Over the last decade, I have had the opportunity to talk to great entrepreneurs of all kinds. Whether they are entrepreneurs focused on digital, physical, or other businesses, they all have something in common: passion for their business. However, the process of creating and implementing one has several obstacles to consider, especially when talking about the online world. During the last 10 years of assistance and cooperation in setting up several companies, I have closely followed and made many strategic mistakes which I believe are possible to avoid.
With that goal in mind — because more important than having an idea, is to put it at practice — I have compiled a list of the 8 biggest mistakes made in digital businesses. If by any chance you are making any of these mistakes with your business, try to mitigate it as quickly as possible. Most of the time, it is more important to plan your actions and start working on them. The details are adjusted during the process, as experience grows.
That is one of the quotes I learned from my fellow entrepreneurs in Brazil, and basically summarizes a whole process of creation. Throw the first stone those who have never postponed a project in search of its perfect version. However, as we can see from the history of the internet and big digital businesses, sometimes the most important thing is to launch and put something on the market. For every day that we look for perfection, we are missing the opportunity to create a new market niche with our idea.
Projects like Facebook, Airbnb, Uber, among others, were launched very far from perfection. If it exists, perfection is achieved as business grows and becomes a priority in people’s lives. This is also the reason why many of these companies are constantly upgrading their software to meet the needs of their users. Facebook is very different today from what it was when it first appeared on the internet on February 4, 2004. Take a look:
Besides being extremely different, Facebook was originally created under the name of “The Facebook”. It was only later that Mark Zuckerberg’s company decided to change the name to “Facebook” alone, buying the domains “facebook.com” and “fb.com”. Therefore, more important than what you are working on, is to put that on the market as soon as possible. Because the proof of the concept will be an excellent indicator of where your business should go.
One of the reasons why lots of startups and small entrepreneurs fail is, without a doubt, lack of passion for their businesses. It is trendy to create startups and seek to be the next Billion Dollar Company in the Wall Street Jornal index. The so-called Unicorns. However, when you create something merely in the attempt of a millionaire exit, you forget the reason the business was created in the first place. The lack of passion for the concept often destroys the dream of future entrepreneurs.
More important than an idea is the passion we feel for it, and how important we think this concept is to other people’s lives. Large startups like Uber or Airbnb were born out of a need of the market and, in a disruptive way, created new consumption patterns and new market niches. However, more important than all of this, the passion of its founders made all the difference in the implementation of ideas and concepts.
Many of the new businesses that appear on the internet were born of the need of their founders. Services such as Airbnb are the result of the need for cheaper accommodations in the main capitals of the world, for example. When this happens, it means that companies are observing the real needs of the market and to supply it they create new niches of market that did not exist until then.
If you are creating a business that is not based on a real market need, but rather an expectation that the business can be extremely profitable, the truth is that you are creating a business that already exists and will not be very different from things already known in the market. Naturally, necessity is the best way to create something disruptive and that can easily open up new market niches and undiscovered needs so far.
One of the most common mistakes made by entrepreneurs is creating expectations that are completely out of alignment with what is reality in the markets. It is very easy to create a product that we consider to be of great value to everyone, to invest huge amounts of time and money, and to quickly begin to plan extremely ambitious expectations for its launch. And this rule applies to almost everything related to digital businesses.
In reality, expectations are just for you to understand how frustrating it is to get a market share in a given area. In fact, expectations are also the reason why you work so hard and devote yourself so much. But if these expectations you created are not aligned with what is reality in the market, chances are that you will suffer the consequences. And it is precisely at that time that the vast majority of startups end.
As the famous saying goes: “If you want to go fast, go alone. If you want to go far, go together”. Many of the great companies created on the internet were formed by teams of two or more people. It is rare to find a multimillion dollar business in which there is only one creator or partner. Exceptions are rare, and naturally you may notice several difficulties in creating a digital business on your own.
Digital businesses present too many variables and, above all, they need human resources that can be filled by multidisciplinary partners who have varied skills, such as web designers, digital marketing specialists, programmers, etc. In fact, no one can create or do anything alone. All business is dependent on people. Your employees are people, your distributors are people, your suppliers and even your customers are people. People are what make things happen and alone, little or nothing happens.
Meet with other entrepreneurs, participate in events, make contacts, create connections with other people who have been through or are experiencing the same difficulties as you. Each contact, each interaction, each business opportunity is a moment that will elucidate you and help you understand how to make it happen, but most of all, help you not to feel alone in this battle.
If you want to start your own business, start by investing your own money. Many are the entrepreneurs who start their own business with money borrowed by family, friends, acquaintances, or even banks. Most of the time, this may play more against you than in your favor. It’s a totally unnecessary extra pressure. It is something that does not make sense when you seek your financial and professional independence. If you want to be independent to create your own business, be it in its entirety.
Furthermore, borrowed money means debt. And regardless of the debt, you will always owe something to someone. When you have the opportunity to create your own business without having to borrow from others what you should have with you in the first place, you will be much more comfortable and never depend on anyone to make your own decisions. The reality is that when other people’s money is at stake, you never make decisions you want to make based on exactly that risk. And often times it is necessary to risk, necessary to invest, necessary to think ahead. If you are afraid of the outcome, you are not being an entrepreneur.
Obviously, this topic concerns entrepreneurs who have already put their business online and are getting important feedback from their customers. If you have not launched your business yet, this topic is probably not for you. But if you have already, stay tuned for feedback from your customers. The best concept proof of your business is your customers and the experiences they are going through. Adapt fast, make changes if necessary; grow based on feedback.
The internet is evolving at an incredibly fast speed. Those who do not adapt fast are left behind. This means that regardless of the type of business you have created or will create, you need to listen to your customers and give them what they actually seek. It is they who dictate the rules for the simple reason that it is for them that you work. If they are passing by any difficulty, or are looking for a product that does not yet exist, or are feeling frustrated with the experience they are having with your product, they are actually right. And you need to understand this quickly, move on and adapt yourself to those needs.
Lastly, one of the most commonly made mistakes is to search a lot and do little. When starting a business from scratch, especially your first business, there is a certain tendency of studying too much all possibilities, but never taking the initiative to grab one of them and start working on it. It is the same thing that happens when we are in our comfort zone, at our 9-to-5 job, and we daily consider looking for something more motivating. Rare are the times the action is implemented.
It is time to stop thinking, stop talking, stop staring and start doing! More important than thinking about what you want to do, is doing. Because an idea is worth what it is worth. A “.com” domain is worth what it is worth. A business plan is worth what it is worth. Basically, what counts are actions and what we create. Therefore, when you look at your treasure chest full of projects you have never accomplished, and start planning things you would like to do next year — and promise yourself that this year you are going to succeed — stop. It is time to stop fooling yourself and really start getting your hands dirty!