Common Mistakes

Intro

There are common mistakes founders make that kill startups. Most of them sound obvious when you read them, and yet founders make them. The reason for that is that founders tend to not clearly see the reality but distort these data points through their own bias.

If you can avoid these common traps, your chances of success don't just go up slightly; they multiply.

Competition is bad

The most common mistake is to believe that competition is bad. The opposite is true: if you don't have competition in your market, chances are you are building something that the market doesn't want.

Lack of competition usually signals market risk - the risk that nobody cares. Most successful startups like Paypal, Google, Facebook, or Dropbox had existing competition when they started. It is a positive signal because it confirms a market already exists.

However, simply copying what your competition is doing is a bad strategy. That leads to playing catch-up and competing on price. Instead, you need to find a "wedge"—a specific insight or a specific customer segment that the incumbent is ignoring.

Don't study your competitors' features.

Study their unhappy customers.

What do they hate about the current solution?

What specific job is the current competition too bloated to solve well?

Startups rarely die because of competition. They die because they don't solve a real problem better than the alternative.

Solution in search of a problem

For founders who are close to technology, it is tempting to start with a cool new tool or architecture. This leads to the "Solution in Search of a Problem" trap. Customers do not care about your tech stack. They don't care if you use the latest database, how fancy your deployments are, or how elegant your code is.

Customers only care about their problem going away.

Too many technical founders spend months rewriting code or "optimizing for scale" before they have a single user. This is a waste of time. As Steve Jobs put it, you need to start with the customer experience and work your way back to the technology. Never the other way around. Code is a liability, not an asset, until it solves a problem for a human being.

Launching too slowly

As a startup prior to product-market fit (PMF), you are in the business of finding truth in the market. It is not about launching something perfect. But about launching something that allows you to learn fast. Perfectionism gets in the way of that.

First find something people want, then make it pretty. The speed of which you test your hypothesis and find truth is the speed at which you will find PMF. And the faster you launch, the better.

This doesn't mean launching something that doesn't work. But it means breaking things down to the most fundamental pieces. This requires trade-offs, but they are worth it.

Doing fake work

Most founders waste their days doing fake work. This is busy work that makes you feel like a CEO but doesn't move you closer to Product-Market Fit. It looks like:

Talking to investors to "get feedback" before you have metrics.
Re-designing your website, logo, or business cards.
Writing business plans or financial projections.
Attending networking events.

The real work is only 3 things:

Building the product (writing code/making the solution).
Talking to users (learning their pain).
Selling (getting users to actually exchange money or time for the product).

Many founders forget the third one. They build and chat, but they never ask for the sale. If you aren't pushing your product into the hands of users and asking for a commitment, you are hiding, not building.

Scaling too early

Scaling without strong PMF is a suicide mission. You will play catch up on your growth sooner than you realize. It doesn't matter how quickly you can trick people into paying for your product, but whether people love your product so much they become lifetime customers.

Scale is a consequence of PMF, not the other way around.

If you don't feel customers pulling your product out of your hand quite organically, you shouldn't think about ads, sales, big funding rounds, or anything else that screams scaling without a solid foundation.

Building for everyone

If you think you are building for everyone, you are not focused. Startups take of after nailing one small market first, and then expanding it to other segments. Building for everyone will spread you too thin across too many fronts. And as a startup you don't have the resources to do so.

It's better to make something 10 people are obsessed with, than something 1000 people sort of like. Don't confuse the two.

Co-founder conflict

Many companies die because the co-founders didn't get along. Although you are not wishing for that outcome, you should plan for it. Vesting and clear agreements what happens when someone decides to move on are mandatory for success.

Not building for yourself

Founders who are building a company for a target customer they don't deeply understand usually fail. The reason for this is that they need to guess the real needs of customers and spend a lot of time studying those. It's hard to develop a real intuition if you haven't experienced the problem you are solving at least to some degree.

The better way to go about it is building for yourself. Pick a problem you personally experienced or have a personal connection to. Not only will you care more about your startup, but also you will be much better at creating a product the people just like you want.

There are exceptions to this rule, but out of your founding team at least one person should have a strong personal connection to the problem. And this person should be the CEO.

Measuring the wrong thing

It's easy to get caught up in vanity metrics. Those are the numbers that make you feel good but don't reveal anything meaningful about your company. The average session duration of your product doesn't tell you much about the quality of your PMF.

Another mistake is measuring too many things. You are not in the mode of optimizing yet, still in the existential challenge of figuring out what to build.

For most startups the north star metric to follow is revenue or daily active users. Even if it feels painful to not see the hard metric move for weeks, it is the only truthful one.

As cliche as it sounds, "what gets measured gets managed". And you need to keep your eye on the ball.

Sharing accountability for metrics

An extension to the above is not putting one person clearly in charge for a metric. The moment you treat a (north-star) metric as a group project is the moment you miss out on growth. Many founders find this hard to believe.

The reason this is a critical discussion in many teams is because founders don't want to hurt the feelings of the others.

But sharing the ownership for a metric across people leads to a sort of agency cost that is hard to notice but real. Instead of waiting for this to blow up, face this conflict head on and get clear on who calls the shots in the pursuit of moving your most important metric (revenue).

Outsourcing product

One of the worst mistakes I see especially business founders make is thinking they can just hire an agency or engineer and let them build the product. That's wrong. You need a strong product person and technical person in your founding team if you are serious about building a tech company.

If you treat your product as an inconvenience or after thought you already lost.

Being high-ego

The only thing you should care about as a founder is the end product you are making. People who put being "right" over finding truth are bad founders. It makes working together harder and harms the progress you make.

You need to build a team where the best idea wins, not the idea you had.

Not listening to customers

The thing that kills most companies is not listening to your customers. The moment you think your take on the world is more right than what customers are telling you, you are moving into dangerous teritory.

The reason a startup exists is to serve customers.

Listening to investors (and not forming your own opinions)

It is easy to get fooled by listening to the wrong advice. Just because someone has "investor" or "VC" on their LinkedIn doesn't mean they understand the specific reality of your customers. Investors operate on pattern matching -they know what worked generally in the past. You operate on context—you know the specific ground truth of your user right now. When patterns clash with context, context wins.

If you just execute what your advisors tell you, you aren't a founder; you are an employee. You need to form your own convictions. Treat investor advice as a data point, not a command. The moment you stop thinking for yourself and start trying to please stakeholders, you lose the unique insight that makes your startup valuable.

You are the only one who can fix your company. Not an investor, not an advisor.

Starting a startup because of status

Another horrible mistake is founding a company because it looks impressive on your cv. This is the wrong motivation and sets you up for failure.

A consequence that often happens is that founders start going after an idea they have no personal connection to. Which in global competition leads to you loosing against someone who cares more deeply and has better intuition because they are building for themselves.

Closing thoughts

There is a long list of mistakes that should be avoided if you want to maximize your likelihood of startup success. And yet, for everyone you can likely find counter examples.

Yet, these are patterns we and other leading people in the field have observed so many times that they are regarded as anti patterns.

With all of this, it is worth motivating that the idea of a perfect start doesn't exist. You shouldn't be discouraged to simply start building something you wish existed. A lot of this you will figure out along the way. And likely you will make a good chunk of those mistakes regardless of knowing about them.

Startup failure is not a hundred mistakes. It's basically one: refusing to see reality as it is.