What should an entrepreneur assume when starting a new business? That they’ll make a lot of mistakes. Making countless decisions every day and taking risks means that everyone slips up sometimes.
Knowing this, it doesn’t come as a surprise that entrepreneurs had many stories to share with us about business mistakes they made. Most of them are common mistakes that most people make when developing their company. It shows that no one knows everything at the beginning, and creating a business is a journey that constantly provides learning opportunities. That is especially true in this ever-changing world.
Enjoy the read, or choose the one mistake you’re afraid of making and jump in right there!
P.S. If you want to share your story with us, hit me up on Twitter! Let’s talk :)
1. Throwing money at everything as the solution, especially for marketing
2. Assuming running your own business would take less time than a full-time job
3. Data breach due to a quick move to remote work
4. Making your website ready for increased traffic
5. Making big investments without proper research on users’ needs
6. Not determining the factors for success
7. Trying to do everything by yourself, thinking you know best
8. Not considering the funnel while running Facebook ads
9. Spending venture capital funding like crazy
10. Not doing research on the competition
11. Not echoing the problems customers are facing
12. Avoiding risk
#1 Throwing money at everything as the solution, especially for marketing
Glen Wilde, CEO & Founder of Diet to Success
I'm the CEO of Diet to Success, a personal training and nutrition coaching company. Believe me when I say I made my fair share of mistakes as an entrepreneur managing a startup. My biggest mistake was throwing money at everything as the solution, especially when it came to marketing and promotions. If a social media ad wasn't converting, then I would spend more on advertising. If my website wasn't making it to the first page for lucrative keywords, then I paid more for additional content and keyword research.
I learned that there's a human element to marketing that you can't solve with additional spending. If an ad wasn't getting clicks or a potential customer dropped off in the middle of a sales funnel, I began asking why? I began diving more deeply into my key demographic. I thought I knew my audience well, only to be humbled by realizing how little I really know.
I knew nothing, for instance, about their pain points, or I would only scrape the surface. Why does a client come to me? To lose weight? Well, yes, but I had to go further. Perhaps they wanted to feel confident or have an accomplishment their spouse/kids can be proud of?
When I really began to know my clients, it gave me a far more conversion-effective way of marketing my campaign accordingly. Problem-solving became more about deep analysis rather than throwing more money at a failing marketing scheme.
#2 Assuming running your own business would take less time than a full-time job
Allan Borch, the Founder of Dotcom Dollar
If I could have a do-over, there’s one mistake I’d want to avoid. And that’s not aligning my business pursuits with my personal goals. I really wanted to go into business so I wouldn’t have to spend 80 hours a week working. I wanted to make good money but maintain work-life balance, too.
I got into my first business (an ice cream shop) without really thinking about how much time involvement it required. Turns out, it was still a lot. That business was a success and brought in a profit, but I was still working long hours. It was such a bad fit that I sold it not long after and rejoined the workforce after being offered a higher and more lucrative position by a former employer.
It wasn’t until a year later when I found the path that would lead me to form my own company. Thinking about it now, I should have given more thought to what kind of business would fit my own goals instead of just jumping into the next best opportunity to escape the daily grind of a corporate job. The bottom line is: align your business with your personal goals.
#3 Data breach due to a quick move to remote work
Dan Bailey, President at WikiLawn
A data breach nearly cost us everything. I made a mistake very recently that has been difficult to recover from. We're still working on it, and I'm fortunate it wasn't as bad as it could have been. Like most businesses, we moved to a remote model of working once the shutdowns occurred. Though Texas has opened up many businesses, we're still remote. The way things are looking, we'll remain that way through the rest of the year.
Unfortunately, when we started, not everyone was working with secure networks. We should have provided better hardware and instructions on encrypting data, but I didn't have the foresight to hire a network security professional to look over things. Because of that, a breach compromised some of our customer data.
We were able to lock things down fairly quickly, but I hate the fact that it happened to begin with. We'll likely never win back the trust of those customers, and that breach is now a blemish we'll have to bear for as long as we operate. Fortunately, it has made me all too aware of the need for proper network security, and nothing like that has happened since.
#4 Making your website ready for increased traffic
Brian Lim, CEO of iHeartRaves
In terms of mistakes and struggles that we overcame, a big one would have to be the ecommerce platform we originally chose. After appearing on Shark Tank, we knew that being featured on a highly viewed television show would attract quite a bit of website traffic. In the year leading up to the episode’s air date, we purchased 30 servers, simulated load tests, and invested over $500,000 to make sure the site could handle the massive influx of traffic that would be coming our way. But when the episode aired, the site went down.
In the world of ecommerce, uptime means everything! A lot of money was lost that day, and it made what should have been one of the happiest days, one of the worst. Since then, we've switched over to Shopify, and our lives have been made immeasurably easier. We likely would never have had this issue if we had been with Shopify from the beginning. All this is to say, patience was definitely learned in a situation where we had to expect the unexpected. We didn’t let that situation sink our company. Instead, we grew our company and surrounded ourselves with excellent employees who would help us continue to grow in the years following.
#5 Making big investments without proper research on users’ needs
Neal Taparia, CEO of Solitaired
With my first business, we had built citation generation software for students that had amassed over 1 billion citations. We were confident we could use that data to turn it into a one-of-a-kind search engine that would help students research better. We spent over $1 million building the technology to make this as powerful as possible. When we debuted it though, it was a total dud. Turns out, Google was still a much better place for students to research.
It made us realize that no matter how much we like an idea, nothing beats getting something out to users and understanding if it truly solves a problem or not. That is the ultimate form of learning. With Solitaired, we do exactly that. We rapidly run painted door tests to see if our users like the idea of a feature. If we see enough clicks, we learn the feature is valuable, and only then do we build it out. We can't imagine building products any other way now.
#6 Not determining the factors for success
Alex Deutsch, CEO at Oasis Tile
When we fail, we analyze factors that led to failure. It is because there are always reasons that result in unfavorable results. We, usually, forget that when we succeed, there are also reasons behind the success. I committed the mistake of not measuring success a few years ago.
We launched Oasis Tile over a decade ago with an aim to provide customers with hard-to-find tiles. We wanted to give a unique shopping experience to our customers by offering them creative products and advice from experts. We invested only in products that we believed were backed by our trusted partners. It worked, and we had many loyal clients in just a few months. In the process of acquiring new clients, we forgot to address the factors that helped us in success. They were high-quality and unique products, customer-first philosophy, and free samples. Although these remained the major part of Oasis Tile, we could have made efforts to strengthen them. We noticed a decline in sales.
Analyze both the failure and success. Whether you fail or succeed, it is important to decode the factors that led to the result. Things that lead to failure can help you determine what changes need to be made in your existing plan. On the other side, analyzing success helps you build a more effective plan to keep your loyal customers happy and get new clients.
#7 Trying to do everything by yourself, thinking you know best
Milosz Krasinski, Managing Director at Chilli Fruit Web
When I first launched Chillifruit, my biggest mistake was trying to do it all, and all by myself. While you can always expect some long hours and multiple frustrations when starting a new business, my sense of autonomy meant that I was constantly playing catch up. Basically, I was reacting rather than managing. Since that time, I’ve learned some valuable lessons which have seen my business growing and running more smoothly.
Outsourcing. We’ve all heard the phrase “Jack of all trades, master of none” and this was particularly true for me and my business. While I’m an expert in my field, my skills didn’t match some areas of my business. I resolved this by outsourcing these tasks which allowed me to concentrate on what I do best.
Networking. No man is an island, and I learned that you don’t get very far without other people. Once I began to network, I then began to collaborate, and this has taken my business to a whole different level.
Listening. Following on from networking and collaboration, I learned to listen to different opinions. I’m not necessarily saying that I would always change my mind or my strategy, but taking other viewpoints on board can really help at times.
#8 Not considering the funnel while running Facebook ads
Ronald D'souza, Digital Marketing Manager at FJackets Company
About four years ago, our company was relatively new to Facebook ads, and we would run ads recklessly and also expect sales. After spending thousands of dollars with no results at all, I realized it doesn't work that way. We ran most of the campaigns on traffic objectives, and all we got was traffic with no sales.
After watching some of the training videos on YouTube, we realized that the funnel was important here as well. It took some time to make it profitable, but it worked. It seems like we have the winning combination of Facebook ads with traffic objectives for cold audiences and re-target conversion ads for a warm audience. It is the re-targeting ads that get us most of the sales. In contrast, the ads targeted to the cold audience works as awareness and interest even though the objective is traffic.
#9 Spending venture capital funding like crazy
Bartosz Baziński, COO, Co-founder of SentiOne
Spend your venture capital funding wisely! I made it, many startups made it, and I still see new startups making the same mistake: spending money like there is no tomorrow the minute they receive their funding. Office space that you can’t afford, pay raises for everybody, parties, celebrations. Also, you got those few millions in funding and you believe that now you can spread your wings, conquer the world, and enter every market and every segment at the same time. I see too many startups entering too many markets at once and building offerings for SMB, mid-level, and enterprise clients all at once. They will just burn the money.
No matter how much money you get at the beginning, you need to have a laser focus on how to spend your money. Choose your audience, select your target group, find the best market, research it in and out, select your customer segment, and milk it as much as you can. Don't go wide, go deep. Ensure you constantly invest in your technology, product, and developers. That is the main thing that will give you the best competitive advantage. Investing in technology will make sure your product is actually solving the problems of your customers.
#10 Not doing research on the competition
Michael Dean, Co-founder at Pool Research
One of my biggest mistakes was not doing enough analysis of competitors and using that information to strengthen my own company. The industry I'm in, which is the swimming pool industry, is small but has several major players that control most of the market. When I first started my business and was struggling to stand out, I didn't think to do thorough competitor analysis to figure out what my competitors might be doing better than me and what their weaknesses were that I could capitalize on.
I'm of the firm belief that the mistakes you make outline your weaknesses, which eventually become your strengths if you work to improve them. Because my weakness was undervaluing the importance of competitor analysis for strengthening my business, I realized I had to improve in this area, and now it's one of the areas I'm best at and spend the most time in.
Don't just learn from your mistakes. Use them to find your weaknesses, and then turn your weaknesses into strengths. Become so knowledgeable on the topic that you never let that mistake happen again.
#11 Not echoing the problems customers are facing
David McHugh, CMO of Crediful
One of my biggest mistakes that taught me a lot was not centering marketing campaigns around common problems consumers are facing. As a marketer, my main focus should always be on the consumer. What kinds of problems they are facing, what they want, and what I can do to entice and convert them with a marketing campaign. For a long time, I didn't take into account the specific problems and issues that my consumers were going through, so I wasn't able to accurately reach them with my marketing.
My marketing wasn't boosting conversions and sales like it should. I realized after lots of analysis that I was missing something. I wasn't echoing the problems consumers were facing, and I wasn't explaining how my business could solve those problems.
I realized many people in our market were facing a lot of debt and wanted help and solutions on how to manage their finances to get out of debt. When I finally began to convey this common problem in marketing campaigns, I was able to get through to consumers, and we started converting more than ever.
I also learned that communication is a key part of marketing. And it's hard to communicate with your customers if you don't know the problems they're facing. I began studying my market and consumers relentlessly, and since then, our marketing campaigns have been producing better results.
I also learned that no matter how much of an expert you are in a subject, you can never stop learning. There's always room for improvement, and there's always a reason to perfect your craft. Even if you think of yourself as an expert, you may be just on the verge of another breakthrough that will change your perspective.
#12 Avoiding risk
Alex Azoury - Founder and CEO, Home Grounds
Having a regular day job/paycheck/salary is dangerous because it will keep you in your comfort zone. If your circumstances allow it, put your back against a wall, and quit your day job so you have pressure on you to make it happen.
When I felt the pain of losing that comfort of a regular salary is when I began to learn my second huge business lesson: Pain + Reflection = Growth. As you stretch yourself beyond what you ever thought you could do, you feel the pain. If you take the time to reflect back on those weeks or months of pain, you will be able to draw from the lessons which will move you forward in growth. There is no better way to grow than to allow yourself the pain of jumping in and the reflection on that time.
Your growth comes from the lessons drawn during a time of pain to make you a better business leader today.
Mistakes are common in business
Mistakes are inevitable in business, and you can’t avoid making them. They’re a necessity if you want to keep growing. So, rather than overanalyzing what you did wrong, focus on how you can do it better in the future. That’s the only way to grow.