Four Mistakes to Avoid When Starting a Business
A couple of months ago, I was telling someone that my job is to help people start businesses and she responded, “So basically you make dreams come true!”
For some people, that is the case! Either the business itself is the dream or the business provides the means to help them accomplish their dreams.
But it’s no secret that all entrepreneurs do not share the same fate. We all know of storefronts that see businesses come and go year after year, or maybe even personally know someone who had a business that folded.
So what is the difference between the businesses that “make it big” and the ones that can’t seem to get off the ground? Is it just luck or are there things you can avoid to help you on your path to success?
From my experience, here are the most common mistakes that I have found among aspiring entrepreneurs:
Mistake 1. Falling In Love with Your Solution
The most common mistake I see entrepreneurs making is falling in love with their solution.
I like to say that your first solution is like your first girlfriend or boyfriend. It seems like such a good idea at the time but when you look back on it later, you ask yourself, “What was I thinking?” If you’re married, you probably went on to date several more people and each time you learned more about worked and didn’t work until you found “the one.”
Your business concept should be the same. As Brad D. Smith, West Virginia native and executive chairman of Intuit’s board of directors is known for saying, “Fall in love with the problem, not the solution.”
When you fall in love with a problem, you are less likely to go with your first solution and more likely to find the best solution by generating as many ideas as possible and iterating until you find the one the delivers the biggest customer benefit.
Date your solution, don’t marry it.
Mistake 2. One Size Fits All Approach
Another common mistake is the one size fits all approach. It is easy to want to identify “everyone” as your target market or to want to design the “do it all” app. More customers equals more money, right? Unfortunately, as Bonnie Gillespie is quoted saying, “When you try to be everything to everyone, you accomplish being nothing to anyone.”
The more specific you are about your customer and solution, the more amazing the benefit you deliver becomes. The more amazing the benefit, the more your customers will tell their friends. The more they tell their friends, the more customers you will have.
Remember that Facebook started with just Harvard students. Amazon started with just books.
Get comfortable with being uncomfortably narrow.
Mistake 3. Not Closing the Say-Do Gap
According to a 2021 CB Insights report, 35% of startups fail because there is no market need. It is so important to validate demand for your product or service before launching your business.
The next common mistake that entrepreneurs make is attempting to validate demand simply by asking people if they like their idea. The problem with this is that people will tell you what they think you want to hear (especially your friends and family). Its not that they’re lying to you. It is just easy to say that you would hypothetically buy or do something.
But what will your customers/potential customers do when they have to put some “skin in the game”? Will they enter their credit card number to put down a deposit or make a pre-order? Will they book an appointment? Will they enter their contact information?
Focus on what customers do, not what they say they will do.
Mistake 4. Too Much, Too Soon
Starting a business can be a huge investment. It breaks my heart when I see entrepreneurs pour their life savings into a launch and then see it close down months later.
The mistake here is typically doing too much, too soon. I always advise entrepreneurs to do the next quickest, cheapest thing to test their assumptions. If you want to start a restaurant, you will need to see if people like your recipes. Start with a table at a farmer’s market or by taking “meal prep” orders on social media before jumping to a food truck or a restaurant.
If you want to start a health and wellness app where customers can interact with nutrition coaches, you have to see if you can source coaches first. Try using a no-code tool like Bubble or Figma to build a test version before paying someone to program the full app for you.
Building traction and gathering in-market evidence can help you derisk “going all in” and can also make you more attractive to investors.
Make small bets.
If you would like to avoid these common mistakes when starting a business, design thinking is a powerful tool that can be used to innovate creative, customer-centric solutions to complex problems. At the Marshall University Center for Entrepreneurship and Business Innovation (iCenter), we use Design for Delight (D4D), Intuit’s approach to design thinking. D4D helps you to fall in love with a problem through deep customer empathy, utilize divergent and convergent thinking to generate a wide range of innovative solutions and narrow to the best one, and rapidly prototype and test your idea on customers to help you iterate while saving time and resources.
If you would like to learn more about D4D, please contact Tricia to learn more at email@example.com
This blog originally appeared on the West Virginia BusinessLink Blog. West Virginia BusinessLink’s mission is to help small businesses thrive. WV BusinessLink provides entrepreneurs and small business owners with free, easy access to the assistance, resources, and information they need—when they need it.