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Biggest Startup Mistakes From 22 Industry Experts

With the growing appetite for entrepreneurs venturing off on their own and the success of so companies like Uber, Snapchat, and more, it might appear that creating a startup is an easy task. In any casual conversation where you find yourself discussing startups, there is a usual flicker of excitement that flashes across faces, ignited by the idea of going off on their own. Although it may seem like a simple task. It’s not. Take Buddytruk CEO and Founder, Brian Foley for example. Buddytruk wasn’t his first attempt at creating a successful business nor was it even his second. Before Brian founded Buddytruk he tried to start four different companies. Each one crashed and burned. If you’re surprised by this. Don’t be.
buddytruk-austintexas-brianfoley-cjjohnson-1283According to the Harvard Business Journal, 70 to 80% of startups fail to see a return on their projected return on investment. It’s even more jaw-dropping to learn that 95% of companies that issue projections come up short of meeting them. If these statistics scare you. They shouldn’t. If anything, it only proves that creating a solid business strategy and learning from your past mistakes will make you even more successful for your next venture. In Brian’s case, he wasn’t dejected from his past failures. No. He learned from them and began working on Buddytruk.

buddytruk-digitalla-generalassemblyAs he stated in an old interview with Neon Tommy, “Each time we ran a company in the past and it failed, I knew exactly why. So this time around I was more confident than ever raising money and sticking by our mission statement.” Brian’s attitude is 100% spot on. It’s an attitude that entrepreneurs must have to be successful in this industry. Failure is often synonymous with tech startups. In fact, I sent out an e-mail query entitled, “The Biggest Startup Mistakes People Make”. Within 24 hours, my inbox was flooded with hundreds of replies. I couldn’t even get to all of them. There were so many. So, I settled on 22 industry experts to share their biggest startup mistakes.Read below to see what they had to say…


Biggest Startup Mistakes From 22 Industry Experts

1. Mehdi Ait (@Mehdiaitoufkir) Co-Founder and CTO of PunchTab

“One of the biggest mistakes startups and founders make is not getting tough. It’s easy to stay in high-fives-and-hugs mode, but it’s essential for leadership to make the switch from “fun project” to facing the realities of running a company. Building, scaling, and running a company always involves tough moments- that can take the shape of saying no to customers, firing someone you love to work with, cutting costs, shutting down a product that has no future, etc… It’s always difficult, but startups who get tough will see more success.”

2. Mark Tuchscherer (@Geekschicago) President of Geeks Chicago

“One of the biggest mistakes I see all the time with start ups is trying to ramp up to fast. Once things get a little busy for them or the start to see more sales they want start hiring like crazy. We made this mistake in the past also. We had a bunch of projects come in and we went out and hired 5 new developers. Once things slow down a bit you have a lot of overhead and people sitting around waiting for work.”

3. Adam Schwartz (@FreedomAud) CEO of FRESHeTECH

“We designed a shower speaker and didn’t worry about IP protections or protecting our design. The product’s sales blew up and we were heavily knocked off (Groupon and living social have both sold our knockoffs).”

4. Rick Coplin (@RickCoplin) Vice President, Community Partner Ventures at Rev 1 Ventures

“I work with a firm that invests in startups at the concept stage through the market growth stage. The biggest mistake I see entrepreneurs make is not aggressively pursuing customer feedback from day one. Entrepreneurs typically are so passionate about their idea and the impact they can have on the world, that they gloss over understanding what the market will demand and pay for.I’ve seen entrepreneurs spend into the six figures to build their product only to find out that the market is not interested. To avoid this, we require that entrepreneurs seek valid market input through well designed surveys, one-on-one conversations and other means to assess market acceptance of their ideas. Those that do so have significantly better of odds of success and raising funds.”

5. Mark Harmsen (@Mark_Harmsen) CEO of Text Metix

“My biggest mistake with my tech start up was not hiring a technical co-founder right from the start. Outsourcing development and design help will only get you so far. At some point if you plan on growing, you need to bring those resources in-house. Another thing I did poorly was not delegating enough responsibility. You can’t put all the responsibilities and decision making on your shoulders alone. It gets too heavy and there’s not enough time.”

6. Bryan Clayton, CEO of GreenPal

“I am CEO and Co-founder of GreenPal, which is best described as the “Uber for lawn mowing”. The main mistake I see startups make is failing to nail their value proposition. What is it about their product and offer that compels people to say “yes”? Until they know this, any marketing efforts or spend in any channels will be like pouring gasoline on wet leaves.

For instance, when we first launched, we thought people would like our service because its a cheaper way to get their grass cut. What we found through copy testing in different channels such as Ad-Words and FB (Facebook) is that the customers ability to get same day service is a much more effective and compelling subset of our value prop that drives more visitors and more conversions on our landing pages. Nailing your value prop first is crucial.”

7. Frank Avery (@FrankJAvery) Director of Marketing & Communications at Parisleaf

“Gainesville and Alachua County, Florida (our home town and home to the University of Florida) has one of the highest concentrations of business and technology incubators in the nation, including many that have gone to multimillion dollar public offerings and traded groups. We’ve noticed that from the largest to the smallest, many of the tech startups in the community fail to integrate marketing and a Minimum Viable Brand.

Often, they focus on building out a mission and vision, then focus on the art and aesthetic. However, they’ll skip the crucial steps of listening to their peers, closest ambassadors, and early adopters for their product and try to expand too quickly out of that through “marketing” investments in branding. Ultimately, they build a house of cards that collapses when users discover the “experience” doesn’t line up with the “brand.”

8. Lori Cheek (@Loricheeknyc) Founder/ CEO of Cheekd

“As a trained architect, I had no idea what I was getting into building a business. After coming up with the idea in February of 2008, I walked around in circles for over a year trying to figure out how to build my business and two guys came on board to help me (I couldn’t have made a worse choice of a team in my life). They both had the same skill set, are no longer involved in my business and they owned nearly 20% equity. If I’d known what I know now… Team is EVERYTHING. The technical aspect of my business has been one of the bigger challenges I’ve faced and it’s the one thing I definitely would have approached differently from day one. I needed a CTO and 4 years later— I found the missing link and just relaunched my business (new bluetooth dating app) a few weeks ago.”

9. Adam Barnhart (@AllProWebTools) Director of Marketing at AllProWebTools

“We’re part of a high tech startup incubator, Innosphere in Fort Collins, CO, and one of the biggest mistakes we see other startups making is failing to invest in business management software, especially a CRM (customer relationship manager). Having a CRM is crucial for a startup, because startup founders are usually so incredibly busy that it’s almost inevitable for leads and dissatisfied customers to fall through the cracks. CRM software has a reputation for being expensive, bulky, and ill-suited to the needs of small businesses, but cloud-based SaaS CRM software is available.

Startup founders often assume that CRM is out of their price range and ignore it, instead keeping track of contacts, follow-up times, emails, and client notes in spreadsheets, on their smartphones, or worst of all, on sticky notes. A really good solution for startups and other small businesses is to get CRM as part of a larger small business ERP software solution. Many of these are very affordable, operating on a “pay for what you use” basis. This allows startups to keep their software streamlined, but with room to grow alongside the business. Many startups make the mistake of thinking that because they’re small, they can manage all their clients on their own. But this is a reactive mindset that we’ve seen limit the growth of countless startups.”

10. Cherie Gary (@CherieGary) PR Specialist at Gary & Partners LLC

“Independent PR specialist for Republic Wireless who has helped launch more than a dozen tech startup companies from stealth mode obscurity to name brand within their industries. The biggest mistake – external communications. Tech startups start editorial outreach before their product is proven or before they have nailed their story and made an honest effort to see their story in context of the competition and industry – and most importantly from the perspective of the journalist. They easily forget the “What’s in it for me?” factor.

Add in the alphabet soup of acronyms and you’ve just helped prepare a very hard working journalist for afternoon nap. The second biggest mistake is hiring a high priced PR agency thinking they have some sort of magical access – most don’t. Tech startups would be far better served by experienced independent PR pros who already have contacts in your industry. Today’s technology makes it possible for very senior PR professionals to work independently or in small groups so they can bring together the best people for the specific job. How to find these professionals – ask around in your industry. If possible, ask the journalist you are trying to pitch – they know who is really good. Another great resource is Solo PR Pro’s “Find a PR Consultant”.

11. John Nosta (@JohnNosta) President of Nosta Lab

“I work in the digital health space and work with start ups all the time. I find that too many focus on the “device” without strategic thinking. It’s almost a “build it and they will come” mentality.”

12. Felicite Moorman (@FeliciteMoorman) CEO BuLogics and Co-Founder of StratIS EMS

“The biggest challenge I see in the startups with which I work is too many overlapping skills and not enough complimentary skills in the founding team. It makes sense when you consider that many startups today are helmed by those in, or just out, of school, where they met as engineers or marketers, but they didn’t meet engineers as marketers, or marketers as engineers, for instance. When founding teams enjoy focusing on the same area, you’ve an exponentially greater learning curve and a lot more “unknown unknowns.”‘

13. Rob Biederman (@RobertBiederman) Co-Founder of HourlyNerd

“The biggest startup mistake we made was our website. We started with $5,000. It wasn’t a lot of money, but it was enough for us to run a very lean minimum-viable-product test. The first thing we did was hire a developer to build our website. We found a guy in Bangladesh, hired him for $889.99, and went through the extraordinarily painful experience of pushing him to build something useful as quickly as possible.The website was a mess, and since our business was online, we got off to a very rough start.

Since then we’ve redone the website several times and today we’re running a successful small company connecting 5,000 companies with 10,000 MBA student and graduates offering them top rate business consultants. HourlyNerd is an online marketplace connecting top tier freelance, on-demand business consultants with small and medium sized companies, providing them top tier expertise at a fraction of the cost of a traditional consultancy (Bain, McKinsey, Deloitte) firm.”

14. Kevin Linser (@Kevinlinser) Co-Founder NAU App

“BUILDING FEATURES INSTEAD OF BUILDING VALUE! Everyday thousands of startups ask their self why their product doesn’t work, how to grow their user base and instead of understanding real customer needs they build tons of new features. None of them will bring more users, they rather are excuses for poor validation.”

15. Jonathan Pollard (@Jonathanpollard) Non-Compete & Trade Secret Lawyer at Jonathan Pollard LLC

“I represent a number of tech start-ups. The biggest mistake I see is not protecting your intellectual property. That means everything proprietary that your company has developed: software or applications, yes, but also trade secrets and confidential corporate information. Every tech start-up needs an employment or independent contractor agreement that (1) clearly assigns the right to any creation to the company and (2) imposes non-disclosure obligations on anyone who works there. You don’t do this, and employees or contractors can walk out the door with your IP, launch a rival company and claim ownership of everything you’ve built.”

16. Shams Juma (@Quantifye) CEO and Co-Founder at Quantifye

“Secret formula: Launching a business requires more than the right technology, product development and go-to-market strategy. You have to really know the secret ingredient that makes your product or service “tick”. For us, it was trust and relationships.Stealth mode: Many startups, including ours, operate on “stealth mode” until product launch. That was our mistake. We should have instead, reached out to investors, champions, members of the media to seed relationships.

That way, when the product is launched, our path was already paved for us.Making decisions early: We hear time and time again that startups are more prone to imploding than exploding. The right team can absolutely make or break your business. We learned from our mistake and now look for early signs to gauge if someone will be the right or wrong fit and make adjustments much early as needed.”

17. Michael Smith, CEO & Founder of Raster.

“Here are a few….

1. *Assumption consumption*. The biggest mistake I see is *assuming* there is a need for your product rather than *proving* there is a need. It takes a lot of cojones to get out there and gather real, true feedback and metrics for your idea. It’s like going out and asking if people think your kid is cute or not. No one wants to put themselves in the position of hearing “uhhhhh, no”. And most people won’t give you an honest answer even if you’re kid looks like Clint Howard. So, what usually happens? You end up explaining the idea to some friends and family and they all say “That’s a great idea. I would totally buy that”. (Which is BS). As Flava Flav once said “don’t believe the hype”. This is not true feedback and proves nothing. In order to prove your idea, you need to make the smallest financial commitment you can to prove that customers will actually buy your product and not just say they will. Do this early and you will save yourself thousands of dollars and years of lost time that you could have spent working on an idea customers actually wanted.

2. *Going too big too fast*. Another big mistake I see a lot of are startups with an idea that has national implications and thinking they can attack that national market at first launch. If I only had a nickel for every time I’ve heard “the public spends $50 billion on XYZ and we only need to capture 1% of the market”. Slow down turbo. Unless you have millions of dollars for marketing, it ain’t happenin’. Though we all want to believe these big exits happen overnight, they do not. Successful startups take baby steps toward proving the concept and ensuring they are on the right path before scaling. Start out in a region, an industry, or even a single school like Facebook did. Facebook started off for Harvard only. They proved the model with a niche group and then had real adoption rate numbers they could then use to predict scalability and potential. Start small, prove you are going the right direction, gather real numbers, then make decisions on how to scale.

3. *Ignoring your analytics.* I am shocked at how many startups don’t even have analytics, especially when it comes to mobile! Like talking M&M’s and Santa Claus they do exist! You should not ignore them, and you can and should tie them into your mobile app or website. The reality is, without your analytics you are always making some level of assumption. Your analytics are really the only true tell to what’s happening as far as real usage of your system. Your analytics are the voice of your product in a way, so it’s extremely important to pay attention to them, understand them, know how to read them, or at least have someone that does understand how to read them so that you can react to them and make informed decisions as you move forward with your application/product. Google Analytics are free, they work with both web and mobile, and there are plenty of resources on how to use and read them.”

18. Kenny Katzgrau (@Katzgrau) CEO and Founder of Broadstreet Ads

“Startup founders tend to take the opinions of famous startup community thought leaders as dogma. Think VCs, founders who have had a spectacular exit, and those running tech incubators. An outcome of this is that the average founder is convinced that at some point they’ll need to raise money and that revenue is something to think about later. It’s not — you’re much more likely to be successful when you focus on building a business that generates revenue that can sustain the company. Building a successful business isn’t some sort of lottery win. It’s a very attainable goal that comes with hard work, creativity, and focus on the lifeblood of the company: revenue.”

19. Craig Vodnik (@CraigVodnik) Co-founder of Cleverbridge

“1. Not firing fast enough. 2. Too passive sales approach. 3. Growing point to point. 4. Waiting for “that pretty girl” to notice us. 5. Not knowing how to get proper PR.”

20. Agu De Marco (@Agudemarco), CEO of Wideo

“When there is no early on sales strategy, startups can tank. It’s important in the beginning of a startup to have a small group of interested users. While you might think getting as many people as possible to download your app is the best strategy, you may never get feedback in order to improve your product. Selling your product to a few industry-related users will ultimately grow your product, as you’ll create a great product for people who actually want to use it.”

21. Ryan Urban, CEO and Co-Founder of Bounce Exchange (via Raster Media)

“1. Capital or Control: New companies need to walk the fine line between giving away too much control for capital and not getting capital at all.

2. Interview process (hire the wrong people): Getting the hiring right sets the standard and keeps your culture alive. One bad fish can kill the whole pond. Ryan’s company has developed an incredibly ‘robust’ interview process which includes mock client calls, a logic test as well as meetings with the entire management team (no matter the level).

3. 2020 Vision: Got a 5-year plan? Urban thinks that is bull sh*#. Thinking too far out takes away focus on the here and now. Ryan’s teams don’t worry about the big sales goal. They worry about meeting daily, micro-goals. This has helped them blow their “big” goals out of the water.

4. The MIA CEO: If the leader of the company is on-the-road 200 days a year and not with his or her team working on the business, that is a problem. At Bounce Exchange, the executive team doesn’t travel (unless absolutely necessary).. They spend their days with their employees working on the business.

5. Attention to Retention: Too much emphasis on sales and engineers and not enough emphasis on customer service is deadly. Remember: customers make a business. Companies should reward the staff on the front-line fighting for customer retention.”

22. Larry Chao (@Lpchao) Vice President of Marketing at Balluun

“I’ve been fortunate to work for and with a number of startups in my career, and I think one of the biggest mistakes I see startups making is going for scale too quickly.  They don’t take the time to find the product market fit before they invest in activities to drive buzz, including PR and advertisements.  I’ve seen companies spend a tremendous amount of money to drive users without fully taking into account their lifetime value.”


Now that you’ve seen mistakes other experts have made, maybe you can learn from their past mistakes and take a nugget of knowledge with you moving forward. I’m thankful for having them share their insight and provide us with more insight. Have you, yourself had failures with a startup? Stories to share? Leave a comment below. We want to hear from you!

CJ Johnson

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