High-Impact Entrepreneurship

10 ways young entrepreneurs fail

Reprinted from under30ceo.com. See original post here.

By Jared O’Toole

I had a conversation awhile back with a young entrepreneur that frustrated me beyond belief. It went something like this…

“I’m looking for some advice on this amazing idea I have but I can’t tell you anything about it. All I can say is we will be competing with sites like eBay and when this idea gets out everybody is going to try and take it. I mean seriously its amazing and there is nothing like it out there where it’s a win, win, win for everyone involved. We’re projected to do about a quarter of eBay’s business in 2 years and eventually make them irrelevant. We will be launching in 6 months and I mean it will be a no brainer for people to use it. I just can’t tell you anything about it.” – Extremely excited young entrepreneur

Now I’m not saying this kid doesn’t have a brilliant idea or he isn’t the next Mark Zuckerberg but a conversation like this sets off a million alerts in my head. I’ve seen it all before and while it’s passionate, it’s a mindset that sets you up to fall off a cliff. Here are 10 things that go off in my head when I have a conversation like that.

1. Being super secret

You may think you have the greatest idea in the world and if you even give a single hint at what it is everyone is going to steal it. The reality is that no one cares about your idea until it makes a million dollars. Odds are most people won’t have you vision or understand why your solution is that much better than what’s already out there.

Now there may be certain parts of your idea that make it special but that doesn’t mean you have to give it all away. You have to be able to get feedback, advice and thoughts from your potential customers but that doesn’t mean showing them the nuts & bolts of your algorithms. You will do a lot more good than harm by letting people in rather than blocking the entire world out.

2. All knowing

Every young business owner makes the mistake that they have all the answers and knows more than mentors or even their customers. No one else has this great idea or has done it before so how can they be able to help?

The best thing you can do when starting out is seek all the advice possible. Even if its not directly about your business you need to learn about the industry, the leaders and everything you can about the business world. You have to be learning everyday to succeed in business.

3. Dreaming of a billion before $1

Who doesn’t have a billion dollar idea? Ask any group of first time business owners and you will have multiple people proclaim their company will do just a billion dollars or so in the near future. Many of them will make claims of being the next Facebook, eBay, Amazon and so on.

Now it’s important to dream big because its those dreams that get you through those long nights and days of work before you ever see a dime. Just understand you have a long way to go before a billion, million or even a salary that supports you should be mentioned. Where, when, and how is that first dollar being made?

4. Failure to launch

So you have been working on this great idea for the past year? Where is it? Why can’t I use it? So many ideas, good ones, never get used by anyone because they simply don’t launch. That doesn’t mean they couldn’t launch, it means the founder wouldn’t launch it because something wasn’t right.

You have to launch! Your idea never stands a chance if it doesn’t go live. Drop the features, stop working on that last piece you can’t figure out and get it out there. Facebook, Google, eBay, Amazon all worked and looked different when they went live. They adapted, learned from users, and kept tweaking things to become billion dollar companies.

5. Lack of focus

Ever have one big idea lead to a million others? There is always another feature, side project or even company that gets thought up once you start building something and getting into the industry. Then all of a sudden a simple problem that you found a solution to has multiple solutions with different feature sets and targets.

This goes back to point #4 where the main idea that may have been simple and good fails to launch because so many side things pop up. Write down those ideas and put that paper in a folder while you get the main piece up and running. Focus on that problem you saw and the solution you had and execute.

6. Building what you want rather than what customers want

As I said earlier young entrepreneurs tend to be secretive and think they know everything. This leads to another problem where they focus on building what they think people want rather than listening and building what people ask for. This wastes time as features are built that end up being scraped when reality hits and the customer isn’t interested in it.

If you remember the early days of Facebook it was as simple as sites come. You could have a profile, some info and add friends. They then listened and added the ability to upload and share media like pictures which is by far the most popular aspect of the site. Building that feature to start not only would have delayed launching Facebook but odds are it would not have worked smoothly or other features would have been built that wouldn’t end up as popular. Launch and listen.

7. Thinking anyone will care about the idea

Everyone expects a huge celebration with tons of sales, press and attention when they launch. So what happens when all you hear is silence? At the end of the day no one cares about your idea until you give them a reason to. Consumers have thousands of options and more pop up everyday.

This is no fault of your idea or anything you have done. This is just a fact of starting a business. Now that you’re up and running the real game starts and you have to go out and push until people listen. You have to show them one by one why they should and need to care about what you’re doing. Don’t expect a party but don’t get down on yourself. Just get to work.

8. Financial projections

Going back to #3 I see so many young entrepreneurs end up so far off with any realistic financial projections. Remember trying to make that first dollar? Well, honestly when will that happen? When are you even planning on launching so you have a chance to make money? Don’t forget to add 6 months to that date.

So look at your finances and figure out how long can you really survive with little to no money. What happens if things get delayed by 6 months or even a year? Will you survive when you hit roadblocks that will inevitably come on the road to building a profitable company? You have to be realistic and prepare to be broke for years at first, even with a billion dollar idea.

9. I need funding now or I cant do a a thing

So many young entrepreneurs are waiting for someone else to pay them so they can build their dream. No in reality you need to put in some hard work! Bootstrap. Find ways to make it happen. Do whatever it takes to bring something to market. Remember #4, it doesn’t have to be and won’t be perfect. Make a sale, get some users, proove a person actually might use your service or product.

Once you do those things you may realize you don’t have to give up %40 of your company to a VC or if you do you will find the money easier to get and with a better deal. Don’t put your companies success on someone else’s checkbook.

10. Giving up at first sign of trouble

So after you realize how hard it is to start your own business you give up?! Everyone hits walls and it doesn’t mean its a bad idea or you’re not cut out for this. Understand the walls will come and it happens to everyone, you’re not alone. There are no overnight successes so don’t be surprised when you’re not either. The winners push through, the losers, well we never hear about them…

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