What do startup founders typically get wrong when starting a business?
- Not committing to 24 months upfront to getting to Real Revenues and a Minimum Sellable Product. I’ve written about this before, but I see it again and again and again. It takes 7–10 years to build something real, and the first stage is the 18–24 months it takes to get real revenues and something off the ground. 8–12 months is almost never enough time. More here: If You’re Going to Do a SaaS Start-Up … You Have to Give it 24 Months – SaaStr
- Picking cofounders that aren’t as committed. Related to the prior point. If you are willing to commit for 2 years to get to MSP and 7–10 years to get to Something Big … but your co-founder isn’t. That’s tough. He or she will probably quit some time in Year 1. More here: A Simple Commitment Test For You And Your Co-Founders – SaaStr
- Not doing enough potential customer interviews. Too many founders shoot from the hip on what they think customers want. Go talk to 20–30 first. This can save you 6–9 months of product development time in the early days. The customers may not give you super-actionable feedback if your product doesn’t exist yet 😉 But they can challenge how you think about the market. That is important. More here: Planning to Do a SaaS Startup? Don’t Forget the 20 Interview Rule. – SaaStr
- Trying to pursue a “Grass is Greener” business model. Enterprise folks want to do freemium because they think it is easier. B2B folks want to do B2C. SMB folks want to go upmarket because there is too much churn in SMB. That’s OK, but pretty risky. 85 times out of 100 — do what you know. If you can close $1m deals — do that. If you can get 1m users for a product — do that.
- Thinking money is what makes the difference. No, a seed round is not what makes the difference. The team is. A great team that is insanely committed often will find a way. Money is critical. But it’s not magic. It’s an accelerant.
- Not committing to building great software. There are probably 10–100 other startups with the same idea. The days of shipping crummy software IMHO at least are sort of over. Are you committed to building a truly great product? Yes, we all start with a hack. But how are you going to ship world-class software in the early-ish days? If you don’t know how, you’ll be eclipsed by those that do.
Published on March 11, 2018