Top 10 Mistakes By Entrepreneurs
Steve Woit of Xconomy lives to tell about the Top 10 Mistakes By Entrepreneurs. Below is his list to discuss ... really - you have to.
But first, check out Misanthropy Today's 10 Rules For Startups - a fun and valuable response to the same lists by Jason Calcanis and Mark Cuban
Now, the list from an adult at Xconomy:
1. Under-valuing the importance of your management team (i.e., staffing with friends or neighbors; delaying personnel decisions; devoting too much time to your technology or your product and too little to developing your team).
2. Attempting to build your business around rocket science (zealously pursuing your technology but overlooking the business opportunity; failing to address how the technology solves a real problem in a cost-effective manner; failing to focus on the needs of potential customers; failing to achieve balance between your technology’s primary function and advancing the broader value proposition of your business).
3. Assembling the wrong ownership group (choosing among potential investors based on highest bid; failing to understand investor needs in advance; choosing investors whose styles are dysfunctional or who do not bring added value).
4. Over-valuing the business at critical junctures (over-valuing when fundraising or selling; As a corollary, we noted that another related mistake was not fully evaluating term sheet provisions that affect the valuation).
5. Failing to communicate with important constituencies (over-promising and under-delivering; overlooking or not addressing the evolving needs of your investors, of those who regulate your technology, or of your customers, of the rest of your team).
6. Failing to tap knowledgeable advice (not seeking tax advice, accounting advice, or IP advice at the appropriate time; failing to properly utilize the Board; listening to the wrong people; selecting an entity structure not well-suited for the business or an unnecessarily complicated capital structure).
7. Fear of dilution or loss of control (raising too little capital; investing too many personal assets in the business).
8. Spending too much for too little (spending too much of what little you have on items that provide too little benefit).
9. Partnering too early (losing control of a business opportunity or your brand to a customer or strategic partner).
10. Failing to understand the changing roles of founders (recognizing the appropriate time to transition).
= = =
Since you made it this far, Here is a treat. Below is The Greater Boston Innovation Map of the locations of companies trying not to make the above mistakes...