What do startup founders typically get wrong when starting a business?

One could write a hundred+ points, but really it comes down to the basics. It’s such a boring answer, but getting the basics right matters. Everything else doesn’t if the fundamentals aren’t there.

What are the boring fundamentals?

  • Timing: The time has to be right. The research was done on this but I want to keep answers brief so they are internalized.
  • Unit economics: Do you make more than it costs to acquire a user?
  • Team: Yeah, that thing. Who is executing? Your startup is your people. Nothing else matters if your team sucks
  • Market size: The market ALWAYS wins. 100% of a $1m market is $1m.
  • Problem: Are you actually solving a real problem, or have you developed tech chasing a problem you hope to find…?
  • Real solution: You need to be better and ideally 10x better. In an established market, and the incremental offer is not an incentive to change.
  • Defensibility: Are you actually building a moat for long term gains? Without ‘special sauce’ you are not going to generate supernormal profits in economics terms.

Ok, a couple of things founders get wrong:

  • Idea: They think the idea is valuable. It’s not. Execution is.
  • VC as a business model: VC is for growth not paying rent. VC exacerbates issues, not solves them
  • No runway: They don’t save up enough. You need at least 12 months and ideally 24. Yes, that sucks and is a big risk, but you’re a founder not VC charity, right?
  • Talking: going to events and general startup masturbation. All that matters is starting and doing
  • Not starting soon enough and over developing: You need to launch to learn
  • Lack of focus: Try do too many things rather than one thing done, shipped and well
  • Expansion: Want to expand without winning the home market and getting distracted
  • Team: Co-founders are people they met at an event. Don’t spend around 30–50% of their time hiring. Hiring sucks but it’s key

I can go on and on, but focus on the boring basics.

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