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The 3 Most Common Mistakes Founders Make When Building a Company
Learn from these issues and you may be in better shape at your own startup
After seeing startups from the inside and out, from seed rounds to billion-dollar companies, from board meetings and CEO dinners to coaching sessions and leadership retreats — I see three mistakes get made at companies time and time again:
- Underestimating the importance of narrative when fundraising (and expecting a good product and/or solution to speak for itself).
- Spreading solutions too thin, and serving many customers poorly instead of a select group very well.
- Neglecting to reevaluate and reorganize talent for the startup’s current needs.
Mistake 1: Underestimating the importance of narrative when fundraising
I firmly believe that investors invest in (and employees join, and journalists write about) compelling stories, and your pitch deck is really just a vehicle for telling the story you want to tell. So, start first with the narrative and build the deck after you have it nailed.
The best advice I ever got on narratives was from Slava Akhmechet of RethinkDB on a matter totally unrelated to raising money. He said that every story in human history followed the same arc:
- The world is a certain way.
- Something changes.
- The world is now different.
This may seem obvious to you, but I love the simplicity of it. I bet you that any story you can think of right now follows this outline. Like every narrative, your pitch will follow the same arc.
The world is a certain way — Here you outline your background and the current state of the market: How you were introduced to the problem and why you are an expert, the order of magnitude of the problem today (it should be big!).
Your narrative must be concise and accessible.
Something changes — Your solution to the problem and why now is the ideal time for it.
