Publication number: ELQ-46317-1
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How to Avoid Disastrous New Venture Strategies
10 New Venture Strategies That Often Lead To Disaster
Introduction
Every entrepreneur I know has their favorite excuse for a previous failure – an investor backed out, the economy took a downturn, or a supplier delivered bad quality. These things outside your control do happen, but based on my years of experience as a startup advisor and angel investor, I still see too many strategies leading to failure that are inside the entrepreneur decision realm.
I certainly agree that starting a business is fraught with risk, and none of us get it all right the first time. It’s important to learn from your own mistakes, but it’s even smarter to learn from someone else’s mistakes, without paying their high price in time lost, cost, and pain. In that spirit, I offer my perspective on ten common startup failure sources that rarely get admitted by entrepreneurs:
- Step n°1 |
Choose to skip the written business plan
I believe the old adage that you don’t know what you don’t know until you try to write it down. A business plan is for you first, not investors. The discipline of writing down your plan is the best way to make sure you understand how to transform your idea into a business, and how to communicate it.
- Step n°2 |
Offer free solutions to bring in more customers
Don’t get caught in the myth that you shouldn’t worry about monetization until after you have a large customer base. Viral marketing costs real money, and your support staff and hosting systems cost even more. Even non-profits need a profitable business model to offset staff and operating costs. - Step n°3 |
Assume passion level defines business opportunity
There is no substitute for market research to confirm that your passion matches a real need in the market. Not every great idea is a viable business. Social causes are great, but your ability to sustain your value contribution is directly linked to your ability to find paying customers.
