🚫 How to Avoid 8 Common Startup Founder Mistakes...
Renier Kriel
8 startup founder mistakes to avoid: Mismanage hiring and marketing expenses, negotiate legal fees upfront, choose a legal firm aligned with startup goals, use advisors wisely, hire strategically post product-market fit, distribute equity cautiously, understand event value, and embrace continuous learning.
A few weeks ago we covered 8 costly startup founder mistakes. But startups are complex and there are way more than 8 things that can go wrong. Here’s your part 2…
- Mismanaging hiring and marketing expenses: These are typically the two largest expenses for startups. If not managed properly, they can drain your resources fast.
- Excessive legal fees: Negotiate the scope and cost of legal work beforehand. Use standardised legal documents where possible and consider payment plans to spread out the cost. There are some free templates available that can help you get going like these from Digital Africa Collective.
- Choosing the wrong legal firm: Opt for firms that understand the long-term potential of startups. They’re more likely to provide better value for your money. If you are looking for legal representation for your startup, hit reply and let us know, we can point you in the right direction.
- Misguided use of advisors: Advisors can provide valuable insights, but it's important to align their incentives with your startup's success. Consider asking them to invest in your startup instead of compensating them with equity.
- Hasty hiring decisions before product-market-fit: Ideally, you should only start hiring once your startup has customers and a growing revenue stream.
- Distributing equity all willy-nilly: Be cautious about giving away equity, especially to those who aren't involved full-time. Remember, it's okay to negotiate these distributions. And when you are giving away equity, consider good-leaver/bad-leaver clauses and a cliff. These two things will make sure someone is executing in line with expectations for a period of time (before they earn shares) and, should they leave on bad terms (i.e. join a competitor), they could end up forfeiting their shares altogether.
- Misunderstanding the role/purpose of events: When participating in events, be strategic and creative. Your goal is to extract as much value from the event as possible without overspending. Don’t get caught in startup theatre – this is the notion that people talk, pitch and do startup things, yet very few are actually tracking sanity metrics and building viable businesses.
- Unwillingness to learn new skills: As a founder, be ready to wear many hats and learn new skills. This versatility can be a major asset in the early stages of your startup. Sharpen up on design, marketing, and hey, even a bit of coding if you need to. In fact, share The Open Letter with 3 friends and get the top 50 tools that can help you do more, plus 25 AI tools that can help you do it even faster. (Scroll down to get your personal sharing link.)
Think we missed one? Lets us know by replying…