Mistakes

This can often be confused with raising little money. If you do run out of money it can be either of the two mistakes – you raised too little, or you blew through it too fast. You can often distinguish between the two simply by looking at the amount you raised. If you raised a large amount of money and still ran out of it – you have a spending problem.

This problem seems to be dwindling in new age startups. The basic costs to set up a company have been getting cheaper by the day. HOWEVER, the cost of human resources is always high. There are many areas such as HR where startups can tend to get carried away. It is here that you need to be extra cautious.

Hire only the people you need and don’t underestimate your balances.

This can often be confused with raising little money. If you do run out of money it can be either of the two mistakes – you raised too little, or you blew through it too fast. You can often distinguish between the two simply by looking at the amount you raised. If you raised a large amount of money and still ran out of it – you have a spending problem.

This problem seems to be dwindling in new age startups. The basic costs to set up a company have been getting cheaper by the day. HOWEVER, the cost of human resources is always high. There are many areas such as HR where startups can tend to get carried away. It is here that you need to be extra cautious.

Hire only the people you need and don’t underestimate your balances.

Its important to be able to manage your relationship with your investors. When you get funded, the fact of life is – they’re your bosses. But there should be a line drawn defining who takes care of what. It is good to keep your investors informed and in the loop. Ignoring them will not get you to goo places. But simultaneously – you cannot let them run your company. If they could, they should have started one of their own.

Be smart at keep the business building to yourself, and keeping the investors happy in their own way. Your focus should be your product. Do not waste time disputing the little nothings with the investors. These problems are directly proportionate to the amount your raise. Like mentioned in the #13 – the more money you raise, the more accountable you are.

Your focus as a startup should be on generating users and not a profit. This doesn’t mean you ignore the financial side of things – but only that you keep it for later.

Startups often get hung up on trying to make money. What they fail to see is that the simplest way to do this is, by solving a problem. It sounds pretty easy, but oddly, there are only a few startups that actually succeed in figuring out what it is that people WANT really. The moment you have this covered, you can then focus on the business model. Keep the profit making discussion for later.

Paul Grahams simple ideology should be taken into consideration here.

How To Create Wealth = (How Much People Want Something  X  How Many People Want It)  – Now turn that number into wealth. Companies that put their users first, tend to do better. The happier the users, the happier your sales, and the happier are you.