Paul Graham: 18 Fatal Injuries Lead to Failure of Startups

In a recent speech, someone asked me how to avoid a failed startup. At the time, I realized that this was a difficult question to answer. But from another point of view, in fact, you can answer this: "If your company avoids all the mistakes that may lead to failure, your company will naturally succeed."

Remembering things that should not be done is far more meaningful than remembering the successes of others. If you list an "error list" and successfully avoid those mistakes in the course of operating the company, you will get a successful prescription from a certain point of view. In general, there are only one reason for the failure of entrepreneurship: what you do is not what the consumer needs. If this is really the case, you can wait to die. This is a fact that cannot be changed. In fact, what causes the startup company's products to fail to satisfy users? The following list lists the 18 most common fatal injuries. The failure of all startup companies can basically be attributed to the above.

1 Lonely struggle

Don't know if you noticed that very few successful startups were founded by one person. What does a single founder explain? At least people who know you do not agree with your idea. Even if they are wrong, but you also need partners to brainstorm, avoid committing stupid behavior. In addition, partners can give you faithful support, and a single founder often lacks motivation.

2 The location is wrong

Not all places are suitable for entrepreneurship. Location is very important. Why are startups concentrated in one city? Because there are a lot of professionals there, they can easily resonate with what you have done and make it easier for you to hire people. In addition, the surrounding industries there are also relatively developed. You also have more opportunities to meet with colleagues and find a good direction for your career.

3 areas too biased

Most of the teams who applied for VCs to Y Combinator made a fatal mistake: the area of ​​choice was too cold. Perhaps this is a good way to avoid competition, but once they are successful, there will naturally be competitors. Although many people have great ideas, they chose a sound solution in the end. Contrary to this idea, entrepreneurs who choose to live in the cold area are more likely to reject the big idea subconsciously. The best way to solve this problem is to think of yourself as a planning officer, not yourself.

4 lack of innovation

Good startups don't start off by imitating others. Existing companies can give you some ideas, but they are certainly not the best. So don't blindly imitate other companies. You should dig inspiration in other directions. In this regard, you should look for unsolved problems and imagine what kind of company can solve this problem. What you also need to figure out is what consumers are complaining about and what they are expecting.

5 Stubborn

On the road to entrepreneurship, you should stick to your own ideas most of the time, but you should follow the laws of nature and avoid subjective assertions. In fact, many of the final products created by startup companies are not original ideas. In the process of starting a business, you should accept a better idea, or even give up the original idea. Of course, frequent changes in direction are also unlikely to be successful, and one good criterion for this is whether the new idea represents a certain progress. If you can use what you have done before, it is a sign of progress. If you want to start over, you must be careful.

6 Eyeless

The most afraid of start-up companies is to hire the wrong people, because these poor employees can not reach the appropriate level. Once trapped in this dilemma, his company moves slowly like an old cow pulls a broken car, and his competitors move like rockets. How can you pick good employees? In fact, you can look for industry experts to solve the problem, but please don't move is another matter.

7 Platform Selection

The selection of a development platform is a matter that needs careful treatment. During the economic bubble period, many startups were stricken by the choice of Windows platform servers, and Hotmail was still using FreeBSD servers after being acquired by Microsoft for several years. You have to choose the platform carefully. Some platforms seem to be very good on the surface. Once they are selected, they are just like digging your own grave. Javaapplets were once thought of as new ways to publish applications, and as a result 100 of the startup companies that chose it were upset.

8 Published slowly

There is a classic saying that this is the case, and the completion of the software will always stay at around 85%. Start-up companies are always looking for various excuse to postpone the release of products. In fact, this also reflects some problems: the pace of work is too slow, do not understand the real needs of users, over the pursuit of perfection. In fact, to solve these problems is very simple. It will be possible to release the product as soon as possible: Only through user feedback, do you understand what you want to do.

9 Posted too early

What are the minimum requirements for product release? The core is that the product itself is available to consumers, and it can also be used as a complete basic project for functional expansion. In fact, early product testers were generally very tolerant. They only required the product to be of some use. If your product is released prematurely, it will not only destroy your product, but also the company's reputation. Even users will never return.

10 The target user is not clear

If you try to solve a problem that you don't even understand, it's tantamount to putting a rope around your neck. Many founders assume that there will be users in their products, but it is not clear who is actually connecting them. In fact, this is very dangerous. Entrepreneurs should also abide by the principle of "from practice." Any subjective guess is not allowed. They must contact the users and observe their reactions. If your product can't find a particular user, it is doomed to fail.

11 too little money

Too little money means you can't win enough time for your company to succeed. If you are getting money from investors, that number should at least be able to reach the next stage. In addition, you have to control what the next stage is and how much it costs. I suggest that start-up companies should lower these two indicators at the beginning: try to spend as little as possible, and set the initial goal to create a solid prototype.

12 Overselling

If you raise 5 million is not enough, then the reason is likely to be excessive spending. Hiring a large number of workers is the most classic method of burning money. I have three suggestions for recruiting people: (a) exempt from exemptions; (b) use shares to replace wages; (C) only recruit products or pull customers.

13 Too much funding

It is of course impossible to raise too little money, but too much money will also cause major problems. After the money is over, you want to change the office environment and recruit more people. However, it does not mean that the company will develop in a favorable direction because your employees do not invest as much as they do, and even play tricks.

It's also a time-consuming process to get a large investment. The time it takes to raise a considerable amount of money from a VC may be longer than when you started a business. When your competitors are racing against time to research and develop products, I believe you are not willing to waste time on investors. So, if you come across the right deal, sign it.

14 Managing Investors

As a founder of the company, you should handle the relationship between the company and investors. You can't ignore them because they may provide insightful views, but you can't give the company to run them. The time spent managing investors depends on how much money you get from them. Even very successful companies have been fooled by investors. For example, Jobs was driven out of Apple by the board in 1985. Even Google, they had a very unpleasant experience with investors in the early days.

15 Sacrifice users for potential benefits

Making products that consumers need is far more difficult than making money, so entrepreneurs should consider business models later. There are always those who think that it is irresponsible not to consider the business model from the beginning. What I want to say is that the companies that can succeed at the end are all user-centric companies. Take Google as an example. They are all doing a search engine first and then considering making money. If you do not consider that business models are irresponsible, then ignoring the product itself is simply evil.

16 Want to save money, bend first

In the first batch of startup companies we sponsored, the vast majority of founders are immersed in writing programs. They seem unwilling to deal with business-related matters. Only one founder took half the time to talk to the top company of the mobile phone company and finally got a large order. If you want to start a company, you have to face the fact that you cannot all sit in the office and write programs, people need to deal with business affairs, and other industries do the same.

17 nest bucket

For companies, the fight between founders is a common thing, and the withdrawal of partners with key technologies may cause trouble. If you can be more cautious in selecting entrepreneurial partners, then most of the arguments can be avoided. Therefore, when choosing a partner, do not be afraid that people on the same boat will alienate you and bring others into the company, let alone someone who owns the technology and desperately partners with the company. For start-up companies, the most important factor is people. Therefore, there should not be too much adjustment in this area.

18 did not make every effort

Statistically speaking, most of the failed start-up companies have their founders with another job with good income. The founders of successful startups have almost fully detained their entire assets. Those startup companies fail because they can't do what the users need. The reason they can't do it is that they haven't tried their best. In other words, entrepreneurship is just like doing other things, and the easiest mistake you make is not doing your best.