five common mistakes of startup entrepreneurs, with a beautiful example and presentation notes for...
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Five common mistakes of startup entrepreneurs I see people make every day, and a beautiful example of a European startup from a decade ago that made four of those. For more on the topic, read my blog: http://www.westartup.eu/blog/five-common-mistakes-of-first-time-startup-entrepreneurs/TRANSCRIPT
Our mission: “copyright clearance” ©
Massive market,all to ourselves.
€20,000,000,000
Raised a pile of money:
€ 7,500,000
Image: images of money
Created 23 jobs:CEO6 Sales 9 Developers2 Legal2 Marketing3 Operations
Sold 2 years later for € 300,000.
Mistake 1: We didn’t understand how the industry really works
Image: Jez Arnold
There’s usually a reason why any given industry functions the way it does.
Further, not all “old” industries function poorly.
Before a startup tries to disrupt an industry, it should understand why it functions that way.
That will help to understand if intended disruption is actually going to work, and how much effort, time and cash will be necessary to put it in place.
Mistake 2: We didn’t talk to enough people before starting.
Had we talked to a large enough number of people – including potential end users for the product – we would have figured out that the end users don’t actually buy rights to re-publish the content.
Never mind the legal aspects, never mind the “right thing to do” - they just don’t.
And – in retrospect – nothing we could have done would have changed that.
Mistake 3(one we didn’t make):start underpowered.
Most startups I come across don’t quite understand how much money they would need to really start their business.
As result, they don’t plan to scale fast and scale big.
As result, they can’t make a convincing business case for more cash before seeing investors.
As result, they don’t fight hard enough to build sufficient cash reserves.
As result they crash and burn, out of time to build a solid business.
We crashed and burned for an entirely different reason
Mistake 4:Being married to your idea.
We’re all humans.
It’s a very human trait.
An entrepreneur should know when to pull a plug on an idea… or at least understand the cost of not doing so.
We went for a pivot…
Mistake 5:listening to customers, not hearing what they say.
Here’s what I heard the customers say: “I won’t pay € 2.5 to send vast majority of my important documents. I might pay for a few, but that would be very seldom.”
Here’s what I didn’t hear: “…but I do have a major problem sharing large-size files over the internet in general, not only PDFs”.
This was back in 2003, remember?
Mea culpa!
Somebody else did hear. There are dozens of companies doing that today, and they make money hand-over-fist.
Here’s one example…
30 million registered users.585,000 paid subscribers,$99.99 a year or more.
You can’t be an entrepreneur without a great deal of belief in yourself and your ideas.
Arrogance is a flip side of that belief. Ignore the signs the customers are giving you at your peril…
But hubris is only the second biggest problem of most entrepreneurs.
It’s the problem most starting entrepreneurs share.
It is…
