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9 Common Mistakes made by Start-ups and how you can avoid them?

December 30, 2021

The journey of building a start-up is full of bumpy roads.

It involves a lot of setbacks, rejections, doubts, failures, learnings to at last reach the sweet success.

A report suggests that India is the third-largest start-up ecosystem in the world after the US and China.

But recent IBM institute study reveals that 90% of the Indian Startups fail within 5 years of their establishment.

Every start-up has to fight many battles to survive. But there are many lessons an entrepreneur can learn from peers’ mistakes to concrete the chances of success.

So, here we are with a list of the 9 biggest mistakes that start-ups make, and how they can be avoided to ensure success.

Startup Common Mistakes

1. No business plan in place

Most start-ups spend their time and money creating applications to build a business – in a bid to quickly find the next big thing. Growing into a successful start-up business is not just about having capital, resources, strategies, and workflows; it is also about understanding:

The company’s target market

Customer acquisition

Value proposition

Marketing plan

Competitor analysis

Business model


If you are a start-up, make sure you pay heed to these factors.  Check out this article for the in-depth process of creating a start-up business plan.

2. You don’t solve a substantial problem

With so many products and services already in the market, your start-up should solve the real problem of your target audience.

Otherwise, chances are your target audience is loyal towards a product and they are least interested in some new version of existing products/services with no value.

Not just customers, attracting investors, talents and scaling the business will also become a challenge in absence of a solid value proposition.

Target Audience for Startup

3. No clarity on the target audience

If you are selling to everyone, you are selling to no one.  And, this is the biggest mistake that startups make. Customers are overwhelmed with so many ads subjected to them. So, now customers have become smarter and what they need today is the solution that understands them and solves their specific problems.  And indeed, if you can’t connect with your customer, you will miss out on the selling opportunity. That’s why a detailed customer persona is helpful for your business to create a personalized message for your ideal audience. Customer persona or buyer persona, as we know it, is a fictional representation of your ideal customer.  To build a buyer persona you need to go in-depth and understand your customer’s:

demographics (age, gender, income, education background, etc),

Goals and challenges, activities

How your product/service can be helpful to them.

4. Lack of flexibility to Pivot

In the initial few years of a start-up, you learn to improve your product or service basis market response and customer’s expectations.

Sometimes there is more you can deliver on your core product or at times you may feel that improvising will do much better for your business.

A drastic fundamental change called Pivot is needed in order to survive and grow your customer base.  

Every start-up should be flexible enough to pivot if needed. A start-up should learn to understand what pivot means, when they need to pivot and how?

Contrary to what most start-ups think– Pivoting is not equivalent to downfall.

Just to give you a perspective, current market gorillas like YouTube, Instagram, Twitter – choose to pivot as a start-up as they found a better way to grow and reach a wider audience.

5. Prefer to run a one-man show

It’s the typical start-up mistake to think that business is a one-man or a woman show.

While the idea of being an all-rounder is pleasing, it can keep a start-up entrepreneur away from other important aspects that might need time and attention.

You need expert guidance, visionary mentors, talented resources to delegate, and self-learning along the way to build a successful start-up.

With delegation, you can have time for other important aspects and your business can run smoothly even in your absence.

6. Rapid Team Expansion

It is a bit in contrast to what we just talked about in the last point.

Soon after receiving the hefty funding, startup early mistakes include ramping up their hiring efforts. They want to grow in numbers to boost the revenue.

Start-ups begin the recruitment drive with a lower standard of the screening process.

As a result of it, sometimes the employees hired don’t meet the expectation, or the worst- they don’t help your company grow.

You expect them to bring value to the table but instead, they begin to affect your start-up environment.

So, it is important to spearhead talent, hire wisely, introduce common pieces of training to make it easy for new joiners to understand your work culture and your expectations.

7. Dipping Sales Revenue

Over time, there is a drastic behavioral change in your customers. And, it reflects in the demand and expectations from your product. Your customers have been voicing it to you in the form of your plunging sales numbers.  Question is – are you reading the hint or not? Your dipping sales number could be a clear indication of the following potential concerns:

Your value proposition is not unique or clear.

There are flaws in the customer reach-out efforts.

The sales and marketing team is not working hand-in-hand.

You have a demotivated or untrained sales team.

Competitors have better offerings and they are eating up your sales.

Take a hint and plan the corrective measure without much delay.

8. Poor Marketing Plan

“We have an excellent product; we don’t need much marketing”- Do you also have this mindset?

Let us make you think otherwise.

Your competitors out there are making the most of the marketing tools such as ads, videos, content marketing, and whatnot; while you are resorting to the only word of mouth or organic traffic.

Not a good idea.

So, you need to start engaging with existing customers and ramp up efforts to attract new customers.

Chart out your marketing strategy, build your social media presence, start a blog, use keyword-targeted paid ads, and send emails to base your buyers’ journey.

Marketing Plan for Startup

9. Not investing in mentorship

The right mentors can change the whole game for your start-up. With their extensive work experience, mentors can help you stay grounded, give timely reality checks so that you don’t get over absorbed in your idea and miss out on other crucial aspects. In addition, a mentor can help you grow in the following ways:

Advice on upcoming challenges and help find solutions

Plan growth strategy

Introduce you to good investors

Bring credibility to your brand

Bottom Line

Entrepreneurs start a new business with the best of intentions and intend to solve a bigger problem.

Errors tend to happen in start-ups. They may start small, but they often lead to a lot of damage.

But before long, the business could already be heading toward failure if the founders act in their strengths and weaknesses.

With this list of common mistakes made by entrepreneurs, we hope you got an idea of what aspects you should pay attention to, and why.

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