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10 Mistakes That Start-Up Entrepreneurs Make

Having read all this drivel in the article and online comments about mistakes start-up companies make, it appears most so-called entrepreneurs are living in the past. Here is my list: 1. Regardless of one's hard work, etc, the business environment today, negative or positive, overwhelms any business plans you may have. Example: government wiped out boat shops with an excise tax. Don't go into businesses that are over-regulated by government. 2. Recognize changes in direction of the business climate. It's a very onerous time to start a restaurant, but maybe a good time to start a pawn shop, gun shop, seed for crops. 3. Recognize Google and Craig's list started without a business plan or even a profit-component to their startup. Their idea was gain traffic and then install revenue centers. 4. The model for many industries today is cheat, make illicit profit, and then reform later and become a legit company now that you have money to fight off all the lawsuits. For example, there is only one model for successful marketing of dietary supplements today, which is ignore FDA and FTC regulations, run past your competitors, take market share away, and then reform before the government agencies come after you. Sadly, this is the state of affairs in many industries today and it is fed by the outlaw online environment that Google oversees. (Google does not enforce FTC advertising guidelines as all other ad venues do (TV, radio, newspaper). 5. Recognize you can seemly do what appears to be correct, but it can backfire today. Example: send a press release to an online PR agency for online distribution. The PR company will issue your release to other parties who post your material to attract online traffic, then post a Google ad box next to it that sends online viewers to your competitors. You just got screwed! Yes, you need to have all the attributes for success, the ability to grow your business in steps and not outstrip your capital, and to delegate rather than abrogate or relegate, and to work on distribution as hard as you do your product. But understanding these basics represent the little leagues in today's shark-infested entrepreneurial marketplace. Capital just gives you an opportunity to make some mistakes before you fail. Hopefully, you don't need a long learning curve. New ventures are developing strategies and targets that are dynamic -- so much so that written business plans are outdated that day they are completed. It's best to have all the key numbers of your business (monthly sales, # of new customers per month, demographic profile of your customers, etc) in your head. You must know a key number, revenues generated per employee, in order to know which direction your business is headed.

Rebuttle:


I think Mr Sardi may be one cynical person but as with most readers in the WSJ, there is also truth, especially the part about recognizing changes in the business environment. I also agree with Mr. Sisson that a successful entrepreneur needs 10X the level of optimism of the average person.

As the CEO and co-founder of our start-up, I am continually amazed at the emotional rollercoaster I and the other co-founder go through, often within a single day. Two days ago, we lost our bid to be "launched" at a big mobile show, and I had two investors tell us they're not funding us. That was a bad hair day :-) Today, we have a term sheet and an employee we were dying to get said "yes."

So I would add the biggest mistake you can make as an entrepreneur is to stop believing in yourself and your gut. Once you give up, you lose. I have to tell myself that every single day. Every other mistake on the list is a derivative of this mistake, in my humble opinion. Paul