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Telling the stories of startup founders and creators and their unique journey. Each episode features actionable tips, practical advice and inspirational insight.
00:00:00:00 - 00:00:35:27
Welcome to the Founders Journey podcast. Inspiration education for Founders by Founders. I am Greg Moran. I'm a multi-asset founder, third VC at Evergreen Mountain Equity Partners, and I'm host of the Founders Journey podcast. And today we're going to tackle a really critical topic. And that's why so many startups fail in the early stages. Unfortunately, when you invest in startups for a living, you see a lot of failure along the way and a lot of good learnings along the way.
00:00:35:27 - 00:00:57:12
And the good news is that most of those failures can be avoided. So in this episode, I want to break down the most common mistakes that I see early founders make and then, more importantly, how to actually avoid those mistakes before it's too late. So to start us off, the first mistake I see is a real lack of focus.
00:00:57:14 - 00:01:28:08
Now you think founders pretty focus group, right? But it's not always the case. They often really spread themselves too thin. They want to launch multiple products, or they want to enter multiple markets, and they want to do it all at the same time. But the truth is, early on, focusing is your greatest asset. So focusing on one product, focusing on one market, focusing on one problem, you have to get really clear on where you're going to focus, and it can become your greatest strength if you do it well.
00:01:28:10 - 00:02:02:12
So founders who master one thing before they start expanding are the ones who often succeed. And I can tell you, founders who spread themselves too thin and try to do too many things at once, it just doesn't work. So the second mistake is ignoring customer feedback. But a lot of founders become so attached to their original idea it's their baby and they resist change, even when customers are telling them what they need to know or what they need to do.
00:02:02:14 - 00:02:34:10
Successful founders listen really carefully to customers. They don't take it personally. When a customer says, hey, your product is not perfect. It's not really doing what I needed to do, but I would really like it to do this other thing that should not be offensive. If you hear consider instant feedback. It's a signal that you need to pivot, even if it's uncomfortable or even if it flies in the face of really what you had strong conviction was the right way to go.
00:02:34:13 - 00:03:02:28
So the third mistake is actually scaling too soon. We get some early indications. We've all seen this in companies. Once they start to see a little bit of traction, a little bit of traction, they rush to scale. But scaling too early before you've really established product market fit or stable cash flow leads to disaster. Right. It's too early in the life cycle of the business, and the business can't handle the growth.
00:03:02:29 - 00:03:29:07
You've got to be fighting from a solid foundation before you scale. Otherwise, all you're going to do is magnify existing problems that already exist within the business, whether you want to admit it or not. So finally, as our last kind of common mistake, poor cash management, this is a huge reason startups fail. The founders don't have a strong grasp on their cash flow.
00:03:29:14 - 00:03:57:28
They don't really understand the financial model, and they assume that fundraising or revenue is going to solve all their problems. But that's a really risky bet, especially fundraising, right? You need to know your numbers, and you need to always keep a cash cushion for emergencies. Poor cash management can take down even the most promising startups. Unfortunately, I've seen it happen over and over again to really avoid early failures.
00:03:58:00 - 00:04:25:07
Focus on one product list. Keep it focused. Listen to your customers. Scale at the right time. When you've really established product market fit and manage cash flow carefully. Building financial models is not just the exercise of VCs. You know, as an academic exercise. It's something you've really got to be thinking about. Get somebody in there can help you manage the cash and manage a financial model.
00:04:25:09 - 00:04:48:27
These aren't just survival tips. They're essential for long term success. They'll not only keep you from failing, they'll also help you succeed. So for more advice on how to build and scale your startup, follow me for insights and tips. Hope you like this video! Click the notification button so click the bell to be made aware anytime we post a new video.
00:04:48:27 - 00:05:11:23
Leave comments. Leave questions. Love to see him in the in the comment section. And we're going to. We'll answer as many as we as we possibly can and subscribe to the Founders Journey podcast. To continue to get really, great information for high growth founders and leaders. Good luck.