We’re talking about common mistakes that people make in the early days of a start-up. Here’s the rest of the list, continued from Part 1.
Not Taking the Lean Startup Approach
It is very tempting to build the best and most feature rich product, but does this serve your goals or your target audience? No, it does not. You must identify the minimal viable product which will meet the needs of your target audience and remove all unneeded features and functionality of the initial version. Once your launch your product, you will discover the real needs and features needed – some will be as you might have expected but many will be new and come from your target audience needs and reactions. [see also The Lean Startup]
Not Enough Testing Testing Testing
Testing your product with users – preferably the real target audience – is important and should be done continuously throughout the process of developing the product. This testing is vital to knowing you are heading in the right direction. Failing to test with real users and only basing your tests on your team will bring you to make wrong decisions, discovering your mistakes only when reaching the market.
Not Being Funding Oriented
Investors are very picky where they spend their dollars – asking for an initial working product or seeing traction coming from real customers is very common these days. You should consider approaching investors when your product is mature enough. This will give you a better success rate at raising money and in getting good value for what is spent.
Spending Money in the Wrong Places
Managing the start-up budget requires understanding of what will come ahead and where the best place to spend the money is, in order to increase your impact (i.e. branding, marketing, SEO, development, and hiring ‘top of the line’ team members). The best advice is to try at each step to think of the optimal way to spend your money – while keeping an eye on your overall plan at each of the stages ahead. Perhaps even more importantly, always make enough room for mistakes, miscalculations, and unexpected expenses, so that when you need to afford these problems, you can.
Raising the right amount of money
Starting a venture is often all about managing expectations with investors. Being able to get the right value for your investment will further enable you to get the next round, so it is important to make sure you have enough equity. Aim to keep continuously working according to the budget you have, and don’t assume you’ll have enough based on current calculations. Things always change, and new problems will arise; even the smartest business person cannot anticipate everything that might occur. Denying these possibilities for the sake of making the outcome sound better to investors will only backfire on you if ever something does crop up later on. Keep your investors on the same page as you, and by having a healthy sense of reality you will spending less time putting out fires in the future.
Developing a technology-based product centers around making the right choices early and having the ability to get the right people to do their development work efficiently. Choosing the right people is the first step, then by being able to lead them effectively so that their programming processes go smoothly, your Chief technology officer will be the one to best ensure that your product will be ready to launch on time and within the budget you set. Being able to overcome technical issues as they happen also requires that you have both a good CTO and very good programmers, all of whom are able to think out of the box to find a reasonable solution to the problems as they arise. You cannot overestimate the need for smart people making the right decisions when it comes to developing your product. [see also Building A Team]
Choosing the Wrong Technology or Platform
This is a crucial mistake to avoid early on – the right platform and technology will give you the ability to develop your product on time and be able to overcome technical challenges. You should also consider the amount of support, stability and common knowledge your platform/technology has in the market. Spend your technology dollars in the right place – can this platform and technology grow with you and your company? Will it accommodate decisions you’ll have to make in the future? Can you find programmers that are familiar with this technology? Can you get support for problems that may occur ? These are important things to consider. [for more see Technology – Part of Your Fundamentals]
These days, many services are offered such as SAS or other web services which can be integrated into your product. These might free up time to u concentrate on developing the core of your product or help you to focus on investing in the integration of your product, rather than developing it from scratch. Again, you will need to have a skilled Chief Technology Officer who knows the market, the available tools, and right software libraries to use, to avoid unneeded development costs and to be able to integrate these with existing code, which all will help to put your development effort in the right place.