5 mistakes that young entrepreneurs make
Ever since Japan’s SoftBank made a huge investment in Housing.com owning 32 per cent stake in the real estate e-commerce company, it has been under the radar of public eye. Being one of the fastest growing e-commerce sites, the company valuation has been estimated to reach $1 billion soon. However, few days ago, after the scornful resignation by co-founder Rahul Yadav, the company is in the limelight once again. Rahul Yadav had resigned as the CEO and member of the board before he withdrew his resignation to join the company back as the CEO. This is, however, not the first time CEO Rahul Yadav has been on the spot for the wrong reason; he became embroiled in a social media dust-up with Sequoia Capital Managing Director Shailendra Singh and later the Times Group.
With entrepreneurs as young as Yadav showing no sign of prudence and faithfulness to one’s own start-up, the debate on what makes some start-ups successful enterprises, while others struggle to catch their breath in a chaotic age of young entrepreneurship has become the topic of many a coffee conversation. Almost everyone in India today is looking to become an entrepreneur, but many are left behind in the rat race because of the common mistakes that they end up making. This has also put the spotlight on the question of whether some kind of leadership coaching should be made available to CEOs, especially the young ones.
According to a recent research, 75 per cent of the startups actually fail. Some of the most common mistakes startups at a young stage make are:
Complicated business structuring: In an attempt to appear unique, many founders end up undermining the value of simplicity. They trade “easy” for “fancy”, and there’s where the mistake is usually made. The structuring gets complicated, finances get complex and hence revenue and its sources become difficult to understand.
Too little, too late: With an aim to reduce cost, many young start-ups hire just a handful of people who are expected to run the start-up from operations and strategy to sales, marketing, administration and execution. Employees are expected to go on for hours with little sleep and no personal time. In the process, the quality is usually compromised, there is delay in delivery of service/product and employees are usually left dissatisfied with the culture.
Underestimating rivals: Entrepreneurs who are able to raise funds may tend to take it for granted that they are above their competitors in the race. Firstly, today there is a plethora of funders available out there who are willing to buy stakes and if they see that a company is moving in the right path, they won’t hesitate to invest on another competitor’s product/service. So one can never be sure that the competitor is far behind or won’t find an investor. Secondly, start-ups must never forget that the market with industry giants is the same playground for their business too and overestimating one’s own company can prevent the start-up from working on branding, something that the big players already have taken care of.
Poor employee quality: For any venture to succeed, ideas need to flow in from different angles and perspectives. Start-ups usually fail to create a mix of Gen X and Gen Y. This can be a big source of failure. With usually only Gen Y forming the teams, start-ups miss the success point, which experience can bring.
Move-on attitude: In an attempt to hop from one successful delivery to another, young entrepreneurs forget to look down the staircase that is leading them up. It is absolutely necessary for entrepreneurs to be consistent in outreach with mentors and other key connectors in the network.