7 Things First-time Founders Get Wrong & 1 Thing They Have to Get Right

Being an entrepreneur isn’t for the faint of heart. Difficulty, disappointment and apparent disaster are par for the course. 

Late hours, last minute panics, sure fire things falling through, unexpected opportunities appearing that demand immediate action, all while navigating a market that’s constantly changing and aiming for the moving target of customer satisfaction. While creating something new with technology that’s never been used before and a team who are tired, stressed, exhilarated and determined by turns, or all at the same time. 

No matter how much experience you have as a founder, and no matter how much support and guidance you get from actively advising investors, there are some things that are bound to be challenges. Overcoming them is a crucial part of growing as an entrepreneur. 

Some things, though, can be avoided. Yet there are certain things that, in my experience, first-time founders get wrong. It doesn’t have to be that way. Here are my top seven things to avoid as a founder – and one thing founders absolutely must do.

 1) DON’T – Flock with birds of a feather

Founding a company is an enormous leap of faith and hope, and it’s natural to want to do it with your friends. The trouble is, many founders team up with people who are too like them. Their buddies from the same army role, or the people they always joined up with for projects at school or university. 

Don’t do this. Your founding team needs to have a variety of essential skill sets, complementary (not matching!) personalities and diversity of experience. It’s comfortable, and comforting, to be with people who are like you – but too like you just isn’t what’s called for in an early startup. 

You need a technical founder. Often, that means someone who’s an experienced software engineer, but in other kinds of companies it might be a hardware expert or physicist or climate expert. Whatever the fit is for your company and industry, make sure you have it. Don’t plan to add it in later. 

On the other hand, also make sure you have non-technical skills in your founding team. This truly is the core of your company, its culture and its future. Not all of that is grounded in technical expertise. 

Also – please think not just twice but twenty times before working with a close family member. I’m not saying it can’t work. But the times it works are the exceptions, not the rule. Think about it seriously before you decide you’ll be an exception. 

2) DON’T – Delay market research and analysis

It doesn’t matter how great your product is, or how well it solves a problem, if the market doesn’t care about the problem, and doesn’t want a solution. Research the market and its attitude to your concept (and if possible MVP), not to mention willingness to pay for it, before investing in that direction. 

If you’re going in the wrong direction, the way you win that race is by turning around early on and finding a better path. 

Determination is key for a founder, but you have to save it for the direction that can lead you to success. Finding out what that is, is your job. 

3) DON’T – Put off hiring legal advice

Many first-time founders hear the word “legal” and yawn. 

Do you know who doesn’t do that? Founders on their second, third or more startup. They know how important it is to cover the legal bases early on – much earlier than you would think. 

Crossing the t’s and dotting the i’s early on puts the business on a far more stable footing, mitigates risk, provides needed clarity and helps show investors that you are a responsible, thoughtful and serious team who can be entrusted with an investment. 

 4) DON’T – Make it a boys’ club

Startups aren’t quite as dominated by all-male teams as they were fifteen years ago, when I remember having to introduce the idea of gender diversity to some entrepreneurs just beginning to consider their founding team. 

There’s still a long way to go until it becomes an automatic consideration, and in any event what too many founders miss is that gender diversity isn’t of value because it’s fashionable, but rather because it helps stir into the company diverse opinions, approaches and business mentality.

Gender diversity is often something that founders imagine they can “fix later on” when they’ve got the business off the ground and “things are a bit calmer.” That’s not how it works, though. There’s never a calmer time. (Not even after IPO.) 

Moreover, you’re building the culture right from the start. Everything that comes afterwards forms around that early seed, growing around it like a plant growing up a trellis or twining around a tree. In my experience, including gender diversity from the start brings greater openness, strength and willingness to question into a company’s DNA. It’s a powerful thing. 

 5) DON’T – Forget to interview clients

Don’t be so desperate to get early clients that you waste resources on products or services that aren’t helpful for your core business. Everything you do in the early stages needs to support your main goals for the company. That includes choosing clients who fit those goals. 

There are different priorities that determine which clients are the right fit for your specific startup. You might want to look for design partners, strategic partners, ideal case studies, etc. The key thing is to be intentional about what you need, and remember that that’s an integral part of using your scarce resources effectively. 

6) DON’T – Spend Too Big

Some founders get so swept up in the early success of a first round, especially when it’s a relatively large one, that they become too open-handed about spending on the wrong things. 

No early stage startup needs a large fancy office, or extremely expensive gifts for employees or for customers who are signing up. Costly big parties to celebrate successes are a mistake, too. 

Invest in your customer success, of course. Invest in your employees. But replace cash investment with thought, care and connection. It sets your company on a better footing financially, inculcates the right mindset from the start, and looks better to the outside world as well. 

7) DON’T – Shy away from firm, thoughtful decisions. One of the best things you can do – is be wrong!

The hardest thing in an early startup can be making fateful early decisions. Because it’s so hard, there’s an impulse to consult as many people as possible. This feels responsible, and as if it shares the blame or risk among many. In fact, though, all the responsibility is on the founders’ shoulders, and asking for lots of opinions doesn’t change that. 

There are also some founders who are so confident in their own vision that they won’t listen to anyone at all. That’s just as bad as having too many cooks in the startup kitchen. It’s impossible for your team to know everything you need in the early days. Expand your expertise by asking the right people. Consult the right people in a thoughtful way, not a scattershot one. 

The worst reaction of all to the difficulty of making decisions is not to make one at all, or put off doing it until it’s too late. Making the wrong decision can be problematic, but very often with early stage startups, not making a decision is worse. First time founders find this especially hard, and need to work actively to guard against this trap. 

It’s hard to accept, but the truth is that some lessons can only be learned through trial and error. Sometimes the best thing you can do is be wrong – and use that experience well. 

What First-time Founders Should DO

In a nutshell: Trust your gut, avoid your comfort zone.

Your gut is your best compass, both for what to do and for what not to do. It’s what got you to the point of founding a company. It drove you to explore this idea. You know what you’re doing. When you know that you know what to do, do it. Don’t second guess your gut. 

At the same time, don’t mistake that vital gut feeling for the pull of a comfort zone. That will lead to you taking the safe, easy path all the time – working with founders who are too like you, staying head-down in the product instead of looking at the market objectively, avoiding looking at the legal side of things, and so on. 

If you take one thing from this article, for yourself or to share with a founder you care about, make it this: Trust your gut, avoid your comfort zone.