Top 5 Most Common Startup Mistakes: I Don't Need Money, Everything Is Going To Be Ok, Eventually
I might be heavily biased towards this one, because it's the root cause of a recent fail, a heavily underfunded project I just stopped a couple of months ago. It's also the most delicate one, because it sits on a very tight line between freedom of choice and the pressure of investors which are, generally speaking, driven only by profit. On this very tight line you have to choose just the right amount of money for your business to function, and to give away for that just the right amount of ownership.
It's a tough choice and many entrepreneurs - me included - are trying to replace this capital infusion with hard work. It's called "bootstrapping" and, generally speaking again, it's a safe strategy. But it doesn't apply in all types of business. It doesn't apply in retail, for instance, where you need to pay upfront for goods, or in heavy R&D processes. You just need money to pay for that stuff.
The bottom line is that every business needs money. It's the blood that flows in its veins. No matter how well intended you are, how big the contribution you bring to the world, at the end of the month you have to pay salaries, taxes, suppliers. That's the world we live in and we have to adapt, if we want to survive, yet alone to thrive.
How to navigate this unpredictable sea?
Stay informed. Not only about your own needs, like cash flow, but also about potential investors. Keep an eye on them, try to assess their behavior, their average investment size, their likes and dislikes. Many times, when you enter a business partnership, it will consume more time than your marriage, so you can at least do your homework.
Be flexible. You're all in the same boat. At the end of the day, all human beings are targeting only one KPI: their own happiness. Maybe there are tensions, maybe there are some rough times every now and then, but keep in mind these times won't last forever.
And, most of all, don't get too attached. I remember I did this mistake with my first business. I had a lot of ins and outs with my partners at the time, because "I put all my time and effort in this baby, it's mine". Relax. It's not yours. Nothing is really yours so no need to get too clingy. Be ready to get out if you run out of options. There's still time. You will start something new.
So, that was the last article in this mini-series. If you want to see the other 4 posts, here are the links:
- Top 5 Most Common Startup Mistakes: "This Thing Really Helped Me, So We Have A Business" - The One Client Startup
- Top 5 Most Common Startup Mistakes: Let’s Build 1746 Features in the First Alpha, They’ll Be Hooked
- Top 5 Most Common Startup Mistakes: Nobody Did This Before, So I Must Be A Genius
- Top 5 Most Common Startup Mistakes: It's Gonna Work Out Because I Know It Will
image source - Pixabay
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
So true! Hard work may contribute, but is not sufficient for success. Money is the key, and thus investors. This also works with fundamental science for the moment (looking for funding is nothing but looking for investors).
I hear you :)
Oh? Do you want to invest in my researches? :)
I would. If I could :) I was just being sympathetic.
ahah :)
I'm sorry I missed this when it was published.
As an aside, I really would like to see Steemit develop more away from "attention-based" towards its inherent "permanent because I'm on the blockchain" durability. These excellent articles and series that you write need to be a permanently indexed resource for the long-term and for your growing readership.
Now, about your fine article; I had to look up KPI (Key Performance Indicator) but found that instructive.
I've long been of the "bootstrap" mindset, and have sometimes come quite close to achieving that. I still remember the day the "light bulb" went on and I finally understood the need for capital. I should write about that one day.
Thank you for this, now completed, excellent series! 😄😇😄
Glad you found value in these articles :)
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