The entrepreneurial life is fraught with perils and multipreneur, Dev Garg, who has both started and mentored many companies, has a first-class seat to everything that’s going on.
Dev Garg is the founder and CEO of EdHero, the first online platform in the world dedicated toward empowering teachers by exposing them to clients and educational organizations all over the world and giving them the tools and resources required to build a dynamic portfolio, and make some extra income.
He is also behind EasyAnalytic, a principal software development firm that helps tech companies launch their products with roaring success, and Bootstarting, a program that aims to teach people how to build and launch successful startups.
Dev recently sat down with us to share what he learned mentoring more than hundred companies and the pitfalls startups need to avoid if they plan to survive the intense grind of the business world.
Here are some mistakes that he thinks startups should avoid:
1 – Shiny Object Syndrome and building too much
SOS, in simple terms, means jumping on every shiny opportunity you see as a viable way of making money. Creating an organization from scratch is perilous. There are far too many factors at work and with SOS you only end up working more making less.
Before getting excited about any opportunity, as a potential founder, you should ask yourself- Do you really understand the problem you are trying to solve? If so, how well? How well do you know and understand the customers? Has your career experience prepared you for the role you’re about to take? Do you understand the market? What strategic relationships you have or could build in the industry? What is your potential business model? Can you commit your next 3-5 years doing this even if you make no money?
And most importantly, other than potentially making money WHY do you want to do it?
After finding the right opportunity, another mistake startups make is building every possible thought out feature in their first product. For example – Instead of building a small neighbourhood followed by the city, they first build the city and then hope people would like what they have built. What if your target customers wanted just a neighbourhood or maybe a small town or a community of senior citizens? Permutations and combinations are endless and so how do you solve this?
The solution is to start by launching a minimal viable product as soon as you can. An MVP is a basic version of your product with a core differentiated feature solving a very specific customer problem. It allows you to measure the users response and test the market out before heavily investing time, money and effort. If the feedback is positive, you can go ahead with adding more bells and whistles and making an awesome product, if it’s not, you either don’t have to waste your time and money on a product the market will eventually reject or you will be perfectly poised to pivot to a product concept that your customers would actually use.
Bottom Line – Avoid the shiny object syndrome and always think big but start small.
2 – Choosing the Wrong Set of Investors
Investors bring two benefits with them. First, the financial capital makes sure your startup doesn’t crumble due to lack of funds, and second, the right investors bring much more than money to the table. They know the risks involved in starting, growing and sustaining businesses.
Many founders underestimate the worth of a good investor. They give higher priority to money and join bands with anyone ready to dole out the cash. This leads to differences, wrong decisions and, inevitably, the investor backs out or shows zero support during crucial moments.
Put a right valuation to your startup and know if your investors understand what your startup is all about and whether they bring something of value to the project. A right investor would believe in your vision, your team and will support you with their experience. A wrong one would want to take over your company, unless you are at the later stages where the game is a little different.
Another important point to keep in mind is that it’s important to build a company with customers as the central point, and not just one that satisfies investors. It’s the customers that will eventually lead to revenue generation. Right investors understand the importance of a customer-centric company, and these are the ones you need backing you up.
3 – Not Building The Right Team
Your idea is only as good as your team’s execution of it. Hiring makes or breaks a business. And yet, many entrepreneurs don’t put in the effort and dedication it requires to build the right team.
Hiring people with the wrong credentials; compromising on hiring quality due to budget restraints; hiring employees that don’t fit the company culture. All of these mistakes end up making the company suffer.
Don’t rush the team building process. Make sure you’re selecting the right candidate, and if you’re hiring for lower positions, put a probation period in place before going for a more permanent contract.
Special attention should be put into choosing the right co-founder, instead of just going with someone you met online or at a meetup event.
4 – Not Listening to Customer Feedback
Your customers define your possibilities, your success and your expansion. Disappoint them and you’ve effectively slit your own throat.
Here are two fatal mistakes most startups make. Numero uno, they don’t establish good feedback loops. This means they either don’t have proper channels to collect and analyze data that can help them understand their own industry or customer base, or they don’t innovate enough to keep up with the rapidly changing needs and demands of the market they’re in.
Reason number two? They don’t establish a personal connection with their customers. In a world saturated with brands and products, why should people choose you? What is your story? What makes you stand out? Do you go out of your way to make them comfortable? Are they at the front and center of every decision you make?
Meet and exceed the need of your customers and in return they’ll give you both their money and loyalty.
5 – Giving up too early
An idea strikes you and you’re ready to live the American dream. You assemble your team, register your company, and then you’re off into the world. The first few months are exceptional. You’re bringing in revenue, investors, and customers. Word is spreading, the valuation is skyrocketing and you’re hitting every goal projection.
Then comes the slump. And your startup starts to crumble.
The business world is a parabola. Which means no matter how fast you’re growing, you will hit a low. Things are bound to get tough. Either in the start, or later. You can either shut shop or you can continue working hard, hustling, innovating, and making necessary changes or cuts to keep up with the market.
Living the entrepreneurial dream isn’t easy. The endless nights, the hard-work, the constant disappointment at times, the financial losses and let’s not forget the stress that takes a toll on you. But, if you truly believe in the future you’re building, one day the rest of the world will too.