if entrepreneurs just focus on making fewer mistakes of the things they can control, naturally, they’re more likely to succeed. Here are 5 mistakes most startup founders make when launching an app idea.
Humans are prone to making mistakes. Most of the time, we repeat the same mistakes. All other reasons aside, this can explain why most entrepreneurs fail to successfully launch and grow an app idea.
There are many variables that entrepreneurs cannot control in a startup. Competition, regulation, market volatility and performance are a few of the things that founders cannot individually influence. But if entrepreneurs just focus on making fewer mistakes of the things they can control, naturally, they’re more likely to succeed. Here are 5 mistakes most startup founders make when launching an app idea.
1. Build Too Soon
In a technology startup, an application is the product by which customers’ problem is solved. Focusing exclusively on app development since day one assumes that both the problem and solution (app) are what the customer needs to get a certain job done better than what alternative solutions offer. Making such assumptions is the first mistake founders make.
One can argue that an app will have to be built sooner or later so we might as well start by launching it to gather insights from the customer and then build again. This is a valid point, however, when comparing the cost of building an app, even an MVP, without customer interaction to the benefits of involving the customer before product development, founders can easily increase the probability of success of their app idea while wasting significantly less resources in app development.
Business is much easier when the direction is influenced by the customer. To avoid this mistake, spend the first few weeks gathering customer insights through interviews. Build a customer advisory board that will help you define the biggest pain points, competitor flaws, market opportunities, product features, user experience and more.
2. Build Too Much
Often it may seem as if many features are needed to deliver the value proposition of the app idea. Entrepreneurs end up investing significantly more than they need to launch a viable first version. This is another reason startups fail as most founders run out of resources quickly.
The goal of the first version of an app is not to capture the majority of the market which usually has different expectations when compared to the first users. Initially, the objective is to launch a product that can test the riskiest assumptions. The first version should include only the needed features that can quickly test those assumptions before further development.
An effective way to help you define the scope of the MVP is to start by identifying what your potential buyers consider WOW features or process. Build what will delight your customers even if it’s only delivered through one or two features. WOW features are the reason your customers will switch to your product because their problems are solved exceptionally better than the competition.
3. Hire Too Fast
Just like focusing on building only the needed features to quickly test the riskiest assumptions, start by hiring only the talent you need to build or help you complete the MVP.
In a startup without a validated business model, more team members doesn’t necessarily mean faster growth. While entrepreneurs may be able to learn about the market and validate or invalidate a business model faster by burning through more cash, business model validation isn’t growth and more resources will be needed for later stages.
Instead of hiring based on projections, consider hiring in response to demand as this will eliminate a great amount of startup risk.
4. Promote Too Late
Marketing is a business investment you can make even if you have no clue what to build. Potential buyers typically go through several stages before converting into paying users starting with awareness that can lead to interest, trial, purchase and then referral. Entrepreneurs that manage to build awareness, even before having a clear launch direction, can involve people to help them build products worth paying for.
In the early days, don’t hesitate to share your journey, lessons learned and tips through weekly articles. Leverage online and in-person communities to connect and build a relationship with potential supporters. Early on, invest in marketing channels that reach your target group. This will help you learn more about your buyers so that if later you decide to invest in paid acquisition, you are more likely to focus on people that are most likely to buy from you.
5. Raise Funds Too Early
Sometimes it is much easier to raise funds with just an idea. The moment you launch your product, investors start evaluation key performance metrics like revenue, customer acquisition cost, customer lifetime value and churn rate. However, a qualitatively proven idea through interviews, market data, competitive analysis and market trends can sound more interesting to the investor than a startup with an MVP and no paying users.
Obviously, this depends on many variables such as the target group (B2B or B2C), product (hardware or software), business model, the experience of the entrepreneur, team and more. But in general, with good sales skills, you may have an easier job selling an idea than an early stage startup with no traction or not enough of it.
This can come with advantages, but certainly has many disadvantages the first being potentially selling yourself short. Selling equity soon can significantly undervalue your startup especially that just a few months later with a few customers, the valuation of the business can instantly increase.
Second, in most cases, entrepreneurs can bootstrap the early stages of the business without needing funding. Bootstrapped founders carefully evaluate opportunities and spend just what they need to make a step forward. With traction, an investment can help accelerate growth.
It’s easy to list common mistakes and advise not to build too soon or too much, not to hire too fast, promote too late or raise money too early, however, in reality, when you’re completely immersed in your startup, it’s hard to picture the right time to make development, hiring, marketing or fundraising decisions. The solution is to surround yourself with the right people and never stop asking questions and seeking advice.
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