Adrian
Table of Contents
- Playing Startup
- Doing Things That Sound Important
- Hiring Distractions
- Premature Incorporation
- Website Issues
- The Logo Obsession
- Analysis Paralysis
- Actionable Takeaways
- Final Thoughts
- More Practical Resources
Playing Startup
Starting a business can feel like a daunting task. Entrepreneurs often get caught up in a whirlwind of activities, believing they need to perfect every detail from day one. I felt the same when I launched my first startup. I wanted everything to be flawless, but in doing so, I learned some hard lessons.
The term 'playing startup' describes how new founders often get caught up in all the surface-level stuff that makes them feel like a 'real entrepreneur' instead of focusing on the actual work that helps their business grow. It's like children playing house â mimicking the behaviors without understanding the substance.
This article provides essential business tips for beginners and first-time founders. Whether you're just brainstorming your business idea or already deep in development, knowing these pitfalls can help you avoid common mistakes and build a strong foundation for your startup. Aim for progress over perfection, and remember that every mistake is a chance to learn.
Doing Things That Sound Important
One of my biggest mistakes was getting bogged down by administrative tasks đ§. I invested a lot of time and money in drafting a sweat equity agreement for a potential cofounder who never delivered. I thought it was crucial for the business because a friend was working for me. However, as it turned out, my friend never did any presentable work. Eventually, I had to replace him with a development agency. In hindsight, focusing on building the product and figuring out marketing strategies would have been a better use of my time.
Shaan Puri, a successful entrepreneur, shares a similar sentiment. He says, âIâm guilty of this mistake. My first company, I spent a ton of time doing things that SOUND important (but actually are a waste of time). Things like âtalking to lawyers,â recruiting advisors, company culture, etc. It all SOUNDS important (but really isnât for early-stage startups). I call this âplaying startupâ (like when kids play house). Avoid this trap. Instead - find your one key metric (users or revenue) and push relentlessly after it.â (Source: Shaanâs 5 Tweet Tuesday).
Key Warning Sign: You're spending more time on administrative tasks than on product development or customer acquisition.
Hiring Distractions
Hiring my first intern was another lesson in misplaced priorities đ. I spent more time drafting an employment contract than focusing on marketing campaigns with the intern. We talked more about his contract than about marketing-related tasks. The goal should have been clear from the beginningâgrowth and user acquisition.
When you look at why business failures are so common, a lot of it comes down to hiring the wrong people and not knowing how to manage your first few team members.
Key Warning Sign: Your team discussions revolve around policies and procedures rather than growth strategies and execution.
Premature Incorporation
Incorporating a company too soon was another costly mistake đ¤Śââď¸. Without a clear understanding of product management, marketing, or running a business, I found myself drowning in accounting-related costs. These costs took a significant toll on my finances and caused many sleepless nights. Incorporation should come after nailing down your business model, achieving product-market fit, and having a revenue generation strategy in place.
Many entrepreneurs don't know where to begin when starting a business, so they jump straight to incorporation because it feels like an official first step. Premature incorporation can quickly burden a startup with hefty administrative costs (legal fees, accounting, compliance, etc.) before it's even generating revenue - a common reason why many startups fail before they get off the ground.
Key Warning Sign: You're spending more on legal and accounting fees than on developing your product or acquiring customers.
Website Issues
Not knowing how to set up a website led me down another annoying rabbit hole đłď¸. I spent a lot of time and money trying to find the right freelancer. Unfortunately, some of the freelancers I worked with were mediocre and unprofessional (one freelancer even ran away with my 1000 USD đĄ), which only added to my headaches. In the early stages, prioritizing a functional product over a polished website can save you both time and money.
Key Warning Sign: You're obsessing over your website's appearance before you have a minimum viable product to showcase.
The Logo Obsession
I also spent too much money on getting a new logo for a website that didnât even exist yet. Nobody cares about your logo (nobody cares about your startup anywayâŚ), especially in the beginning. People wonât do business with you just because you have a nice logo. Focus on building a product that people need and want.
Key Warning Sign: You've spent more than a few hundred dollars or several days on logo design before validating your business idea.
Analysis Paralysis
Analysis paralysis is your worst enemy. Overthinking every decision can stall your progress. Sometimes, it's better to make a decision and learn from your mistakes than to remain stuck in inaction.
Key Warning Sign: You've been planning your startup for months without launching anything or talking to potential customers.
Actionable Takeaways
Here are six actionable takeaways to help you avoid the same mistakes I made:
- Focus on building and promoting your product or service first: Spend 80% of your time on product development and customer acquisition. Administrative tasks can wait.
- Avoid getting lost in legal matters: It's good to have legal papers ready, but don't spend too much time on them. Use templates from trusted sources like Y Combinator or Clerky and focus on growing your business.
- When hiring, look for growth roles: Your first hires should directly contribute to product development or revenue generation. Make sure to focus on roles and tasks that help with growth and success, rather than getting stuck in formalities.
- Delay incorporation: Hold off on incorporating your company until your business model, product-market fit, and revenue plans are more settled.
- Focus on one key metric: Pick one crucial metric that's linked to the business's success, like user growth or revenue.
- Keep an eye on what you're doing: If what you're doing is helping the business grow and make money, great, if not adapt asap. Adjust your focus as needed or pull the plug where needed.
Final Thoughts
Starting a business is super hard. You build, mess up, and sometimes have to start over. But every mistake teaches you something valuable and gets you closer to success. Don't fall into the "playing startup" trapâfocus on what really matters for growth. Take Shaan Puriâs advice and keep pushing towards your key metric. If you're an entrepreneur, small business owner, or even an MBA student wanting to start a new business, take these lessons to heart. Learn from my slip-ups, focus on what's important, and steer clear of unnecessary distractions.
đ Remember, hope is not a strategy đ
More Practical Resources
- Next steps for entrepreneurs after creating a solid business plan.
- If you found the realities of startup life eye-opening, you should also read about the hidden expenses of running a Delaware C-Corpâitâs more expensive than most founders think!
P.S if you do want to âPlay Startupâ, check out the game called Startup Company available on Steam đ
