Focusing too much on the product and ignoring the customers 3
Considering marketing unworthy of investment 3
Launching the product/business idea without testing it 4
Waiting too much for launching a product/business idea 4
Ignoring to apply the appropriate operational support 5
Targeting rapid growth without having the capabilities to support growth 5
Spending money on the wrong resources for lack of a consistent business plan 6
Not taking risks 6
Entrepreneurial Mistakes-What Shouldn't You Do
Focusing too much on the product and ignoring the customers
Thinking of Bill Gates or Steve Jobs who quit faculty to become globally renowned entrepreneurs, inventors and trend – setters in the industry in which they activate, serving people all around the world with their futuristic products and services, really excites individuals to follow their leads and launch on the markets their original solutions meant to satisfy customers’ needs. But what might set them apart from successful entrepreneurs like Bill Gates or Steve Jobs might be their due-diligence on market trends, as well as their versatility to understanding the market and to create products with growth capabilities. In fact it is the consumer who should be at the heart of the business, not the developed product. In other words, thinking too much on the product and ignoring the clients’ request would not advantage the product. Although indeed the developed product might be revolutionary, it also needs to be marketable and to answer the customers’ needs, because in this capitalist market the client decides what works and what does not work. Therefore, being too focused on the product is an entrepreneurial mistake and although in time the benefits of the product will be acknowledged and appreciated by the market, this might be too late for the entrepreneur who failed to adapt the product on the current customers’ needs and optimize its growth capacity, by creating the need on the market. Entrepreneurs should be focused on the consumers and they should be flexible to adjusting the products’ features to clients’ requirements.
Considering marketing unworthy of investment
Imagine an airplane flying and suddenly stopping its engine while still up in the clouds. Now imagine Coca Cola without promotion. The outcomes of the two scenarios would be the same: they would both go down. Considering marketing unimportant for investing in promotional or advertising activities represents another entrepreneurial mistake. Thinking that the developed product is too good to need marketing activities and that it will achieve substantial sales without employing any marketing strategies means not living in this millennium. Every company gets into marketing and the key is not to apply marketing activities for selling the developed product, but to customize the marketing activities on the developed products, in line with the targeted group’s specificities and shopping behaviors. There is much to be learned from Under Armour’s case, a new entry company on the sports garment market, which adapted effective marketing strategies such as word of mouth, product placement or celebrity endorsement for reaching number 1 on its market, entering in the popular culture and over passing globally renowned brands like Nike or Adidas due to its marketing mix, but also to its revolutionary product. This is to say that even revolutionary products require marketing activities and thinking otherwise it is an entrepreneurial mistake. Simply launching a product without promoting it, not using the available marketing tools and strategies adapted to the developed product, would most probably mean that the product does not exist, for it is unknown to its targeted audience. Hoping to get your product self-promoted by making customers talk about it and create buzz and word of mouth around it without enhancing this strategy and without supporting it with other marketing and advertising activities, is unlikely to bring you anywhere close to Under Armour’s entrepreneurial success story or Coca Cola continuous popularity.
Launching the product/business idea without testing it
The best way to test a business idea would be to address it directly to the potential consumer, who will offer an honest feedback regarding its quality and its capacity of answering his/her necessities. It would be naïve to over trust the business idea without taking into consideration if the market actually needs it. Considering that a business idea will change the market and will be a trend – setter, without discussing about it with others and asking for validation, or testing it against various potential challenges, might bring the entrepreneurs into an irreversible failure. Ignoring the specialists’ advices or critiques leads the entrepreneur to missing the chance to understanding the threats, opportunities or weakness that his/her business idea might have, as he/she is solely focused on its strengths. Similarly, considering the developed product error-free, one that is unbeatable and revolutionary, without testing it, denotes that the entrepreneur cannot see the whole picture and this raises significant questions about his/her entrepreneurial abilities. This might lead the entrepreneur that over trusts his/her business idea to launch it too early on the market, without considering all the details, delivering like this an unfinished business idea or product, which might encounter tremendous difficulties along the way.
Waiting too long for launching a product/business idea
Consider that Apple would have over waited to launching its iPhone. This would have been such a waste of time, such a waste of market preparedness for making iPhone a trend-setting accessory, defining a third-millennium lifestyle and such a waste of business opportunities.
Over testing a product or a business idea and waiting too long for launching it on the market might disadvantage the entrepreneur. Likewise, investing a long time on perfecting the features of the product or business idea intended to be launched on the market might lead to wasting the perfect moment for releasing it, when the market would have been prepared to absorb the product or business idea. Entrepreneurs should consider launching the product as soon as it is complete and considered valuable after testing it. In time, other features of the products can be improved or the product itself can be upgraded, according to the market’s needs and to the customers’ requests. Not seizing the right moment for launching a product means missing out significant business opportunities such as seeing the customers’ responses to the product. This is helpful, because entrepreneurs can further build upon the received feedback, adjusting the qualities and features of the product upon the clients’ requirements.
Ignoring to apply the appropriate operational support
It is winter time, Christmas season and your new-entry delivery service company is recognizing significant business opportunities, so that you can barely face the demand, which determines you to concentrate all your resources into the delivery services. How about seizing new business opportunities and handling human resources, logistical or legal issues? How about thinking what you will do after the hot-season ends?
Launching a new business and not properly approaching its operations might have no effect on the business activity in its incipient stages, but on the contrary, the business can even benefit of an unexpected success, which may lead the entrepreneur into thinking that whatever he/she did with the business was good. However, not knowing what exactly brought in the success of the business is a huge entrepreneurial mistake and it can severely impact the business. As such, the business success might be determined by a period of chaos that the market is experiencing, but as soon as the chaos disappears, the market settles, and the new starter company can face a significant downsizing of its business, being even challenged to sell or to close down the business, due to an inappropriate management of the operations, which may include an inadequate control over the legal issues of the business. Ignoring the legal aspects of the business might be very costly and might even raise judicial issues that can cripple the business from its incipient stages or might generate severe problems harder to fix in a more advanced stage of the business development. Similarly important is recruiting the right people. While a good vision does imply competitive advantage and potential market share, a business cannot gain either of these solely with a vision and without a right execution. Therefore, hiring the right people for the job at the right moment is a responsibility that must not be delayed, as it can cost valuable business opportunities as entrepreneurs might be too focused on the execution (in the lack of the dedicated people for this part) in the detriment of seizing the business opportunities at the right moment. In addition to this, not hiring the right people at the right time is an entrepreneurial mistake also because this hinders the proper development of the business, as it will lack various talents, such as soft skills, sales, communication, technical, etc., that one individual cannot handle all at once.
Targeting rapid growth without having the capabilities to support growth
Targeting and exploring rapid growth and development represents another entrepreneurial mistake that entrepreneurs should avoid doing, unless they have the appropriate management, capabilities and resources to handle the challenges of a rapid business development. As Allen indicates, new entrepreneurs can identify as an opportunity to get new investors the rapid growth, considering that this might attract potential interested parties, neglecting, however, the fact that a fast growing business requires sustainable capabilities and resources to manage the increasing demand, the increased sales, which fall in the responsibility of the founding team which may not be prepared to handle an emerging business. Like this, instead of attracting business investors through demonstrating the potential of a fast growing company, entrepreneurs can both discourage the investors, as they can analyze the incapability of the company to handle increased business and the incapacity of planning ahead.
Spending money on the wrong resources for lack of a consistent business plan
Getting over excited about a vision or a business idea often implies another entrepreneurial mistake, specifically spending too much money on the wrong resources, indicates both a lack of a clear focus and a haste, which are things that entrepreneurs should never do. Lacking the clear focus is a sign of not developing a comprehensive and consistent business plan, and not having SMART (specific, measurable, achievable, realistic, timely) objectives and when this also involves money (and entrepreneurship means either making money or spending them irrationally) it might cost the entire business. Business plans tell entrepreneurs who they are, who they want to be, what they want to achieve (what are their goals), specifically how they plan to achieve what they proposed (what are their objectives), how they will reach the objectives (what strategies and in the end what tactics they will use), but it also implies an in-depth analysis of the market, of the external and internal environment-SWOT analysis-as well as a microeconomic analysis (investigating the political, economic, social, technological context - PEST analysis). Not having at least all these things established, plus a clear knowledge of the five competitive forces on the market implies significant entrepreneurial mistakes. Entrepreneurs should never spend money before having them and this rule includes the booming businesses, which might be on the edge of achieving great performances, because without cash money in their hands they will not be able to afford paying bills, human resources and other current expenses as these.
Not taking risks
Although it sounds paradoxically compared to everything advised above for the entrepreneurs not to do, another significant mistake that entrepreneurs should not do is not to take chances. In the business world, the market sometimes does function as a roulette, and entrepreneurs might place their bets, trusting their guts. Nevertheless, this should not imply neglecting the market analysis, the competitive analysis or the microeconomic context, and the business vision, as all these, separately or together, can serve as relevant data upon which one’s intuition can guide when taking risks. However, failing to take a risk, failing to sense when the business requires a risk-taking is something entrepreneurs should never do, as this might make the difference between a great business and just another business.
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