startups · 03 Jan 2023

10 Common Mistakes Early Stage Startups Make And How To Avoid Them

Andrei Zanouski

Andrei Zanouski

JavaScript Developer

Illustration by Amir Kerr

Launching a startup isn't as fun as it may seem at first glance. Everyone starts their entrepreneurial journey bright-eyed, enthusiastic, and barely aware of how many challenges await them ahead. The post-pandemic fallout and the rumblings of recession add to the shaky business landscape, putting 65% of small businesses at risk of closing.

Based on our experience working with startups, we have noticed that small business owners often make the same mistakes, meaning many new businesses fail due to similar factors. 

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Top 20 Reasons Startups Fail. Source: CB Insights

In this article, we will discuss the top mistakes made during a startup launch that you’ll want to avoid. As they say, it is critical to “[l]earn from the mistakes of others.” So, let’s get started!

1. No or Insufficient Planning

As soon as you find an innovative idea, the desire to implement it arises. In some cases, a business plan, technical specification and design were on the agenda several days after the idea was thought up. However, it is possible that the enthusiasm behind a new idea will fade, and any resources, like money and time, spent on this idea would be wasted. 

This is why you shouldn't hurry your startup's launch until you are sure you want to move forward with your idea. Live with the idea, think everything through, closely study your target audience, analyze your competitors' strengths and weaknesses, and determine key features of your future product. Then, after you've done your research, write your business plan.

So, if some time has passed, you haven't gotten scared by the possible challenges, and the idea still seems to be groundbreaking, it may be time to step into the game!

2. Launching Too Slowly

While working on your idea, it's easy to find millions of excuses for delaying your launch. You can plan and research forever, but nothing is really finished until your startup is released. Excessive perfectionism may lead to wasted time creating a product that your customers don't really need. 

Often, many entrepreneurs worry that if their product is not perfect, then their audience won't come back. Let's be honest, there's no brand until you build it, and there are billions of people out there. 

In your startup's early days, it won't matter much if a few people don't like your MVP. It is better to share your product with your customers; this allows your customers to provide continuous feedback that will shape your final product.

Related: 27 Steps to a Successful Mobile App Launch

3. Hiding Your Idea from Others

Don't be afraid that someone will steal your idea if you share it with others. It doesn't matter who shares their idea first; it is the implementation that makes a difference. 

For example, Facebook wasn't the first social network, and Google wasn't the first search engine – they just created a better service than their competitors. If your idea is worth it, replicas will inevitably appear. When starting a business, your goal is to be the best implementation of your idea, not the first one. 

By hiding your idea, you lose resources like advice, feedback and opinions. Often, your peers can suggest new ideas or open your eyes to severe oversights. Some may offer you help, while others might recommend field experts.

Speaking up about your idea may bring more benefits than you think. Nonetheless, we don't recommend sharing every intricate detail with everyone. When sharing your ideas for feedback, you should remain prudent and reasonable.

Related: How to Come up with an App Idea and Make Sure It Is Valid

4. Trying to Do Everything Alone 

Founders often try to take on too many tasks, which is a major problem. For instance, a founder may be a marketer in the morning, a developer in the afternoon, and an SEO specialist in the evening. While juggling these roles, this founder also needs to find time to speak with prospective customers and sign agreements. Startup entrepreneurs can spend the lion's share of their working time on tasks that don't generate income, such as hiring, payroll and HR tasks.

In this founder scenario, we are depicting the core of the problem of taking on too many roles at your startup. Multitasking means that you aren't efficiently spending your time, and your results suffer in the process.

Our solution? You should do what you like to do! If you are a marketing specialist, focus on marketing; if you are a developer, code – delegate the rest of the responsibilities.

It's almost impossible to create a product on your own, and you will need a team that can take on some of the responsibilities. Thus, a significant budget, investments, and interested parties, who are ready to implement your idea, are necessary. 

When considering who you should work with, remember that their interest shouldn't be the deciding factor. You should make sure that the individual fits in with you and your team. If you decide to move forward, boldly offer the individual a fair share in your company. Remember, the time they will spend working on the final product is just as valuable as monetary investments.

Alluding back to our last tip, remember, don't hide your idea. By hiding your idea, you won't be able to find the right team of individuals to properly share your workload with. 

5. Blindly Following Your Business Idea

It is not likely that you will create the exact product that you first imagined. For example, while working on your startup, you may meet new specialists who can add their own ideas and perspective. Further, when you start communicating with potential clients, you will be able to gauge your customers' needs, too. 

All this feedback affects the final functionality of your service. Others' input may help you evolve your initial product idea, and you may even end up with a brand-new, better product. Remember that your main goal isn't about adhering to the initial business plan but creating a beneficial product based on your customers' needs! 

6. Lacking Focus on Customers

We often hear the phrase: “Let's do this idea because I believe this function will be in demand.” In many cases, the demand doesn't arise, and using assumptive logic is the biggest mistake. 

Remember, your vision may differ from users' desires. Therefore, before starting product development, make sure that all the features are in demand and necessary. 

For instance, we have had some projects where we developed functionality based mostly on the client's assumptions and desires. After the functionality was complete, it was clear that no one needed it. 

As CB Insights' report says, neglecting a market need is the number one reason for startup failure in a notable 42% of cases. So, if you aren't sure that your product will be in demand, don't experiment if you don't have the budget just because you are relying on your desire-driven assumptions.

7. Making Your Product Too Complex

Are you working on something new and aren't sure if your product will gain popularity? Start with an MVP version. Just add the necessary functionality to simplify the product for your users.

As you gain more customers, you can work on developing secondary features. Still, as you add more features, you will want to ensure that they are as simple and intuitive as possible.

8. Saving Money on Development

Having your own team of developers is great. However, relying on your own team leads to numerous additional expenditures and potential problems. That's why the best option may be to outsource product development.

For example, one time, a startup that had a negative development team experience turned to us at Orangesoft. In the very beginning, they decided to hire freelancers in order to cut costs. The startup founder, who didn't have any experience in development, took on the manager role. 

From there, all freelancers worked separately without communicating with each other. When it was finally time to combine all the freelancer's individual pieces into one app, the result was disastrous; all of their technology stacks were completely different. 

The founder was shocked because this meant that the whole project needed to be re-coded. When the freelancers started to work together, they eventually realized that it wasn't going to be possible to make the code work, as each of their technology stacks was different and none of the freelancers could agree on a single technology stack.

Our example above highlights the importance of experience when working on product development. Don't try to make up a development team without a professional CTO and proper management. Otherwise, development can turn into a mess. 

Consider hiring an outsourcing company to develop your product. When outsourcing to an established company, you increase your chances of business success because these companies provide a team of tech professionals with the required skill sets and experience, as well as established business processes. 

We at Orangesoft have set up a reliable product development process. First, our business analysts and technical specialists closely study the project, sort out the details, and compose or adjust the technical specification if necessary. Changes are normal at this stage, as our professional experience allows us to notice flaws and suggest more appropriate solutions. 

Then, we need to agree on a technology stack. After this decision is made, we select an appropriate team of tech specialists and start the development. If you need a consultation or an accurate quote for development costs, please contact us.

9. Saving on Design

What is design? The design considers usability, conversions and the user's first impression. All of these factors are highly important. 

No matter how great the technical implementation is, a bad design can ruin a product. Therefore, you will want to look for designers properly and study their design portfolios. When hiring a designer, you can use an agency or a freelancer. 

For your product's design, professionals will be costly, but a great design is worth paying for. Saving on the design increases the chance of losing potential clients. Moreover, a well-done design means you're avoiding potential developmental problems, as a professional designer can suggest the most reasonable solutions for usability and development processes. 

10. Spending Money Thoughtlessly

Some startups spend too much money at an early stage. At the beginning of your startup, we believe that you can save money by not spending on company merchandise, costly office parties, personal assistants and over-the-top billboard advertisements. 

Instead, use your resources on important purchases. For example, it is much more important to spend resources hiring specialists that are crucial to creating your vision. Also, we recommend being careful with promotion channels so as not to go over budget. 

Further, don't underestimate budget planning – it's essential. Your resources should be well-allocated within all the stages, from development to the product launch. 

Don't hope for future investments. Instead, you should only rely on your existing resources. Otherwise, you risk facing a situation where the product is ready, but there is no budget to promote your product during its launch. 

Ensure Your Startup Growth

In this article, we have shared the most common mistakes startups make during development. However, this is not a fully exhaustive list, and there are other challenges that you may run into when launching your startup. Hopefully, our tips will help you to avoid the most common startup mistakes and put you on the road to a successful business.

What should you not do in a startup?

  1. Don’t launch your startup until you are ready.
  2. Don’t launch too slowly because of excessive perfectionism.
  3. Don’t hide your idea – share.
  4. Don’t try to do everything alone – delegate.
  5. Don’t blindly follow your idea – adapt.
  6. Don’t solely rely on your desires and emotions.
  7. Don't add unnecessary features from the start.
  8. Don’t skimp on development.
  9. Don’t save on design.
  10. Don’t spend too many resources.

Why do 90% of startups fail?

The top reasons why startups fail:
- No market need (analyze what market requires),
- Ran out of cash (plan your budget),
- Not the right team (cooperate with good specialists),
- Get outcompeted (be competitive, promote your project),
- Pricing, cost issues (conduct market research before setting the price)

How long does it take before a startup becomes profitable?

The time needed for a startup to become profitable depends on many factors like the industry it operates in, and the startup’s initial costs and business model. Thus, it is impossible to define an average time to profitability for a startup.

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