Top mistakes new entrepreneurs make and what to do instead

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By Smith Willas

Approximately 25 % start-up firms shut down within the first year of their establishment. Call it the animal spirit of capitalism or the Darwinian natural selection in the corporate jungle, but start up enterprises die in stages of infancy. The list of reasons for entrepreneurs failing to make it across into the second year list from the purely financial, technological, marketing based to the lack of people skills. But wait a minute. Entrepreneurs fail, enterprises die, but entrepreneurship does not.

We take you through a list of what we believe are the top most mistakes that entrepreneurs make and what you should be doing instead. Remember that working on a regular white collar job for a corporation with a guaranteed pay check at the end of the month and working independently or even co-dependently for self are two different things. Therefore, it makes enormous good sense to assert at the very outset that what matters are the business lessons that you walk away with from the mistakes that others have already made or even the ones that you may have made. The crux of the matter is that you got to keep the tail up while learning from the knocks that you take. Take a look at these mistakes that entrepreneurs generally make.

– Not empathizing with people

First, entrepreneurs like others are just human beings, not machines. There is nothing wrong about entrepreneurs committing mistakes. It is a part of being human. What is rather wrong is for entrepreneurs not to be human enough to understand the people that they shall be walking with. Right from the employees that they would be working with to the customers that they would be working for, entrepreneurs may fail to step into the shoes of others to get a hang of what they want. In his autobiography, Hit Refresh, Satya Nadella, the CEO of Microsoft, talks of the absence of empathy and what it means for business leaders, corporate executives and entrepreneurs.

Instead, be empathetic. Learn to step into the shoes of the other person. Put yourself in his or her position and map the pain points that the person is going through. How will it make you a better entrepreneur? It shall enable you to make better decisions, assess the challenges that people face, make you more creative in terms of product design or envisaging the concept that you aim to sell and finally create a solution that can add value.

– Not being clear about the value proposition

Second, in our list of the top mistakes that entrepreneurs commit is not being clear with the value proposition that you want to deliver. There are several instances of start-up firms going bust in the very first year because their product did not add value to customers, was overpriced and thus overestimated the value that they delivered or under-priced and thus underestimated the value that they delivered through their products.

Recall the Talisman of Mahatma Gandhi. The idea of action that you are working on must create value and positively impact the lives of the people. In other words ask yourself if you are sure and crystal clear about the value that you are delivering through the product or the service that you aim to offer. Use a market research software product if need be to get an insight into the value propositions being created by contemporaries in your industry, the trends of pricing, cost factors and the response of customers.

– Failing with time management

Third on our list of the most common mistakes that entrepreneurs commit is their inability to get the timing right. Two oft repeated mistakes that need to be discussed with respect to time management are as follows. Entrepreneurs very often consider what is urgent to be important and attempt it first and very often on their own, without accounting for the time engagement, the value of the task and secondly, consider what is distant to be unimportant.

The lesson that you need to walk away with is to understand that the truth is quiet the converse. What is urgent is usually not important and thus can be delegated to employees. You should track employee time at work to count the progress of the task and check on the hours that you are being productive. On the other hand what is usually distant and can be kept for another day is something that has got to be done in phases, is the long haul and thus needs your attention, time and effort in small doses but on a daily basis. Move slowly with these tasks, but make sure that you keep moving nevertheless.

– Trying to hit the ground running

Talk of the greatest failures in start-up businesses of all time and you are sure to come across entrepreneurs that tried to hit the ground running and therefore crashed. How many times do we see entrepreneurs trying to drive through at speed on the business highway with mist on the screen? The result is that start-up firms that come up on shaky foundations with entrepreneurs having little or no knowledge of the business model, the revenue model and the cash flow and fund flow find themselves in serious trouble very soon and are forced to shut shop at a very short notice.

Instead, take a long and hard look at the industry economics. Ask serious questions to self about the pay-out time, the gestation period, the quantum of upfront capital investment, the return on investment and compounded annual growth rate of the industry. Do a thorough research on revenue, pricing, costs and product development ideas. Take your time, moonlight on the start-up model, incubate the ideas that you have and if required seek expert opinion from people that have been there and done it on professional networking sites like LinkedIn.

– Getting the marketing communication strategy wrong

Last but not the least comes the most non-technical yet the most suave part of entrepreneurship. It is probable that communication does not follow an algorithm and thus even those entrepreneurs that understand the number crunching fail on account of getting their marketing communication strategy right. It includes a whole lot of mistakes in the marketing and content strategy across media and platforms like the web, social media, press release sites and video sharing platforms.

First, think through the alignment of the content strategy with your business and marketing strategies. Analyze the timing of the release of content on diverse digital channels. Remember that the way you create and publish content is more about your brand positioning than merely content. Hire specialized freelancers for social media marketing, content writing and graphic designing instead of doing it yourself.

In the final diagnosis, remember that entrepreneurship in the modern day is not about selling products and services. Primarily it is about solution sales. If you can get your act right in terms of offering a solution to challenges, create value and build scale with a clear idea of the direction that you want to chart and the distance that you want to go, it should be an exciting if not a completely seamless ride. Hang in there, learn the lessons and keep moving forward.


Smith Willas is a freelance writer, blogger, and digital media journalist. He has a management degree in Supply Chain & Operations Management and Marketing and boasts a wide-ranging background in digital media.

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