Every startup is different and needs startup business ideas, but often the mistakes are similar; in my case, here are the biggest mistakes that we made that allowed us to be stronger.
1) Hire the wrong people:
The heart of our company is its people; without our team, we are nothing. That is the number one reason that we started the development team in Peru. We got our first contract fast, and luckily it was for a Spanish company! Rushed hiring of a senior team member without proper validation led to a negative impact on the team.We ended up with a big problem with our client; in the end, this person charged us and didn’t even finish the job. We realized that the selection process is critical, and I ended up working with fewer people but committed people than an army that doesn’t help and work as they are supposed to.c
Also, over the last few years, we have hired rockstars (you can read more in another post that we have), but they didn’t like it, or they didn’t want to understand the company’s culture, and that’s critical, too! You must be smart to be in a company, but at the same time, you must fit into the culture; otherwise, it will fail, and that’s what happened to us; for that reason, we now invest even more in our people and explore innovative startup business ideas.
Understaing Legal, Accounting and Finance will be a great help for any startup.
2) Communication and culture:
Our small team of less than ten fosters seamless communication through shared work, meals, and social activities. So everyone was on the same loop, but it got more complicated as we grew. When you have more people, if you are lucky, everyone will be in the same country, so communicating is simple. Rapid growth can lead to a loss of focus on company goals, potentially hindering commitments and career progression. Seek ways to maintain alignment and clarity amidst growth.
3) Choosing wrong Clients:
No company will survive without clients, but this doesn’t mean you have to work with all the companies that knock on your door. Over the years, we worked with small, medium, and big companies, and of course, we have had our fair share of not-so-good clients. We have also had excellent companies that genuinely see you as a partner, not like some others force you to do whatever they want, how they want. After a couple of years, we were able to select and categorize our clients to have a better working experience (of course, we had to fire a couple of clients in that process), but that allowed us to grow better and protect our team… and also avoid psychiatrist bills.
4) Not preparing for the worse:
I like to use this phrase: expect the best, but prepare for the worst. At first, we had everything in place – estimations, sprints, team, and client commitment. Yet, we overlooked the possibility of things going wrong It could be something simple or profound, but something always happens. We have troubles with servers, Apple, AWS, internet; sometimes, even the client move dates or the client’s companies go bankrupt. Prepare to manage expectations better.
5) Building Products:
Like other software firms, we aim to create cool, widely-used products that boost the bottom line. We already had seven products, all of which failed for several reasons. Still, it was good because we learned so much about technology, management, marketing, product discovery, and others that were good. After all, they allowed us to differentiate ourselves from other companies.
6) Finances and payments:
This is a critical aspect because, in our case, we were only engineers, so no one knew much about finance or that legal stuff. We initially underestimated financial statements because we thought making a sale meant that you already had the money in the company’s bank account. Later on, this became severe trouble because you need to make a decision based on the company’s cash flow, and not everyone pays at the same terms, or even the way you charge could complicate the forecast and set up goals.
7) Partnerships:
It is a win-win; relationships are the key to growth, at least, we believe. We partnered with a US company despite our mistakes because we wanted to use their technology and attract interested customers. Well, that never happened- they only took our money! It happened multiple times, helping us learn how to work and find the right partner. Last year, we finally found the perfect partner for our startup business ideas! It was a long and painful process but worth it in the end.
There are many mistakes that fueled our growth and strength, but these are the biggest. Hope it helps!
