There are many common mistakes that first-time entrepreneurs make. It is important to be aware of them so that you can launch your venture successfully.
These are three most common mistakes.
Mistake #1: The failure to sign a founder’s agreement
From the business perspective, a founder’s agreement outlines the responsibilities of each founder, how the performance of each founder is going to be evaluated, the equity each founder gets, and the vesting schedule. It is important that the equity does not get vested right away. Equity, in this case, is a salary and just like you would not get a salary right away for the next few years, you should not get equity in the company until you earn it. When equity is vested, it also gives everybody a contingency plan in case any of the co-founders is not able to perform as expected or has to leave because of extenuating circumstances that make it impossible for him or her to stay involved.
Mistake #2: Not properly validating your idea
Too many entrepreneurs who have a great idea go straight to its implementation, without first validating it. This is a mistake. Validating your idea is a useful exercise because it can help prove to yourself that your idea is good and refine it as necessary. It can save you a lot of time and money if your idea needs further development. There are three parts to validating your idea: market research (analyzes demand), competitive analysis (analyzes supply), and customer discovery (analyzes product-market fit).
Mistake #3: Improper estimates of the time it takes to achieve certain goals
People tend to be very optimistic and want quick results. However, in entrepreneurship, patience and perseverance often identify those entrepreneurs who succeed. Sometimes things take much longer than expected, not necessarily because you are doing something wrong, but because things come up that may stall the process. As an entrepreneur, you should adapt to these unexpected moments and learn from them to move forward to better predict the time it takes to achieve goals.
Keeping these three things in mind will allow you to be better prepared when starting your venture.