15 mistakes young entrepreneurs make, but don’t have to. [Part I]

If you’re an entrepreneur, you’re probably going to screw up at some point. That’s ok. Entrepreneurship is a constant process of quickly testing hypotheses, failing, refining, and testing again. If you’re not failing, you’re not learning, right?

Well, not all fails are created equal. Some are wholly unnecessary, and I’d like to list a few of them here. Note that many of these are based on advice from actual entrepreneurs who would rather you learn from their mistakes than repeat them.

Because there’s a lot here (and because it gives me an excuse for more failblog.org pictures), I’m releasing the list in three parts, of which this is the first. So, without further ado, here are the first 5 of 15 mistakes you don’t have to make as a young, first-time entrepreneur. I’ll release the others imminently, so stay tuned!

#15: You’re trapped in the “college bubble.”

When you’re in college, it’s tempting to see the world through the perspective of a college student. So, when you brainstorm business ideas with your buddies, you may come up with concepts that only work on your particular college campus, or are only appealing to college students as customers.

Now, you might say, “Uh, Facebook?” Yes, there’s Facebook, but Facebook’s ultimate vision goes beyond colleges. Zuckerberg wants to connect all of humanity on a social graph. College was his stepping stone to that vision. If you need to get started in college, that’s great; but make sure your product can appeal to non-college users if you want to build a big company.

#14: You have no prototype. Or, you do, but your users are irrelevant.

It’s been said ad nauseum lately, but it’s never been cheaper or easier to invent a web product. So, do it! Once you have the concept sketched out, build the basic guts of your product and start getting users.

But, don’t just get any users. Remember, your goal is to test a hypothesis. If your sample size consists of your immediate family and friends, you probably haven’t tested the right things. Instead, find a way to get users early on that looks similar to the way you’ll get users at scale.

#13: You didn’t research the competition.

If you think “you have no competition,” you’re wrong. Competition is everywhere. Competition is anything fighting for your customer’s attention and, eventually, their dollars. So, first off, make an honest assessment of what’s out there.

Secondly, make sure you understand what these companies do and how you’re different. If you find that you have several hundred competitors, it’s ok to try something else. Do you really want to spend the next 5 years of your life building the 301st of anything?

#12: You haven’t talked to customers.

At an early stage, the best entrepreneurs I’ve met know their customers by name. Even web entrepreneurs, who don’t typically meet their customers face-to-face. Early on, you should be talking to customers any time you’re not building and testing product. After all, if you’re not infusing your product with customer input from Day 1, you’re probably not building something they’d want to use.

The sole caveat here is if you’re inventing something truly novel. Steve Jobs didn’t ask us if we wanted the iPod. We were pretty happy with the portable CD player (or at least I was). But, he had some pretty rational beliefs as to why it should exist, beliefs which were based on customer input on other products. (If you haven’t seen the video of his introduction of the iPod in 2001, do yourself a favor and watch it.)

#11: Your customer acquisition strategy is not repeatable.

There are many ways to get customers, but not all of them are scalable. I’ve seen lots of college businesses acquire customers by literally walking into shops and asking to speak to the owner. That works for a while, but I’d argue that it doesn’t prove the sustainability of your business model.

You want to move towards a proof point where every dollar you spend to acquire a customer nets several times that in contribution to the bottom line. Unless you’re selling a $100k widget door-to-door, it’s hard to make the numbers work just with feet on the street.

That’s it for now. Stay tuned for #10-6 in my next post!