How to Avoid the Pitfalls That Lead to Startup Failure

Pitfalls Of Startup Failure

My wife and I founded DCGWS back in 2007, with zero budget and an old, run-down PC sitting in the corner of our studio apartment. I would spend all day creating freelance profiles and bidding for projects on websites like GetAFreelancer and WebDesigner123, and spend all night studying HTML, CSS, PHP and JavaScript. Oh, those were the days and I sometimes remember them and start to feel nostalgic and think I miss those days. Stakes were low, risk was low, and yes, the rewards were low. But, I felt on top of the world back then as the one-man show that got it all done – and that’s how things were until February 2012.

Today, things are quite different. In less than 2 years, my one-man show has somehow ballooned into a company of 15 employees. How did that happen, you ask? Well, one of my web development clients wanted to ramp up production on his sites and suggested I hire someone to help out increase production. One became two, two became four, four became twelve, then all of a sudden, circumstances changed with the client and I get left with twelve employees to provide work for – or let them go.

Getting dizzy, yet? I know I sure did back then and I still do today when I think about it.

Now, I am aware that the easy, and probably smart thing to do would be to thank everyone for their contributions and wish them the best. And, yes I had considered that option. But, instead of throwing in the towel and shutting down the business, my wife and I decided to forge ahead – and here we are over 18 months later and we’re busier today than we ever imagined we would be. This has not been an easy road to go down, but I’m so glad I did. Here are a few of the takeaways that I’d like to share with you that might just help you prevent startup failure.

Find your niche and stick with it.

Trying to sell too many products or perform too many different services, especially during the first few months of operations, can overwhelm your team and drain your resources. While we are capable of building many different types of websites and applications, we have primarily focused on being the absolute best WordPress developers. Of all of the new projects we’ve worked on since our beginning, easily 80% have been WordPress related. Another 10% are our next favorite service, building Magento e-commerce sites. The remaining 10% have been search engine optimization projects or Kohana-driven web applications. Not only do you become experts at your craft by repeating over and over again, you also become known as experts at your craft – and that is a great thing.

Build a good team.

You are only as good as those working with you. While it’s not always possible to find and recruit the ‘best and the brightest’, especially for a small startup with limited capital, if you pay attention during the hiring process you can pinpoint the diamonds out there. These are the hungry, fresh graduates from less than prestigious schools, who are looking for an opportunity to shine. These are the rockstars that always come through in a pinch, the guys (or gals) that will stay late, come in early to meet the company deadlines. I consider myself very fortunate to have several rockstars working for me, but I’ve had to consistently filter out those who just didn’t have what it takes – neither in character, nor in abilities.

Never fail to reward and praise your shining stars though, or they might be lured away.

Know your weaknesses.

Admit it, you have them. I have them. Everyone has their own weaknesses But, if you can identify your weaknesses and compensate for them, then you might just make it out the other side to startup success. There are many different types of weaknesses that could harm your startup’s chances of success: maybe you aren’t good at talking with people, or maybe you are a procrastinator, or maybe you are too loose with money (or too tight). Fret not, there are ways to compensate for those weaknesses if you are willing to recognize them and do something about them. You might want to consider hiring a sales representative if you are weak at talking with people. If you are a notorious procrastinator, buy yourself a good app for your tablet or phone that constantly reminds you to do what’s next. It’s better to be brutally honest with oneself now and compensate for your weaknesses, than to remain blind to them and allow them to hinder you, or even worse.

Learn from your mistakes.

I promise you. Every single successful person on the planet has at one point or another in his/her career made a mistake. Now, they might not freely admit it, but they have. I am proud to say that I have made mistakes, because without them, I might not have become as successful as I am today. It is from my mistakes that I learn. But, the key is that you must learn from them. Albert Einstein once defined insanity as “doing the same thing over and over again and expecting different results.” You should apply this to every aspect of your business. If you find yourself in a corner over a bad decision you made, find a way to get out of it, learn from it and move on. Life is mostly forgiving and you should be able to get through most any mistake – once.

Start with ample funding.

I intentionally left this one for last as I hope that this is the one you most take to heart. Unfortunately, this is the one luxury that I did not have when starting. To say that it has held me back from growing would be hugely understating reality. If you are serious about starting your own business, get funded. Today, there are more sources of startup funds than ever before. It’s unbelievable, but if you have a good enough idea, you can even crowdfund your new venture. The results from your crowdfunding venture might even provide a good litmus test for your idea. If no one wants to fund your idea, you might consider other ideas first. Angel funding is also available if you know where to look and you have a really good plan for success.

By far, managing a startup is the hardest, most stressful thing I have ever done in my life, and if you are one of those people who like guarantees and afraid to take risks, this isn’t the move to make. But I am eternally grateful to my client who’s circumstances changed and left me in the position to build my own startup. And he’s still my client today.

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