This sponsored post is produced by Desk.com.
You have to be a special kind of crazy to start your own company. According to Bloomberg, eight out of ten new businesses fail in the first 18 months. That’s nuts! But seasoned veterans will tell you that it doesn’t have to be that bad. At Desk.com, we talk to many small and fast-growing businesses about the challenges they face. We’ve found that there are a few common mistakes entrepreneurs make again and again. You can dramatically improve your chances for success if you avoid these five traps:
1. Founding a company alone
Most entrepreneurs are used to taking the “path not chosen” and finding a non-traditional route to success. They’re used to depending on themselves and going it alone. That doesn’t mean, though, that they should start a company on their own. It pays to have a strong co-founder. Especially one that can balance your skill set. If you are a great marketer, choose someone who’s a whiz with technology. Not only will having a range of skills help you get to market faster, it will also make your company more attractive to investors.
Also, let’s be frank. Founding a company can be an emotional rollercoaster. Sharing the ups and downs of securing funding and getting a product out the door with another person can help you maintain the upbeat attitude that you need to succeed.
2. Compromising on talent
Finding someone who believes in your vision enough to join a fledgling company without a proven track record or financial resources can be difficult. At times it might seem almost impossible. But just because someone is available and willing to work for free doesn’t mean you should hire them. Having the right people is critical to a young company’s success. There aren’t other employees to form a safety net. Your people need to be super-smart, hardworking, and ready to pick up a shovel and jump in. One weak link can take your whole company down. Even if you have to offer more equity than you’d like, don’t settle for less than perfect.
3. Choosing the wrong board
It’s not just your management team that needs to be chosen carefully. You also need to put a lot thought into who’s on your board. To really be successful you need more than just people who have a financial interest in your company. You need board members with deep subject matter expertise who can advise you on difficult decisions. It’s also very helpful to have board members with a broad network that they will tap to help you with business development and fundraising. And it probably goes without saying: it’s best to have board members you get along well with.
4. Not raising enough money (or spending too much)
Raising money is one of the most difficult parts of an entrepreneur’s job. It certainly doesn’t grow on trees, and investors are reluctant to part with it unless they think they’ll get a good return. To start, it’s not easy to figure out how much you need. And whatever you estimate it’s going to take, that’s probably not enough. But if you’re constantly pounding the pavement looking for more capital, you can’t put in the time you need to launch your product and get your company off the ground. Raise as much money as you can at the beginning, then constantly recalibrate to be sure you aren’t going to run out. You also need to be ruthless about how you spend it (maybe wait a little bit before buying that ping pong table) so you have a better chance of reaching your milestones before your checking account dries up.
5. Lack of customer focus
There’s a lot of talk these days about customer focus, but you need to walk the talk from day one. Think of your customer as a virtual member of your product and operations teams. You need to build the user’s voice into your planning and execution. Make sure you have a feedback loop built into your processes so that you have a way to solicit their input and make sure that you are building the products they want and helping them the way that they want to be helped. It’s also critical that you have a plan for customer service and a help desk solution (like Desk.com) in place from day one.
Leyla Seka is SVP and GM of Desk.com.
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