Top 4 Mistakes Of Startup Founders
This article was contributed by Keith McMunn, Director of Awesome Inc Fellowship for Awesome Inc. Awesome Inc is a startup incubator that exists to create and grow high-tech startups in Kentucky.
After 10 years of working with startups and helping them scale, our team has seen inspiring successes and plenty of mistakes. We figured the best way to avoid those mistakes in the future is to share them with you so we asked Keith McMunn, the Director of the Awesome Inc Fellowship, to lay them out.
Every startup founder will make mistakes; our hope is that you can at least avoid these common ones and go make your own.
We’re cheering you on!
Mistake #1: Not starting with the problem
It blows my mind that too many founders take too long to make me care about the problem they are solving. If you are solving a real problem, lead with it. A great example is OmniLife, a Fellowship company. Founder, Eric Pahl, once sat across from me at a table and said, “Keith, 22 people die everyday waiting for a donated organ. The worst part is, most of them were waiting for an organ they were already matched to.” He had my undivided attention from that point on.
Too many founders are so in love with the solution that they have been working on to remember that their audience doesn’t care until they are convinced there is a problem. If founders want the right people to give them the time of day (or better yet, funding!), they need to appeal to peoples’ pain. Nothing builds momentum quite like a group of people, investors, and mentors with shared pain.
Too many founders are so in love with their solution to remember that their audience doesn’t care until they are convinced there is a problem.
Mistake #2: Falling for false traction
Being “in charge” is the blessing and the curse that every startup founder needs to find themselves on the right side of. One of the primary offerings of the Fellowship Program at Awesome Inc. is consistent accountability. Every month, I hold companies accountable to doing whatever necessary to build their traction. The best form of traction is always revenue. Nothing validates a company better than its ability to get people to pull their wallets out and hand over money.
Every startup founder knows this. That is why I hate to see founders, usually of pre-revenue companies, celebrating the fact that they collected X number of business cards at an out of town conference. Don’t get me wrong, it’s always important to build your network… but collected business cards aren’t worth celebrating unless the name on the card has signed up to be first in line for your product or service.
Nothing validates a company better than its ability to get people to pull their wallets out and hand over money.
Mistake #3: NDAs from the wrong people
A dead giveaway that a founder is too naive or unhealthily skeptical is if they won’t open their mouth about what they are working on until a non-disclosure agreement gets signed. Countless times, I’ve had startup founders request a meeting with me, get it scheduled, weeks pass, we finally meet at the same table, and then they won’t say anything unless I sign an NDA. To their request, I politely say, “I’m not going to sign that. Awesome Inc exists to help your startup, not steal from it. If our track record of honesty isn’t enough to satisfy you, then this isn’t going to be a good partnership.” I always love the look on their faces.
If you want somebody to help you, it’s not a good move to slide a paper across the table that might as well say, “I don’t trust you.” Aside from that, it puts some entities in a weird place legally. I’d rather not work with a company at all than risk them falsely-accusing me of violating their NDA later.
If you want somebody to help you, it’s not a good move to slide a paper across the table that might as well say, “I don’t trust you.”
Mistake #4: Not participating in their local ecosystem
My point above about NDAs, at its core, is about playing nicely with your community. Not only should you trust those that you request help from, you should also be with them. Startups should participate in their local startup ecosystem for many reasons. The main reason is because every founder falls victim to, “you don’t know what you don’t know.” When you position yourself around the other members of your local startup community, you dramatically decrease the things you don’t know. We take this very seriously at Awesome Inc and in the Kentucky startup ecosystem. We have a core value called Be A Friend. Turns out that when startup ecosystem players become friends, they share their experiences and expensive lessons, thus making themselves better founders.