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8 Ways to Kill the Business You Are Striving to Build

8 Ways to Kill the Business You Are Striving to Build

Entrepreneurship is very risky and really tough. The typical startup lasts two years. More startups fail than succeed. And yet, in boom times and busts, entrepreneurs continue to take on this heavy lift.

Why?

Is it money? Autonomy? Ego? Impact? After years of experience in C-level roles with Fortune 500 companies, Silicon Valley startups, and as a venture capital executive, a word that I would choose is Opportunity. Entrepreneurs believe in possibilities. They believe they can succeed and make a difference—and many of them do.

Figuring out exactly the right moves to achieve success can be elusive. However, there are at least  8 tried and true ways to tank a new company. As you figure out your “right” moves, don’t sabotage your business by making these mistakes.

8. You Forget It Is the Market – THE most common mistake entrepreneurs make
  • Everyone you asked “loved it” … (but they weren’t the target market).
  • Users were ready to pilot … (but they were not the buyers with a budget).
  • Your solution “did it” better and faster than the competition … (but the problem it solved wasn’t big enough).
  • Your app was “cool” … (300 free versions already exist).
  • Need: Honest target market feature survey
7. You Are Unorganized – EVERY detail matters every time. Every detail is a test.
  • Poor first impressions cannot be undone.
  • Ignoring guidance.
  • Late correspondence.
  • Sloppy emails
  • Poor presentations
  • Need: Prioritize your time/organization
6. You Are Not Professional in Everything You Do.
  • Hired a low-cost software company to finish my code without a contract clause protecting IP ownership.
  • Hired a low-cost grad student to finish the project…(and then they went back to India). 
  • Enabled supplier to manufacture company parts…(but also for anybody else).
  • Hired an HR person without building our HR Infrastructure, process, and documentation.
  • Need: Legal/Agency guidance and advice.
5. You Hire without a Prioritized Plan.
  • “Got my buddy—a great guy– to join.”…(but really needed specific business development skills). 
  • Hired the best development team in the area…(but needed a sales team).
  • Retained reputedly “great” salesperson …(who never made quota).
  • Retained “great” engineering manager…(who is always late on everything).
  • Need: Hire Based on Annual SWOT  Analysis…(strengths, weaknesses, opportunities, threats). 
4. You squander Equity – Wastes Resources and Complicates CAP Table, Making the Company Un-investable.
  • Startups need to put in place a strategic equity plan before handing out shares. 
  • “Got Tom, Sally, Fred, and Betty to join for 5% equity.”
  • “Locked in ABC Software to do the work for 4 % ownership.”
  • “Professor Fred signed up to be on our advisory board for 5% of the company.”
  • “I almost forgot—I promised my Uncle John 10% equity for his $20K!”
  • Need: Create (with professional advice) a long-term,  five-year equity plan
3. You Take Too Dang Long with Everything – In Some Cases Time to Market Is Critical; In Some Cases It Is Everything. 
  • Act with a sense of urgency in everything you do.
  • Fail fast and redirect resources.
  • As soon as the market proves you wrong, pivot.
  • Horde your cash.
  • Need: Some amount of paranoia is good.
2. You Always Do It Your Way – You Hate Asking for Help.
  • The most successful projects are managed by cross-functional teams.
  • Company-wide commitment to quality is the antidote for suffering margins and run-away costs.
  • Choose service providers (CPAs, attorneys, bankers) who have a track record with startups.
  • Entrepreneurs want to help other entrepreneurs. Seek out those who have gone before.
  • Your company’s advisory board or board of directors is your secret power. Call on them.
  • Need: Know when you need help.
  • And the #1 way to screw it up: YOU ARE NOT DOING WHAT YOU ENJOY!
  • Building a company is a lot of hard work.
  • Plan on taking six years at least to even begin to scale.
  • Personal satisfaction and financial security will follow.
  • Need: Enjoy the challenge of the opportunity.

Many people have good ideas. In 2024, new business applications averaged about 430,000 per month. Small businesses created over 70 percent of net new jobs since 2019. The hundreds of thousands of entrepreneurs who are developing business models and acquiring human and capital are fully responsible for these startup’s success or failure.

Closing the distance between opportunity and success is a long road. Don’t let unforced mistakes make the road bumpier.