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Top Three COMMON Mistakes Startups Make

Needless to say, creating and launching your business is not easy. Being a founder, a manager of a business requires handling so many moving parts and being on top of all functions, such as operations, marketing, finance, HR, product development, and so many more. It’s one thing to dream big, it’s another to create a plan around it and actualize it for the world to see.

You’re reading this article probably because you’re either working for or managing a startup, or you’ve been thinking about launching your own startup. You’re reading this because you’re thinking of the many ways to improve your business, to keep it failure-proof, and have it set for the long-term.

In this article, we will dive into the top three common mistakes that startups make. These are in no particular order, but they all lead to startups meeting difficulties often insurmountable to the point where they have to close up shop. Read on, and you just might have an idea of what your action plan can be to not meet the same fate.

Let’s dive right in!

  1. Not Conducting Enough Market Research and Analysis

In 2012 was the inception of a startup that goes by the name of Zirtual. Zirtual was a startup that provided virtual assistant services to individuals and businesses. This came at a time when automation and virtual assistance in general was not nearly as rampant as it is today (although this was around the time that the Apple Siri was also invented). The company was initially successful and raised over $5 million in funding from investors.

However, Zirtual struggled to scale its operations and struggled to maintain the quality of its services due to the rapidly changing preferences of consumers. In addition, the market for virtual assistant services became increasingly crowded, with many new competitors such as Amazon’s Alexa entering the space. As a result, Zirtual struggled to differentiate itself from competitors and generate enough revenue to cover its costs. The company eventually shut down in 2016, just four years after its launch.

So, what happened?

The failure of Zirtual serves as another example of the importance of conducting thorough market research and understanding the needs and preferences of target customers. Without this understanding, it can be difficult for a startup to create a product or service that is well-suited to the market and ultimately succeed.

Market research is necessary for startups in order to gain a deep understanding of their target customers, including their needs, preferences, and behavior. This understanding is crucial for developing products or services that are well-suited to the market and that will be successful. In addition, market research can help startups to identify and understand their competition, as well as the market trends and dynamics that may affect their business. This can help startups to differentiate themselves from competitors and position themselves in the market in a way that is advantageous.

There are several reasons why startups may struggle in conducting market research. One reason is that startups often have limited resources, including time and money, which can make it difficult to conduct comprehensive and in-depth market research. In addition, startups may not have the expertise or experience to design and implement effective market research methods and techniques. Another reason why startups may struggle in conducting market research is that they may be too focused on developing and launching their product or service, and may not prioritize market research as much as they should. This can lead to a lack of understanding of the market and their customers, which can ultimately hurt the chances of success for the startup. Additionally, startups may be too closely tied to their product or service, and may have a biased or overly optimistic view of the market. This can prevent them from conducting objective and unbiased market research, which can result in a lack of accurate and valuable insights.

The ultimate consequence of not taking due diligence with market research is putting out a product that does not align with the current market demand. This accounts for 42% of why startups fail.

Conducting market research doesn’t have to be complicated, time-consuming, or costly. The solution to market research troubles can be as simple as expediting the process of empathy, ideation and experimentation through design sprints. Design sprints allow you to still implement your product while maintaining the flexibility to adapt and adjust to customer feedback whenever necessary.

            2. Not Creating/Following a Clear Business strategy

Sidecar was a transportation company based in the United States (US). It was founded in 2011 and provided a ride-sharing service that connected drivers and passengers through a mobile app. It had top-notch technology and one of its features was it enabled riders to set their own price. In general, the app of the company offered much more control over their riding experience both for drivers and riders.

Sidecar had top-notch technology but it had no marketing strategy. Car-hailing services depend on the traction present in the market and the network of drivers and passengers that they build. In other words, Sidecar could only become useful – and profitable – if there was always a high density of drivers and users; this eventually led to its decline. Unlike their giant competitors they didn’t invest enough to market their product and gain customers.

Instead of focusing on its powerful technology and the empowerment their app gave to its users, they tried to place themselves as an affordable alternative to Uber, which didn’t really work for them. Weeks after shutting down on December 2015, they were acquired by GM.

The failure of Sidecar serves as a cautionary tale for startups that don’t have a clear business strategy or identity. Without a clear idea of how to differentiate themselves from competitors and generate revenue, it can be difficult for startups to succeed in a crowded market. Not only this, but not having a clear idea is generally detrimental to the team’s day-to-day operating procedures, as they operate without a key end in mind.

Having a clear business strategy is important for startups for several reasons. First and foremost, a clear business strategy provides a roadmap for the startup, outlining the steps and actions that the company will take to achieve its goals and objectives. This can help the startup to stay focused and on track, and can guide decision-making and resource allocation. Whether it’s prioritizing product development, or marketing, or putting the customer feedback first, it all depends on how the managers and founders of the startup decide on and how they stick to it. In addition, a clear business strategy can help startups to differentiate themselves from competitors and position themselves in the market in a way that is advantageous. This can help startups to attract customers, generate revenue, and ultimately succeed in a crowded market.

A clear business strategy can help startups to secure funding from investors, as investors are often looking for companies with a solid plan for growth and success. Without a clear business strategy, it can be difficult for startups to convince investors to provide funding. Truly, time and effort should be made in ideating and sticking to a specific business strategy.

        3. Not Prioritizing Proper Hiring/Management of Personnel was an online retail company founded in 2011. It quickly grew to become a successful online retailer, selling furniture, home decor, and other lifestyle products. After the company’s rapid growth, CEO Jason Goldberg began to focus more on scaling the company’s operations, rather than focusing on hiring qualified and experienced personnel.

As a result, many of the new hires were inexperienced and unqualified for their positions. This led to mismanagement, inefficiencies, differences, and generally poor performance. Additionally, the new hires were often unable to adapt to the changing needs of the company, leading to further operational issues. Ultimately, these personnel decisions led to the company’s demise, as they were unable to achieve the growth and profitability they had initially sought.

At the end of the day, a business of any kind is only as good as its people. Why? Because they are the shot callers, they make the decisions, they are the ones that take action every single day. A product may be sound, a proper strategy may be in place and validation was made through rigorous market research, but if the human resources aren’t managed properly, it will all just fall flat.

The same way how the most important person in the business is the customer, that kind of empathetic service should begin with how the business handles its own personnel. They should take into serious consideration the people that they hire and to make sure that the roles, responsibilities, obligations and incentives are clarified and understood. There should also be a baseline level of experience involved, to make sure that no resources end up going to waste due to wrong decisions. That kind of culture begins with the leadership.

Elevate Your Startup to New Heights

In summary, the three mistakes startups make are the following: not conducting enough market research and analysis, not creating or following a sound business strategy, and not prioritizing the proper hiring/managing of personnel. Startup founders and leaders should pay attention to a lot of things, but should highlight these specific areas to keep their business sustainable in the long run and failure-proof.

But in order to take your startup to the next level, you need to speak with experts that have had a proven track record of success. Learn more about our offerings at

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