Did you know, that 20% of new businesses have to close after the first two years of operating, and around 50% of businesses fail to make it past the fifth year. Being the founder of a start-up comes with many highs and lows. We do our best to learn from others so that we can all focus on building businesses that will thrive.
There are many founders out there who have started a business and quickly learned difficult lessons in the process.
We spoke to several founders of start-up companies and we asked them: “What mistakes did you wish you could have avoided in your first year as a founder?”
Here is what we learnt from the founders who participated:
Not investing in a leadership team
“The most common mistake is not investing in the leadership team because you are worried about adding overheads, but it is impossible to grow the business without building the foundations of a leadership team who are experts in their field.
As a founder, it is extremely difficult for you to do everything and do it well and you risk burning out! We were getting really behind in producing our monthly management accounts and we wanted to fundraise but had no idea where to start. At Fizzbox, we recruited a finance manager who completely automated our accounts process using APIs and also had done a fundraising round before so they could take the lead on this. Delegating these tasks to the finance manager made a huge impact on our business.”
Rob Hill, Founder of Fizzbox
Waiting for the perfect moment to launch
“Should you jump headlong into a brand-new industry? Of course not. But you also shouldn’t wait forever to take those first steps. It’s easy to fall into the trap of waiting for the “right” moment, but there will always be a reason to keep waiting. You’re capable of learning as you go, and those mistakes that you will inevitably make along the way will be excellent lessons to keep you on the right path in the future.
“Initially, we only had a video-chat feature and an interactive map for kids and teachers.
“However, through mistakes and setbacks, we’ve evolved to include thousands of native- speaking teachers, VR and AR technology, gamification and machine learning to help more than 500,000 students globally.
In our early days, the more rudimentary prototype was sufficient to get us started and help us learn what worked and what didn’t. It also proved product-market fit and set us on a growth trajectory that allowed us to scale through the Covid-19 lockdowns. If we had waited until we had a “perfect” solution, Novakid still would be just a pipe dream.”
Max Azarov, Founder of Novakid
Not getting advice and being afraid of sharing your idea
“My advice to founders, especially first-time founders, is to not be afraid of sharing your idea with as many people as possible. Getting that feedback, guidance, and advice is what will help place your business in the position to grow. If you are scared someone will steal your idea, you’re probably not the best person to fulfil it!
“Getting feedback and guidance allowed us to iron out the idea into a business opportunity. Usually, the idea itself is the foundation and vision for the company, but the stuff that makes it a viable business opportunity is iterated after speaking with people who have experience in areas you might not have- You don’t have to take all advice.
“Ultimately, you’re the founder, and you can decide what is best for your company. I would always suggest listening, sitting on it and taking some thought, revisiting and asking questions, then deciding whether to take it or not. Founders are traditionally egotistic of their own ideas, I know I was/am, but there are almost certainly things you can improve on!
“Get trademarked as soon as possible to protect your ideas. It’s a pain in the neck if you go so far as to find out you can’t use your brand name for legal reasons. If it’s patent applicable, look at ways to protect that design, if it’s just an idea look at the things which are particularly unique for your idea and you don’t have to give specifics about those things until you trust whom you’re talking to is there for you and not just the idea itself!”
– Thomas Panton, founder of Greenr.co.uk
Avoid buying too much stock
“Having too much inventory-when you have too much stock, it eats up on the profits, especially if the things you keep have a shelf life.
An example is buying additional stock for an order that you haven’t secured a deposit for yet. Then the customer ends up changing their mind about ordering from you. You’re left with having more stock of what you don’t need. What if it’s perishable?
Only purchase once an order has been confirmed and you have taken a deposit to fulfil your service or product.”
Viva O’Flynn founder of Viva Cakes
Thinking your business will take off instantly
“I think it’s about managing expectations. Just because you think your product or service is the best thing since sliced bread doesn’t mean you will be fighting off customers from day one.
So be realistic – expect to spend many, many hours a week working in and on the business, for many months, and make sure you have enough money to do more marketing than you think you will need, and don’t expect to be in a position to draw a meaningful salary for quite some time – so living expenses need to be factored in too. If the business does take off quickly, that’s a bonus, but if it doesn’t, there will be no nasty surprises.”
Jane Hatton founder of Evenbreak
LeaderBridge: A network of founders finding matches with other founders with similar challenges
If you’re a founder reading this, and feel like you can relate or learn from the experiences of other founders, then it’s time to join the LeaderBridge platform – Available both on desktop and as an app, LeaderBridge allows vetted founders to ask questions and answer questions from other founders.
We’re currently in our beta launch.
