SLIDESHOW: Startup Rules To Live By And Mistakes To Avoid Like The Plague
For every startup that makes it big, there are several that flop.
Sometimes it's due to an inferior product. Other times a startup fails due to poor marketing or an inability to grow as fast as competing firms.
There are also cases when management simply did not know what to do. The founding team makes a few bad choices that destroy the company before it ever has the chance to thrive.
Andrea Anderheggen, co-founder and CEO of Shopgate (a company that specializes in delivering mobile shopping solutions), recently spoke to Benzinga about a series of startup rules that every entrepreneur should live by.
He also shared a few mistakes that entrepreneurs should avoid like the plague.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this slideshow.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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Rule 1: Patience
Anderheggen warned that many entrepreneurs do not succeed because they are not patient enough.
"If the idea is good and the market is there, it's just a matter of time until you're successful," he said.
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Rule 2: Prepare For The Worst-Case Scenarios
Before getting started, Anderheggen recommends that entrepreneurs have a plan that provides flexibility and includes the worst-case scenarios.
"You have to be prepared that your plans [may be] far too optimistic," said Anderheggen.
He added that he has extremely ambitious plans for Shopgate, but he is prepared if things don't turn out as anticipated.
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Rule 3: Solve Your Money Issues Before Getting Started
Anderheggen said that a lot of entrepreneurs think they will make a lot of money if they have a great product.
"But in order to make a great product I need to have money or revenue," said Anderheggen.
"It's kind of the chicken and egg problem. It's something you have to solve."
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Rule 4: Success Won't Happen Overnight -- Or In Three Months
If you plan to succeed in three months, Anderheggen said that you should expect to succeed in one and a half years.
"It takes more time and you have to be ready for that," he said.
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Rule 5: Market Decides Everything
While the first four steps are very important, Anderheggen said that entrepreneurs should not forget the importance of the market they are trying to serve.
"I'm a strong believer that at the end of the day, it's about the market deciding what startup is needed and what startup is not needed," said Anderheggen.
"If you [a] have product which is highly demanded by a lot of customers willing to pay for that and there are no competitors, then you should go for it."
But if an entrepreneur does not have a market -- if the product is simply one that he or she likes, Anderheggen said that is "not even worth trying."
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Mistake To Avoid: Forgetting The Team
Never forget about the men and women who are making your company come to life.
"If you have a great idea but your team is not good, you're not gonna succeed," said Anderheggen.
"Sometimes people [with] a bad idea succeed because the team is great. That's the other way around. So I think the team is of key importance here."
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Mistake To Avoid: Repeating Old Mistakes
Anderheggen said that something every entrepreneur must do is correct their mistakes.
"Some entrepreneurs do over the same mistakes and they are not willing to correct them because they think this is going to be a personal problem for them," said Anderheggen.
"The problem is that if you [continue to make] mistakes, that is a mistake itself, and you should just be open to [correcting it]."
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Mistake To Avoid: Overspending
When starting a new business, it's important for entrepreneurs to keep a close eye on their expenditures.
"It's also about having a balance between the actual success and your spending," said Anderheggen.
"If you see that success takes more time, you should also be more careful with your spending."
Anderheggen added that the worst thing that could happen is for the firm to go bankrupt.
"Then the company doesn't exist anymore," Anderheggen warned.
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Startup News You Can't Miss
Don't miss Benzinga's coverage of some of the world's most promising startups:
- How Shopgate Plans To Take Over Mobile Commerce
- EyeEm Scores $6 Million Investment to Take Down Instagram
- How an eBay PowerSeller Raised $20 Million For a Startup
- Will Google Glass Be Dethroned Ahead Of Its Release?
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