You’d think entrepreneurs would learn from the mistakes of people who came before them but that is rarely the case. Startup founders and workers are prone to making the same mistakes other startups made in the past. Most of the mistakes can be remedied by a few weeks of making course corrections but some can totally kill a startup.
If you want to succeed massively in entrepreneurship and rise above your competition, you must limit the number of unforced errors you make. The term ‘unforced error’ originated from tennis. It refers to an error made by a player based entirely on their own slip-up and not because of something the opposing player did.
Here are some of the valuable lessons you can learn from some of the mistakes startups commonly make:
The Value of Information Storage and Backup
Several businesses close shop every year after losing customer data due to an internal mistake or external attack. This is because most businesses don’t take the time to institute good data storage and backup practices. 58% of businesses are not prepared for a data loss. Further, according to the U.S. National Cyber Security Alliance, 60% of all companies that suffer a cyber attack close shop within 6 months.
One of the most negligent mistakes businesses make is not backing up data when they are using third-party software such as online purchasing & procurement management software. You can lose access to third-party’s software data because of something that’s entirely out of your control. Failing to backup the data on servers you have control over is a big error in judgment.
The Value of Choosing the Right Partner
The start-up scene is characterized by young innovative founders with complementary skills who come together to work towards building game-changing ventures. Often, the founders don’t take the time to dig deep into the lives, character, and attitudes of the partners they are bringing on board and this ends up costing them a lot in the long run.
Choosing partners just because they have technical skills that can complement yours is a big mistake. A good business partnership is like a marriage and you need to consider the personality of the partners you bring on board.
The Value of Professional Advice
A lot of startup founders expose themselves to unnecessary risks and expenses because of their failure to seek the right professional counsel when starting their businesses. Every startup founder should consider consulting lawyers, accountants, and insurers when starting their businesses.
Failing to set up things the right way from the word go can cost you a lot in the long run. If you’ve been in business long enough, you already appreciate that something as simple as structuring your company properly can save you millions of dollars when your startup becomes successful. More importantly, issues of control and voting rights can make or break your company.
When hiring professional services, make sure that the professional has adequate experience in your industry, has the requisite licenses to operate their practice, and that there aren’t any criminal or civil suits that have been brought against them because of negligence or failure to meet obligations to a former client(s).
The Folly of Firing Bad Employees Slowly
In a startup environment, the usual advice to ‘hire slow and fire fast’ may not be good advice. A startup, in its need to embrace speed and push products fast into the market while iterating on the fly, will often hire workers fast as they fill the urgent positions needed to sustain the exponential growth of the startup. The folly, however, is that most startups retain unneeded employees long after they’ve become obsolete.
When companies retain bad employees or workers they no longer need, it leads to unnecessary stress on both their financial and human resources. It does not make any sense to keep an unproductive employee when their being around affects the productive employees negatively. That said, businesses should always dismiss workers humanely and take the needs of the fired workers into account.
The Folly of Quitting Too Early
There are instances when the only right thing to do is to close shop and cut your losses. Nonetheless, there have also been instances where startup founders have quit their projects only to see someone succeed with almost the same idea.
Usually, when you have a product the market needs and your existing customers are responding positively to your products and services, it is okay to try a little longer even when you hit a rough patch. It is also okay to give up a significant stake of your business to outside investors to keep your business afloat if the only way forward is to close shop or lose your controlling stake.
Most of the people who give up too early probably never took the time to seriously consider all that it would take to get what they want. Building a business from the ground up is a lot of hard work.
Making unforced errors in business is like shooting yourself in the foot. Repeating the same startup mistakes those who came before you made qualifies as an unforced error. Keep these tips in mind when it comes to the success of your business.