When I was in my late twenties and in the final year of business school, I began to fantasise about starting my own company. I even entered an international entrepreneurship competition with some of my peers, and we made it to the final three. Then life happened: I got a good job, moved from India to the United States, married, and had two wonderful children, and the next two decades went by.
I co-founded Rezolve when I was in my forties. AI, along with two other friends from business school. By the time I began Rezolve, it was already too late. AI I had a lot of prior management experience in different mid and large firms, but as a first-time entrepreneur, the next few years were a steep learning curve – and it was and continues to be an incredible journey.
Over the last few years as an entrepreneur, I’ve learned a lot from my own mistakes as well as engaging with other founders and investors on how to launch your first technology company. Let me share five main pitfalls to avoid as you embark on your startup journey.
Mistake 1: It’s something I’m doing part-time.
This is the most common issue I encounter among startup founders. They have a brilliant idea, and they work on it for a long time, nights and weekends included. There is a slew of problems that arise as a result of this.
- Your progress will be glacial, and someone else will fill the void you’ve found. The rate of technological change is only increasing, and there will be shortages for ever-shrinking time windows.
- No one will take you seriously, including potential investors and clients.
- You will become exhausted from working 24 hours a day, seven days a week, and will finally give up.
I had an idea for a better vacation home rental website, complete with rich listings, instant booking, and user feedback, among other features. I had it for several years prior to Airbnb’s launch, and although I did some part-time work with it, I never pursued it full-time. That’s a $100 billion lack of ambition, at the very least. It’s fine to work part-time for the first few months, but be ready to time-box this period and take the plunge. I’ll discuss how to prepare yourself for this process in a future blog.
Mistake 2: Solving a problem that is both deep and diffuse
We adore the inventions we create and see their enormous potential and possibilities. As exciting as the possibilities are, they can be lethal in terms of consumer acquisition. Although general channels can be created, building traction around them takes a lot of money and time. There are two major advantages to solving a particular problem for a very specific class of user:
You have a clear idea of who your target market is.
You can tailor your product to the specific audience and issue.
For instance, when using Rezolve. AI can help businesses address a variety of issues, but we’re just interested in “Automated Level 1 Support for Employee Service Desk.” “I am developing to solve problem for user,” I suggest as a one-sentence template. Fill in the blanks as precisely as you can.
Mistake 3: Let’s get some more work done before we go live.
Some of the startups I’ve worked with have never debuted – or at least not in a significant way. Before releasing, the founder decided to add a few more features, and he did so in isolation, without any real buyer or user input. My advice is to move as far to the left as possible:
- Make a tiny prototype of your concept (use a clickable tool like Proto.io or Envision)
Grab a cup of coffee (or a Zoom meeting) with someone nice who is close enough to serve a potential customer, and show them your concept while asking three questions:
Is your suggestion a solution to one of the Top 5-10 problems they’re dealing with?
Will they have bought or used it if it had been available today?
Will they be able to foot the bill? (or some other question about gauging price elasticity)
Take the feedback from these sessions, iterate the template, test it again, and then create a basic MVP. Before you continue to build, you should find some real users. It doesn’t matter if they’re trial users or if they’re always eligible. Collaborate with actual users who serve your target audience to form your potential roadmap.
Mistake 4: Is it too early or too late to start raising funds?
There are two extremes to this problem: I’ve seen several founders who are extremely hesitant to raise funds (for fear of too much dilution). I’ve also seen entrepreneurs become preoccupied with money before defining the specifics of their concepts. I suggest that you use the following terms:
If you don’t have any previous experience, come up with some proof points to show your investors (could be a great product plus a pilot customer).
It’s possible that your initial checks will have to come from friends and family; don’t be afraid to go this path.
In a technology startup, speed is crucial, so consider assembling a team that is used to raising money.
Don’t be concerned about dilution – a 10% stake in a $1 billion business is preferable to a 100% stake in a $0. There are many ways to raise while being fair to yourself and to your early investors – I will talk in detail about this topic in a future blog.
Mistake 5: There is no formal Go to Market (GTM) strategy.
Many first-time technology startup founders do not consider sales and marketing until they are far into the game. Aligning your product and target audience with the appropriate Go to Market (GTM) model is critical, and it should be done concurrently with the development of your product, not as an afterthought.
- GTM Model: Do you sell at a price point of $100,00 per year or $100 per year? Your GTM is likely to include enterprise buyers at the first price point, who are mainly sales-driven, analyst-influenced, and so on. At this price point, you can concentrate on Digital Marketing, such as SEO, SEM, Inside Sales, Online Reviews, and Social Virality.
- Time for GTM: As a co-founder, I want to devote 50% of your time to enhancing and expanding your GTM.
- GTM planning: Create a written plan that addresses the following questions.
- Who are you selling to?
- How can they get their hands on what you’re selling?
- How long will the sales period be and how will it be cut short?
- Based on your GTM model, here’s how to grow your top of the funnel.
The argument is that a well-thought-out GTM strategy is nearly as critical as anything else you do with your startup. Don’t dismiss it!
The beginning of an incredible journey begins with the launch of a startup. Avoiding any of the above blunders will help you join the 10% of people who excel, as well as shorten the time it takes to scale to the next level.
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