10 Common Mistakes to Avoid When Starting an Online Business

Starting an online business? Enhance your shot at success, try and avoid these 10 common business s...

Starting an online business? Enhance your shot at success, try and avoid these 10 common business startup mistakes when starting an online business.

Mistakes made can be our greatest teacher, so the best startup advice comes from the first-hand knowledge of what not to do. We spoke to some business owners who shared their hard-earned experience and the insight they gained from their own lapses in judgment.

10 Common Mistakes to Avoid When Starting an Online Business
If you’re looking to get your business off the ground, consider these following pitfalls.

The 10 What Not To Do’s When Starting Your New Business


Single Founder

Have you ever noticed how few successful business startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more. It seems unlikely this is a coincidence.

What's wrong with having one founder? To start with, it's a vote of no confidence. It probably means the founder couldn't talk any of his friends into starting the company with him. That's pretty alarming, because his friends are the ones who know him best.

But even if the founder's friends were all wrong and the company is a good bet, he's still at a disadvantage. Starting a business startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

The last one might be the most important. The low points in a startup are so low that few could bear them alone. When you have multiple founders, esprit de corps binds them together in a way that seems to violate conservation laws. Each thinks "I can't let my friends down." This is one of the most powerful forces in human nature, and it's missing when there's just one founder.

Not Anticipating Your Customers’ Potential Needs

If you decided to open up a cake business, did you even consider that a good number of your future customers will also need to have the goods delivered to them as well?

Many businesses entail additional needs aside from their core product or service. If you can’t provide this yourself, coordinate with a third party to make your respective services a seamless package for your clients.
Taking the time to plan ahead will add to customer satisfaction and avoid headaches before they happen.

Not Having A Unique Selling Point

Surprisingly, an alarming number of new business owners ignore this piece of business startup advice. Everything starts with a vague idea, but you won’t get far if you haven’t refined exactly what you want your business to do.
To help you with this, think of the top three problems that your product or service solves. Being very specific about these fundamental goals adds clarity to your business goals and focuses your limited resources in the right direction.

Starting Without An Online Presence

This one here could be the #1 business startup mistake moving forward in the future of business. Nearly every company out there nowadays have some sort of an online presence whether it be a Facebook page, Twitter account, website or domain name & e-mail. If you have none of the before mentioned then you have made it incredibly hard to be found by the rest of the world.

We are in the age of silicon business, where most people shop online, google for company contacts and e-mail instead of picking up the phone. If you have not even considered being part of the online world, you will be left behind as most competition understands that the eye balls have shifted from hard copy Yellow Pages to search engines and mobile internet access.

Even if you have drummed up enough interest in your startup, you also need to be prepared when word gets around and people beyond your network start looking you up online.

Confusing “blog” with “business”


Repeat after me: a blog isn’t a business. A blog isn’t a business.
A blog is an incredible platform for sharing your ideas, connecting with people and growing an audience. The same is true of podcasting, YouTubing, or any other place you might publish content for free.

Giving away free content isn’t a business. It’s a tool for building influence. Don’t count on turning that influence into sponsorship's or advertising dollars. You’ll need a more direct plan for earning an income if you want your blog or podcast to pay off. But You could turn your blog into a business startup place and make money from your blog.

Not worrying about money

Be optimistic -- just not about money. “There’s a very good chance that your company will run out of money before it makes any,” cautions Tobak. “Know how much cash you’ve got to run your startup business, what your burn rate is and make sure that you have a plan to try to get more before you run out.”
Too often business owners scramble to raise funds when it’s already too late. Instead, founders from the get-go should create a financial plan, detailing milestones and how much money it will take to reach these goals.

Not worrying about money

Be optimistic -- just not about money. “There’s a very good chance that your company will run out of money before it makes any,” cautions Tobak. “Know how much cash you’ve got to run your business, what your burn rate is and make sure that you have a plan to try to get more before you run out.”
Too often business owners scramble to raise funds when it’s already too late. Instead, founders from the get-go should create a financial plan, detailing milestones and how much money it will take to reach these goals.

Going it alone


The only reason my business exists today is because other entrepreneur friends wouldn’t let me quit. Seriously, I tried to throw in the towel and start over with something else, but they wouldn’t let me. They talked me out of it.
No one can succeed in business alone. You need people to make it work. Your customers are people, your suppliers are people, your service providers are people.

Most importantly, you need support from other entrepreneurs who are at similar stages as you are, and from others with more experience.
The more connected you become with other entrepreneurs, the more normal your quest becomes. You’ll no longer feel crazy or alone, and you’ll realize that we all face obstacles just like you’re facing.

The entrepreneurs who talked me out of quitting were part of a little group that met weekly to hold each other accountable. It didn’t cost any of us a thing, other than an hour of our time each week, but it turned out to be the most valuable resource I ever used in my business.

Reach out to another entrepreneur or two, and ask them to meet weekly. Share your struggles and goals, and review your progress each week. This simple process is so powerful.

Choosing the Wrong Platform

A related problem (since it tends to be done by bad programmers) is choosing the wrong platform. For example, I think a lot of startups during the Bubble killed themselves by deciding to build server-based applications on Windows. Hotmail was still running on FreeBSD for years after Microsoft bought it, presumably because Windows couldn't handle the load. If Hotmail's founders had chosen to use Windows, they would have been swamped.

PayPal only just dodged this bullet. After they merged with X.com, the new CEO wanted to switch to Windows—even after PayPal cofounder Max Levchin showed that their software scaled only 1% as well on Windows as Unix. Fortunately for PayPal they switched CEOs instead.

Platform is a vague word. It could mean an operating system, or a programming language, or a "framework" built on top of a programming language. It implies something that both supports and limits, like the foundation of a house.

The scary thing about platforms is that there are always some that seem to outsiders to be fine, responsible choices and yet, like Windows in the 90s, will destroy you if you choose them. Java applets were probably the most spectacular example. This was supposed to be the new way of delivering applications. Presumably it killed just about 100% of the startups who believed that.

How do you pick the right platforms? The usual way is to hire good programmers and let them choose. But there is a trick you could use if you're not a programmer: visit a top computer science department and see what they use in research projects.

Fights Between Founders

Fights between founders are surprisingly common. About 20% of the startups we've funded have had a founder leave. It happens so often that we've reversed our attitude to vesting. We still don't require it, but now we advise founders to vest so there will be an orderly way for people to quit.

A founder leaving doesn't necessarily kill a startup, though. Plenty of successful startups have had that happen. Fortunately it's usually the least committed founder who leaves. If there are three founders and one who was lukewarm leaves, big deal. If you have two and one leaves, or a guy with critical technical skills leaves, that's more of a problem. But even that is survivable. Blogger got down to one person, and they bounced back.

Most of the disputes I've seen between founders could have been avoided if they'd been more careful about who they started a company with. Most disputes are not due to the situation but the people. Which means they're inevitable. And most founders who've been burned by such disputes probably had misgivings, which they suppressed, when they started the company. Don't suppress misgivings. It's much easier to fix problems before the company is started than after. So don't include your housemate in your startup because he'd feel left out otherwise. Don't start a company with someone you dislike because they have some skill you need and you worry you won't find anyone else. The people are the most important ingredient in a startup, so don't compromise there. 

Notes

This is not a complete list of the causes of failure, just those you can control. There are also several you can't, notably ineptitude and bad luck. You should take more than you think you'll need, maybe 50% to 100% more, because software takes longer to write and deals longer to close than you expect.

Many more than most people realize, because companies don't advertise this. Did you know Apple originally had three founders?

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