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The top three 'sins' of a startup

Over at the popular networking site LinkedIn one fella asked a very thought-provoking question — "What are [the] top three 'sins' of a startup, from your experience, one should avoid?"Here are some answers, in no particular order:- Failure to clearly define target customers- Not understanding your profit and cost drivers- Not having a clear purpose and vision of the company- No strategic business plan for success- Chasing the dollar vs. your passion- Too much debt starting out- Knowing the difference between making a mistake and adjusting one's course- Believing that the best technology will win- Underestimating the implications of your risks- Procrastinating- Failure to hire or retain top talent- A great accountantMy top sin is not defining your target customer. One should always ask, "Who and why would anyone want my product or service?" before proceeding. Debt control and a detailed strategic plan are important success indicators as well.What do you think are the top sins when starting a new business? What specific actions can help prevent one from committing them?
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  • Great discussion but I've got a mistake that trumps all those other mistakes combined and here it is: Failure on the part of the founder to recognize and compensate for their own weaknesses and blind spots!

    For some founders, wether growing concern or startup, an inability to recognize they even HAVE weaknesses means they're undone before they even get started. And I'm not talking about "I'm not good at math" so you hire someone who is ( good idea anyway ). I'm talking about you're not a big picture person but rather a detail person. Then you need someone with big picture Ying to balance out your detail oriented Yang.

    There is nothing worse than seeing someone with entrepreneurs disease who can't get out of their own way.
  • Dear dot org:

    Good question!

    Each medium has its own pros and cons.

    I specialize in showing independent operators how to market their
    restaurants without, as I say on my blog, losing their shirt....or pants.

    I try to show them how to use leverage with technology (like the Internet, for example) combined with common horse sense and proven-over-time marketing methods that work without costing an arm and leg.

    Keep in mind, that "advertising" is NOT MARKETING.

    Marketing includes advertising, plus a hundred other things...and more....

    Yes people are sick and tired of intrusive and invasive media advertising. That was the best we had for a long time; but the Internet is catching up fast. it is revolutionizing how restaurants are marketed.

    If I still owned a restaurant, i would spend next to nothing on what we used to call the 'major media' (television, cable, radio, direct mail etc.) and concentrate on many other ways of communicating my message...ways that are interactive, that do not include talking AT you, instead of WITH you.

    Marketing doesn't get ineffective. Advertising does.

    However, some media/methods the marketing communicators use certainly do get very old.

    When radio came in, the 'experts' said newspapers were dead. When television came along, the pundits said that the days of radio were numbered. Then along came FM radio, audio cassettes, then Betamax and VHS video cassette recorders, CD's, DVD's and then....the Internet and other neat digital wonders. All the pundits were wrong. They always have been.

    Media never dies, it just gets used less, worn out and less efficient or effective.

    It's like the expression: "have a nice day". All of us know that that is just a cliche; a hackneyed expression that is meaningless. The person uttering this phrase is acting like a robot or automaton. The original sentiments of the expression are now lost due to familiarity and commoditization of thought and action. 'Hollow sentiment, at best.

    We know in the restaurant business that if you cease saying "have a nice day" to your guests, and instead say something like: "hey....thanks for stopping by!" or "Hey, thanks for coming by today!" the customer will stop in his tracks, turn around and look at you and openly wonder if you really meant that.

    It's new, different, and brimming full of positive meaning.

    That is what the new medium the Internet -- and other digital secrets -- will do for any restaurant's marketing. They will spruce it up, make it new again, and cause it too...to be brimming with positive promise...of good things to come.
  • I did see your post yesterday, and I did think of it when I wrote this.

    Sometimes I wonder, however, if at some point people start tuning out all the marketing... I once heard that Americans would accept a lower quality of life if 1/3 of all advertising and marketing was cut out from their lives...

    At what point does marketing become ineffective?
  • If you check out my blog post on FohBoh yesterday, you'll see that your first comment: "failure to clearly define target customers" is right up there on the top of the list....as you have it.

    If you don't know who to target your offerings to, you will be using a shotgun, trying to target everyone.

    You won't stand a chance doing that.

    I talked with someone just this morning who has a restaurant owner-customer who told him he had been in the restaurant business for 30 years; and he had never seen it this bad: food costs escalating almost weekly, people using brown bag lunches, scarce labor, gasoline costs, lay offs, foreclosures, you name it.

    I have been in this business for slightly more than 40 years; I have never seen such a negative confluence of factors, (all affecting the entire economy), like what we have now either.

    None of this bodes well for the food service and restaurant business, especially my passion and primary focus, the independents.

    Independent operators don't have a head office corporate marketing department on which to rely. They don't have the time, money, patience and just plain sophisticated 'know how' they need to effectively compete with the chains.

    Marketing is their answer.

    Actually, it's every one's answer in this mess.

    If you can't figure out who to appeal to, what to sell, where, when, why and importantly...HOW to sell...then you might want to look at alternative industries where perhaps you have this marketing expertise.

    Otherwise, keep reading ideas, tips, concepts, secrets and "how to" information here at FohBoh.

    It's free!
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