Few people have seen more of the dumb mistakes entrepreneurs make than Guy Kawasaki, the former Apple evangelist and venture capitalist who has since written 13 books on entrepreneurship, startups, and running businesses.
Today at a two-day conference held in Silicon Valley by the startup community network Startup Grind, Kawasaki, now chief evangelist of graphic design service Canva and executive fellow of Haas School of Business at UC Berkeley, held forth on the top 10 miscues made by entrepreneurs.
If you pay any attention to Kawasaki, you’ve probably heard this presentation before, because he has done it many times. But that’s OK. Not only does he update and refine it a bit each time, today is a new day for tech entrepreneurs, as venture capitalists cut back and once-darling startups see their valuations hacked to pieces.
Indeed, despite attracting a crowd of some 3,000 outwardly buoyant founders to Startup Grind, in fact, the show’s CEO and founder, Derek Andersen, laid out a picture of startup life today by evoking war, the Donner party, and Aron Ralston, the guy who cut off his arm to escape a climbing accident.
Yes, it was a tad over the top. Still, the point is, the fewer of these mistakes entrepreneurs make, the more likely they are to survive the funding crunch that has already begun and maybe keep all their key appendages. Here (paraphrased at times) are Kawasaki’s top 10 mistakes of entrepreneurs–and solutions to avoid them:
1) Multiply big numbers by 1 percent.
Entrepreneurs always ask, say, how hard can it be to get 1 percent of the cans of dog food sold per day? I hear plans along these lines every day. Huge mistake. It is hard to get 1 percent. Plus I don’t think any investor wants to hear that you want to get a mere 1 percent.
Solution: Calculate from bottom up.
Figure out how many people your website can attract, what percentage will buy dog food. You have to be realistic. I have never seen a company meet their financial projections.
2) Scale too fast.
Let’s build all this infrastructure up-warehouses, customer service. Guess what, your rockstar programmers are not going to ship on time. Also, the dogs do not eat the food. So you scale too fast. This is the most common thing that kills companies. I have not seen one company that died because it could not scale fast enough.