Transparent Growth Measurement (NPS)

10 Mistakes Startup Founders Should Avoid in their Early Days

Contributors: Amol Ghemud
Published: May 23, 2022

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All entrepreneurs will go through failures and phases of growth and learning. And for early-stage startup founders, it’s a dynamic learning process – from finding the right market problem to focusing on building the right business model and prototyping. 

Taking your idea from inception to in-the-market is no easy task and entrepreneurs have to be willing to course-correct as they come up against challenges. While some common startup mistakes may be inevitable and out of your control, there are some mistakes you can avoid as a founder, especially in the first 500 days of running your business. Here’s our list of startup founder mistakes.

1. Building a product that no one wants 

Sometimes, in the thrill of launching a business and striking out on your own, you can get caught up building and iterating on a product you love, refining its features, creating wireframes testing concepts, and prototyping products. 

However… Does anyone have a genuine need for this product? It could be a great product – but if no one wants or needs it, it will meet its end even before your journey as an entrepreneur begins. 

2. Not defining your target market

An offshoot of what we have said above – if you don’t know who you are going to sell to, is there a point in creating the product?

Some founders go all in, without knowing who to target, whether it’s based on demographics, psychographics, or behaviors. Other founders have a lofty ideal that their target audience is everyone and their product is for everyone. This can lead to unrealistic projections and expectations. 

You need to have a customer in mind, who has a genuine problem that your cloud computing service can solve. Otherwise, you are just shooting in the dark. When you build a product that solves a problem for a specific group of people, your chances of succeeding are higher. 

3. Shoddy research, or a complete lack of it

Again, this follows from what we have said above: not knowing what to build and who to build it for is one of the startup founder’s mistakes in business that you can avoid. Competition today is fierce. And as a founder, you cannot afford to have blinders on. You need to put in months of research – researching the market, the competition, pricing, pain points, and branding…this will help you create your first draft business plan that you can then build on before you move into prototyping and testing. 

Apart from the market, it’s also important to understand how your sector works, whether it’s tech, e-commerce, FMCG, DTC… Several founders look to it building a business as a lucrative opportunity, without understanding what goes on behind the scenes. Do you have a database to tap into? How do you plan to sell or distribute your product or service? Will you rely on recurring payments and customer retention, or find new one-time buyers? If you are unaware of the basics of your segment, you are in trouble. 

4. Not focusing on your target user’s pain points 

Defining your customer is extremely important because, in the early days, you don’t have the time or luxury to come up with multiple services or plans. Many great companies started with a single SKU that cracked the code and captured the market. 

Don’t stretch yourself thin by building more products than you can afford to – and you should also learn how to say no to buyers who show interest, but are not the right fit for what you are building. 

5. Rushing into a GTM strategy too early

There’s always going to be a tug-of-war between getting your product perfect, and getting it out there. Finding a balance is not easy, but it is important to launch at the right time, rather than too soon. 

There may be pitfalls if you launch too early. You may risk putting out a poorly designed version of your product with too many bugs. You need to have a basic level of design, functionality, and usability, across all your features. Your first rollout is just the beginning and like all SaaS products, there will be improvements.

But before any kind of launch, remember to have your product-market fit. That precedes any kind of GTM strategy. 

6. Poor customer service 

However user-friendly and intuitive your product may be – customers will need a level of handholding in the initial stages. An ineffective and poorly-designed customer onboarding process and customer service department are bad for your product and your brand. 

If onboarding is bumpy, then your customers won’t see any value in your product, even if it’s loaded with features and functionality. Avoid one of the most basic startup founder mistakes.

If customer service is poor, then those customers will likely never buy your product or service again. They will churn – or worse, let the world know how bad their experience was. 

You need to have a simple sign-up process, an efficient onboarding process, welcome emails, a product walkthrough/training session, chat support, and a ticket resolution process, depending on the product or service you offer. 

7. Neglecting customer feedback

As we mentioned, your first rollout is just the beginning – there’s always room to improve and make changes and redesign. 

Many founders get so caught up in customer acquisition, marketing, running the business, and making the sale that they forget to check in with their customers to understand their experience. When you talk to early customers, you get to learn what their pain points are, which is an effective exercise in growing your product. 

It’s also important to take customer complaints seriously and dedicate time to resolving them.

You also need to speak to customers who have churned or stopped using your product. It may not be a happy conversation, but remember there’s a reason they left – and uncovering what went wrong will give you insights into how to improve your product and retain users. Customer feedback is key to improving products and services, so never take it lightly.

8. Chasing investors rather than customers

It can be tempting to take your business plan and chase investors, hoping to get that investment to make your product even better. But if you don’t have existing paying customers, more money is not going to help you scale effectively and lead to most of the startup founders’ mistakes and failures.

A great idea will not ensure funding and keeping your business afloat. The best way to grow and attract investors is to have a business model that lets the product pay for itself, thanks to a growing tribe of loyal customers. The more customers you have, the clearer it is that you have a winning product. 

9. Lack of a growth plan

Never take the attitude of “build it and they will come.” Customer acquisition strategies are key to any business (and can make or break them). 

All founders have a common aim – to find customers who can unlock a bigger market, allowing the business to scale. Word of mouth is great – but you also need to invest time and resources in sales, marketing, and growth-hacking strategies to gain traction.

10. Not seeking out mentors or asking for help

However novel your idea or product may seem – there is likely someone who has been there, and done that. Many startup founders (especially first-timers) may be wary of taking advice from others or seeking help. 

But many other folks have gone through similar challenges – and they can steer you in the right direction. And many successful and established entrepreneurs are more than happy to share their knowledge and experience with you!

It’s always wise to seek out a mentor, either through your existing network or through networking platforms and events. And, there’s no harm in asking for help when you need it. No one has all the answers, and as an entrepreneur, you need to accept that you won’t know everything related to the business. 

Learn with these courses for founders

If you are a founder or an aspiring one, you can learn how to avoid some of these mistakes – and how to build a business or refine your idea, with the help of these courses which we have found useful. 

NewLedge for STEM– a course for STEM grads and professionals that gives learners industry-relevant skills in product, marketing, entrepreneurship, and business management, to help them build innovative STEM products and businesses. 

Seed To Scale’s self-paced course – Build a Venture-Backable SaaS Startup. The course gives founders and aspiring founders like you the guidance and tools to succeed, from framework to fundraising.


What mistakes do founders make?

Most entrepreneurs make a few blunders, the most common of which are:

• Not doing a target market analysis

• Launching your product too soon

• Ignoring hidden costs

• Ignoring customer concerns

• Not getting outside assistance.

What are the biggest mistakes made by startup entrepreneurs?

Money will probably be a huge issue for a new business. The majority of business owners have little money to spend, and those who do frequently fall victim to the equally harmful “you have to spend money to generate money” attitude. Instead, strike a midway ground. Consider your costs and financial situation as you develop your ability to spend just enough but not too much.

What is a common mistake that small business owners make?

Not doing your homework on funding options for your small business is another common startup mistake. Financing may aid your small company’s cash flow, whether you’re trying to get capital from investors or researching other payment options.

Many business founders utilize credit cards, personal loans, or business loans to finance their initial costs. They could also make contact with other investors, such as angel investors or venture capitalists.

What kills most startups?

Business founders claim that causes for failure include running out of money, being in the wrong market, lacking research, poor partnerships, inefficient marketing, and lacking industry expertise. Setting objectives, conducting correct research, enjoying your work, and staying the course are all ways to succeed.

What is the main reason for the failure of a start-up?

If you ask past company owners why their companies failed, you will likely receive a wide range of responses that lead to startup founder mistakes.

Money Ran Out: This also refers to the inability to secure finance or additional capital required to maintain a business, particularly in the beginning, before a business may begin turning a profit.

Wrong Market: A large number of people attempt to launch a business that caters to all demographics which doesn’t work.

Lack of Research: A lot of aspiring business owners enter the market believing they have a fantastic service or product to provide, but they are unaware that no one is interested in those services or products.

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About the Author

amol ghemud
Optimizer in Chief

Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.

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