According to Rich Gorman, there was a time—the earliest days of the dot.com boom, specifically—when it seemed like start-ups could do no wrong. Start a new business and you’re virtually guaranteed to succeed, many thought; indeed, the very term start-up seemed like something of an incantation. Nowadays, seen in the cold light of bleak economic realities, we know that start-ups are by no means bulletproof. With that said, there remain many who are passionate about launching new companies. Who could blame them?
The question, then, is this: how can start-ups ensure that they are on the path to prosperity, as opposed to untimely demise? According to Rich Gorman, one of the best approaches is to consider some of the most common—and dangerous—mistakes that other start-ups make. He lists a few of them in the paragraphs that follow.
Rich Gorman | Mistakes Your Start-Up Might Be Making
According to Gorman, one of the most prevalent errors in the world of start-ups is simply overthinking things. There is an old saying, that the best way to pack a suitcase is to plan for everything you truly need, then remove half of it. The same might be said of launching a start-up. Over-burdening your business with complex business structures and too-numerous product offerings is a bad move. There is plenty of time for the business to grow and evolve. To start, keep things simple, straightforward, and transparent.
Rich Gorman says that this need for simplicity has an implication for launch times—namely, that it is absolutely possible for entrepreneurs to wait too long to launch. Most business owners want to make sure they are fully ramped-up and prepared to handle customers once they open their doors, and that is certainly prudent. With that said, it is unlikely that a product needs a thousand different buttons, settings, features, and incarnations in order for the company to succeed. Again, it is best to launch soon, and to work on product developments and upgrades down the road. The risk businesses run is building way more than they need to; or worse, manufacturing many products before realizing there is a problem that needs to be fixed.
There is another mistake common among start-ups, which is hiring improperly. New hires at a start-up usually end up having more responsibilities—and the need to adapt more quickly—than new hires at established companies. It is crucial for new hires to understand that the company is nimble and still evolving and that, as such, they are likely going to have a lot of work to do.
Another mistake that entrepreneurs make, Rich Gorman says, is guarding their one big idea too closely. There are many innovators who believe that they need to keep their idea a secret or else it will be stolen and they’ll be run out of business. For one thing, though, it is unlikely that any entrepreneur has an idea that has never been thought of before; what’s more, an idea is not a business. Sharing it is not giving away the farm.
In fact, holding ideas too closely can prove detrimental. It is important for entrepreneurs to nurture their ideas and seek creative input on how those ideas can be developed. Holding them in like state secrets is a dreadful idea, and can prove detrimental.
Losing focus is another peril that many entrepreneurs face, Rich Gorman explains. Launching a brand new company brings with it many responsibilities and many obligations, and at times business owners can feel overwhelmed. That feeling of dismay can lead many entrepreneurs to lose sight of the things that matter most: the product and the customer base. It is vital for entrepreneurs to reorient themselves to these basics every single day.
Many of the most common start-up mistakes take the form of baseless assumptions, Rich Gorman notes. For example, some companies assume that their business will go viral, and that if they build it, customers will come. Of course, this is wishful thinking. New companies need to be marketed and promoted. Assuming viral success is a recipe for disaster.
For entrepreneurs, start-up capital is a big concern; getting this capital can prove tricky. A common mistake that Rich Gorman sees is business owners working night and day to get in good with venture capitalists. This is, ironically enough, a little bit counterproductive. The best way to win the investment of a venture capitalist is to network with other entrepreneurs—investees, if you will—and have them set up meetings and introductions. This is the most effective and efficient ways to generate funding.
Another mistake that Gorman mentions has to do with new businesses that try to make everyone happy. When a new business launches, everyone is going to have an opinion about it—employees, partners, friends, customers, and maybe even members of the media. It is a good idea to listen to advice and make adjustments where needed, but getting distracted by feedback is a major hazard.
Rich Gorman lists one final start-up mistake, which is the mistake of jumping to hasty decisions. While some entrepreneurs delay their launch perpetually, others are too hasty to get going, which means they can make major decisions with ill preparation. According to Gorman, employees should not be hired until at least a dozen interviews have taken place, and new products do need to be tested, if not belabored.
The bottom line: Start-up success is never accidental. Rather, it comes as the result of careful strategizing and planning. Gorman recommends that entrepreneurs guard themselves against some of these far-too-common start-up errors.
Rich Gorman is himself a successful entrepreneur, as well as a long-time business consultant and prolific blogger.
A serial entrepreneur, Rich Gorman has successfully launched numerous companies over the years. He is passionate about exploring different business models, and his zeal has led all of his companies to scale huge heights of success. Gorman is also a consultant and a blogger.