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Top 10 Mistakes Startups Should Avoid

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Right from the start. To all our future clients. We’d like to write down top 10 startup mistakes we see entrepreneurs make again and again. This article is an addition to our article on biggest failures our client have made.

Some of the mistakes listed in this post affect development progress, other get our clients stuck in the middle of development. Each of this mistakes independently is not going to hurt your business, but if you make a bunch of them it might sink your company.

Identify the Market Need First

You probably heard this advice. It might happen that your product doesn’t have a market, so you should check it in advance. The easiest way to do this ask your relatives or someone who has a similar problem in your niche. Secondly, you can pitch your idea to investors and VC funds.

Building a product and then looking for a target customer is a recipe for disaster and zero revenue. Building an Uber clone app and relying on its experience is no better. Uber has found its perfect product-market fit and it’s already occupied.

Know your strengths

Time and money aren’t infinite resources. Assess your resources first and then use them efficiently. We experienced the situation when the project was halted in the middle because the client hasn’t managed to deliver results on time the investors were expecting. Just because he promised to deliver results faster than we said it could be possibly done.

Don’t give false promises on deadline, especially when you negotiate with investors. You probably don’t know but that yet, but the investor might find you exactly because you incredible time promises, not the product itself. Make it clear in advance.

Hire right people

Hiring brilliant people won’t get you anywhere if they can’t work well together. Teamwork matters. This is one of those powerful things that allows us to make work faster and cheaper. Build a team with complementary skills and perspectives, this is a primary power of unicorn startups that will allow your company to pivot if the things become too rough.

See also: The Role of Digital Tools in Remote Team Management.

From our point of view clients who fail to hire right people frequently change representative who communicates with our PM. The change of decision-makers is not a big deal though, but it can cost you several days of work because the new person should get on the same page.

Don’t secure your IP too early

This advice may make some IP lawyers pulling their hair up, but the reality is your idea will morph over time. The ideas change, and you will just waste your time running off a provisional patent. And don’t attempt to license an idea. The idea is worthless, the execution matters. Just make sure to sign an NDA with your software partner. 

China syndrome analysis

Don’t fall into China syndrome analysis when you’re doing your financial projection. We get many customers that come to us and they say: “If I only make ½ of 1% of this huge market to buy my product, I’m going to be rich!”

Well, technically, if you could get 0.5% of everyone in China to buy the app, you’ll be rich too. But what’s important is how you’re going to do that. Get back to the execution, and addressable market segmentation.

Legal contracts

Don’t allow your partners to write your legal contracts without you. There is nothing magical about contracts. You can write your own agreements and if you allow your partners to do so you’ll gonna get an agreement that is very one-sided.

This issue usually occurs while signing a contract with mobile app development companies. Look for a fair pricing breakdown, ask for software specifications upfront, get the schedule approved. If you’re not a sure about the contract take Time & Material pricing model and pay only for work that is delivered.

Involving PR firm too early

Reality is startup is a sales job. You’ve got to call a journalist and convince that journalist to write about your business. A PR agency won’t have insights you have or the passion you have for the idea. PR agent will pick up the phone, call a couple of their buddies and if nobody writes the article they’re done.


The same is true for consultants. Silicon Valley companies often rely on them, and often to their peril.

If you come across someone who really believes in your business and they really want to help you then ask them to join your company in a form of equity participation. We believe in consultants that are willing to actually join your company from an equity standpoint. Or those who are financially interested in your success.


Entrepreneurs should avoid exclusivity by all means. This is how biggest companies in Silicon Valley can fool you. Such Goliath may come to you and promise to take your technology into their channel with millions of customers. And that’s sound great until they ask you to provide your technology exclusively.

As soon as you sign an exclusive agreement with a big company you’re running a risk of them putting you on the shelf. Because you’ve taken away that risk that one of their competitors might partner with you. You can’t take that risk away. As soon as it goes, they’ll dump you.

So the way you work around this exclusivity is if the other party absolutely can’t move off without you. Ask them to sign up a minimum commitment (to pay for a portion of sales no matter what), because there’s an opportunity cost associated with exclusivity. You should ask them to cover a portion of sales in exchange for exclusivity. If they are serious about their offer, you can take a chance.

Anti-dilution Provisions

Stay away from that thing. You’ll have some investors or partners come to you and demand to make their share protected from dilution.

Everybody should be in the same boat. If one person has any dilution provision, their objectives won’t align with yours. This is because they won’t get impacted by bad decisions. They may hire new people or sign contracts without sharing risks. You want everyone to be negatively and positively impacted by the same actions.

Bottom Line

Can’t promise you a silver bullet, or that if you will avoid these 10 rookie mistakes you will be a successful serial entrepreneur, though. On top of that knowledge, you should keep the faith and persistence. Having a faith and being persistent at the execution of your idea will get you to success. Start small, dream big.

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