup single handedly and not being able to find the right partner(s) can have unexpected effects on the company. There are certain things that need to be considered while looking for a partner.

Fill out the gaps in your skills and find your partner accordingly. You need to analyze where you lack in the skills that are needed for your startup and find a person who can pitch in for your shortcomings.

Once you have found the right person(s) you need to make sure that you have good compatibility with the person. It is as important to be compatible with each other as being the right partner. You certainly don’t want to spend the new few years working with a person you can’t bear.

3. Inefficient Delegation of Work

Delegation of work is a tough job and needs to be done carefully. Every person can do certain jobs better than others and it is up to an entrepreneur to find the right person for a job and assign the work. Being unable to do that can result in you being busy and unable to focus on other things that need attention.

To deal with this problem, first you need to find the right person with the right skills for the job. Once the task is being assigned, you need to explain what the task is all about and what your expectations are. It is important to be available all the time is the person needs some clarifications and hold regular meetings to track the status of the task assigned.

4. Losing the Feeling “Customer Comes First”

“Customer First” is something that many startups ignore in the beginning which costs them badly in the future. To overcome this you need to give your customer the sense of feeling that giving you a chance of service was a right decision.

Good customer service gives you many advantages

  • Product development
  • Growth of the company
  • Valuable feedbacks
  • Leads for future

5. Arrogant Nature of the Company and Staff

Quick success for startups sometimes brings arrogance in the attitude of people. They start believing that they are the best. This is where the problem crops up.

The only way to deal with arrogance is to remain grounded no matter how much success you get. You should always do what is ethical and work for the society and strive to make it better with whatever you can give.

6. Overspending

As most startups have a very limited budget, and many times end up overspending trying to get the work done or hiring the right persons. Overspending can result in the company to make layoffs and ultimately shut down its business.

There are various ways with which you can save money:

  • Use free software where you can
  • Companies should limit number of hierarchies for managers and keep it to a minimum
  • Running business from home can save a lot of lease money
  • Advertise you company using in-house ads rather than hiring professionals

7. Poor Investment Strategies

One of the most critical things for a start-up is to manage the limited amount of money they have and spend it using careful strategies. Many startups fail because they are unable to invest it in the right place and at the right time.

In order to manage the money efficiently, some steps need to be taken to keep the money flowing into the company from the investors and investing it further.

  • Strong and well researched business plan to present to the investors
  • Talks with the financial groups well in advance
  • Introduce venture capital
  • Invest the money carefully into well studied investment options with good track record

8. Business Model

An under researched business model can have devastating effects on the future of a startup. Along with the business plan, the implementation of the business model also affects the future of the business. Model requires an overview of the essence of starting the business.
In order to be successful.

You need to choose your model carefully. It should be based on an underlying idea and made out of a vague thought. You need to have a plan to execute it and all the sources you need for your model to turn into a reality.

9. Unable to Launch at the Right Time

You launch your product too early and the target audience does not pay heed to your product. If you launch too late, other competitors take up most of the market share and nothing is left for you.

To overcome this problem, you need to do proper research about the market of the product/services you are launching. Time when the product is launched also plays an important role its success.

10. No Predefined User in Mind

Many startups end up being in trouble because of not being able to reach the right user.  Even the best marketing and promotional campaigns fail to show results if the target user is not defined.

To overcome this, product and its user based research needs to be done.

  • Who will be the user?
  • Their likes and dislikes
  • Preferences

11. Sacrificing Customer Needs for Increased Profits

One of the biggest mistakes a startup can make is to feed on the quality of products and services to make money. Time in the beginning is to make a good consumer base rather than earning profits.

You should always focus on making the customer happy by providing efficient and cost effective products/services.


You always learn while making mistakes. Startups with good business ideas have a great potential to grow beyond their expectations. It is important to keep the above things in mind while you go forward. This will help you run a successful startup.

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Shane Barker
Shane Barker is a digital marketing consultant that specializes in sales funnels, targeted traffic and website conversions. He has consulted with Fortune 500 companies, influencers with digital products, and a number of A-List celebrities.
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