5 Obvious Mistakes First-Time Founders Make That Sink Their Startup

Long before I ever thought I’d become a professional writer, I was a tech entrepreneur. I founded my first business at fourteen years old, buying and refurbishing broken Macbooks on eBay.¹ I founded my second business when I was fifteen, making apps for autistic children.

Totally by surprise, the tech entrepreneurship community loved it. I was quickly folded into the local and global community of entrepreneurs. In a mere 3 years, I’d won the YWCA Woman to Watch award, the Highlighted Incoming Freshman Award from the Fischer School of Business, received a citation from Governor Kasich, and won the Global High School Entrepreneur competition hosted by the EO.

After a reception like that, everyone expected me to be an entrepreneur for life. Multiple Silicon Valley incubators courted me for my next company idea, and local funds were ready to give me hundreds of thousands in seed funding before I’d even turned 18.

An education in entrepreneurship like that taught me a lot about the kind of mistakes founders make because in their rush to replicate my success, lots of founders made those mistakes right in front of me. They were like neon signs, broadcasting exactly what not to do. These mistakes are:

Spending more time on marketing than on product building and financial health

This mistake is often the very first mistake a new entrepreneur makes. After filing for incorporation as a limited liability company with the state and opening a business bank account, they use that business bank account to buy marketing materials. Business cards, website design services, brochures (who even reads these anymore?), you name it. Anything that makes them feel professional they buy.

There are only 3 marketing materials a brand-new company needs:

1. A URL.
2. A website at said URL that can accept pre-launch list signups (bonus points for Google Analytics and even more bonus points for incentivized referral links).
3. An email provider to email said pre-launch list at least once a month to keep your audience engaged.

That’s it. That’s all you need.

That’s all you need because the only thing an early-stage startup should be focusing on is building a great product.

Across all industries and time periods, great products have a way of selling themselves. Nobody needs to be convinced to buy a smartphone.² If your product is good enough and your marketing meets the minimum threshold above, excited early adopters will evangelize your product for others on your behalf.

I saw this with both Pufferfish and with my online writing. Neither venture received much marketing effort, and both lines of business practically sell themselves. Contrast this to my numerous failed ventures, each of which was characterized by me spending most of my working time on marketing.

Marketing has a great ROI for products which already excite customers. Marketing can turn a great underground product into a mainstream product. Marketing can not make a bad product popular. All marketing can do for a bad product is to burn up its budget.

If your early-stage startup is struggling and you don’t know why, slash your marketing budget and focus on product development. Loyal customers will guide you to a better product without having to spend thousands on ad campaigns.

Asking people for coffee and to “Pick their brain” as a way to avoid putting in work

I cannot count how many times I’ve been asked over the course of my life to “get coffee with” someone so they may “pick my brain.” And every time I’ve ever done it, it’s been a huge waste of time.

Oh, the people asking me for these things look serious. They sound serious, too. They even have business cards. But when it comes down to it, going to get coffee with them doesn’t help their startup grow, and it doesn’t help me either. It is a waste for both of us.

As I wrote in Work Less, Finish More: How to Spend Less Time Working and Get More Done³:

You may feel that going to get coffee with people is an important way of “giving back.” But after ten years of people trying to “pick my brain” over coffee, the disappointing thing I’ve learned is 95% of the people who ask you for advice will do nothing with it.

They will happily spend three hours of your valuable time asking you question after question and studiously taking notes and then do nothing with the information. Ever. Five years down the line, they’ll still be exactly where they were, still dreaming their dream.

And the remaining 5%? They don’t need you to get coffee with them. They’re proficient at using Google, YouTube, Medium, and paid coursework to teach them what they know. All they need is for you to point them in the right direction and warn them about common mistakes before they make them, which you can usually do via email.

The longer I work in entrepreneurial spaces, the more I see this pattern play out. The successful people are not the ones who ask me to coffee, nor are they the ones who are at every networking event. They are the ones who build great products. They build great apps, or they write amazing content, or they do whatever it is they do the best. When you do that, the pros find you.

Case in point: I barely ever marketed Pufferfish Software, ever, yet we still wound up receiving global attention. Admittedly, most of that was generated by the fact that the founder was still attending high school, but I promise you, that would have never been newsworthy if our product was garbage. I’ve met many entrepreneurs since who would be newsworthy if only their products were good.

Here is an incomplete list of things you can do that are more helpful than going for coffee with someone:

1. Emailing a pro and asking them for some book/course recommendations. Read and take everything they recommend and get back to them. They will like and help you a lot more once you’ve proven yourself this way.
2. Get on Google and search on the question you have. Chances are somewhere north of a million people have already answered that question in much greater detail than anyone ever could over coffee.

Next time you feel an urge to request a meeting or Zoom call with someone you admire, send them a quick note and ask for a book recommendation instead. You’ll learn a lot more, and they’ll be a lot more impressed with you once they see you’ve read it.

Focusing on “Relationship-building” with an agenda

Nothing screams novice entrepreneur more than a cold approach at a networking event by someone in a suit jacket wielding a business card with primary colors talking about “opportunities for our companies to collaborate.”

At networking events, there are two groups of people:

1. People canvassing the room with a clear agenda
2. People who are there to have a good time and learn some stuff

Everyone starts as a member of the first group. We graduate out of the first group and into the second when we realize the purpose of a networking event is not to get a handshake deal but merely to make friends with other people who happen to do the same thing as you and see where it goes.

Sometimes these turn into business opportunities, but most of the time, they turn into nothing more than satisfying friends. These friendships reap much of the same benefits as any other kind of friendship: mutual understanding, camaraderie, mutual support of each other’s goals, so on and so forth. They can power compelling business opportunities, but they don’t exist for the sake of your business.

Case in point: After becoming a moderately successful Medium writer, I was invited to join a Slack group with other successful Medium writers. (Remember, I said the pros find you.) Obviously, being a part of this Slack group has immense career value. I can leverage these connections to reach out to publishers, major news outlets, you name it. But this group doesn’t exist for us to use each other. It exists for us to hang out, and that’s what we do. We discuss Medium as a platform, we share relatable memes, and we have a good time. Sometimes valuable opportunities and partnerships emerge organically, but none of us are there to seek them out, and that’s what makes the community so great.

The thing about collaboration is that worthwhile collaboration tends to happen naturally. It happens naturally because both parties see the mutual value without someone having to sell them on it over a standing table in a conference hall. Nobody in our writer’s group sells anything to anyone, but we often work together and produce better work because of it.

Don’t be someone who shows up to community events with an agenda and kills the atmosphere. Be someone who shows up to do nothing more than get to know others in their field and contribute to everyone’s success equally.

Contributing to online social media and content platforms purely to funnel traffic to your startup’s website

We all know what this mistake looks like from the other side. When we’re browsing social media, or Reddit, or Medium, and we come across a post that was clearly crafted to sell more products, we sniff out the sales tactic faster than a dog smells piss.

But for some reason, that instinct doesn’t work in reverse. We can always tell when someone’s posting something to drive clicks or sales, but we can never tell if what we’re posting comes across the same way. That’s why the internet is full of self-interested posts.

Reddit has a reputation among entrepreneurs as being a very negative place. Founders often get flamed out for making a post either about their startup or about something else designed to pique a reader’s interest in their startup. The burned founders abandon Reddit as a marketing strategy. But frankly, these founders deserve to get flamed out.

I would know because I was one of them. For each of those pointless ventures of mine, I made dozens of marketing posts. Sometimes these posts were nothing more than “hey, look at what I made,” and sometimes, they were poorly-written blog articles that mentioned what I made several times in a row. They all got flamed out, and they deserved it.

Content marketing is a powerful strategy, but only when your reader can tell there isn’t an agenda. Many companies like Hubspot and QuickSprout built their business on the back of content marketing. They were able to do so, though, because they wrote articles that were super informative for the reader and free from any agenda.

The benchmark for an agenda is this: Does your content make sense without mentioning your company? Would your content make sense if all references to your product were removed?

Most importantly: Would your content be worth reading if all references were removed? Would the reader really walk away with a better life? Or would they just have wasted their time?

It takes some practice to identify whether your content is spammy content marketing or a meaningful contribution to the world. After posting content, look at your engagement and comments section. If engagement is nonexistent or you get flamed in the comments, chances are you’ve made spam.

Keep practicing until what you craft isn’t spam anymore, and the world will be yours.

Thinking “To make money, you must spend money” means “Every business purchase is justified”

There are so many early-stage startups aiming to be high-growth companies that spend a king’s ransom on bottom-line costs, only to run out of runway eight months later. Then the founder looks back, grief-stricken, and cried, “What went wrong?!”

You bought your own bullshit. That’s what wrong.

Here is a list of non-essential costs for a startup that many early-stage startups have:

1. Expensive flights and hotels. Instead of booking using money-saving tools and booking economy and connecting flights, founders book first-class direct flights. Instead of getting an Airbnb down the road, founders think they must have a hotel room in the same hotel as the conference itself. They do this because “their time is valuable.” So valuable you’re going to burn runway for it?
2. Pointless marketing costs (see above). No, you don’t need a thirty-foot screen printed banner for your company party.
3. Expensive technology. Vendors of the technology market make their money on customers who don’t know what they’re doing when they sign expensive vendor contracts. I’ve met many entrepreneurs with <10 employees who could save hundreds or thousands a month alone just by migrating service providers.
4. Luxurious offices. Quality employees will not choose your startup over other startups because you have $300 glass desks, $200 gaming chairs, and beer on tap in the kitchen with granite countertops. There is a startup in my city with the best amenities of any startup in the region but the worst employee retention rates. Save on bottom-line costs by renting an office with old carpet and linoleum kitchens and funnel the savings into making a company that’s incredibly great to work for despite being lit by fluorescents.

These things are all fluff. They are like buying designer shoes and premium leather briefcases. They make you feel great for a few weeks, but then hedonic adaptation kicks in, and all they do after that is suck money out of your bank account every month.

Take a hard look at your bottom line costs. Scrutinize everything from the company drink policy to the shine on your shoes. What costs actually have a meaningful effect on your profit, and what costs are just there to make you feel good? Double down on what actually turns a profit and invest in some therapy for your feelings, not legroom on your direct flight.

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Most of what I’ve attacked in this article is what people think it means to be an entrepreneur: printing business cards and attending networking events, flying around hosting booths at conferences, and giving all of your employees' beer on tap.

Being an entrepreneur is not any of this flashy stuff. It’s not beanbag chairs in the meeting rooms and travel dinners on the company card. It’s not making handshake deals at networking events that will invariably fall apart, and it’s not marketing campaigns and getting coffee. It’s building a product that makes people’s lives better and nothing else.

Not to invoke Elon Musk in an entrepreneurship article, but this is why Elon Musk slept on couches and showered at the YMCA. He didn’t care about being a founder. He cared about what he founded. While everyone else screamed fire and disaster, he kept his eye on his product, and his company reaped the reward.

People make these mistakes because they think entrepreneurship means money, travel, fame, and fortune. These things can happen, but at its core, entrepreneurship is nothing more than building a product for customers.

The best thing you can do for your startup is to get clear on what it means to be an entrepreneur. Ditch the myths and focus on the truth. Your company will flourish — and so will you.

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1: Back when Macbooks were user-serviceable, of course. The invention of the unibody Macbook destroyed that line of business in one fell swoop.

2: People do need to be convinced to buy smartphone A over smartphone B, but we certainly don’t need to be convinced to buy a smartphone at all. The product sells itself.

3: This is an affiliate link.