9 out of 10 ways of Rizq can be found in business - Prophet Muhammad

The Number 1 Startup Mistake

Dr. Loarraine

I’ve been working for almost twenty years now with people trying to get new ideas for start ups off the ground. That includes undergraduate and postgraduate students from business schools and the sciences, as well as a variety of people from the wider public who come into ‘boot camp’ weekends and start up accelerator events. Some people are successful, but others are not. Of course they always learn from their experiences, but I always feel it’s a shame when people come in with poorly formed ideas that are unlikely to ever get off the ground. I find myself thinking that if only they had done a little more preparation, they would have got more out more out of their efforts. Of course there are many reasons why a start up idea might not result in a new venture, but one of the biggest is Building Something Nobody Wants, as pointed out on this site http://www.slideshare.net/100FirstHits/startups-infographics

Why does that happen? I’ve looked at this using the well-known PESTLE analysis model:

  • Politically, there are high barriers. I’ve seen people with some great ideas, particularly around social enterprises, where there could well be useful social value. But the problems are often complex and there may be many existing agencies at work. The chances of a small venture overturning the status quo are very small and these ideas usually remain at the level of an activist group.
  • Economically, the idea may solve a problem or meet a need – but people just aren’t willing to pay what it would cost to deliver the idea to any reasonable standard of product or service.
  • Socially, the idea may meet a demand, but may clash with social norms or ethics – particularly where young or vulnerable people are involved, or there are hidden health and safety issues.
  • Technologically, because something CAN be built, it doesn’t mean people want it. Ideas in this category are sometimes called ‘solutions looking for a problem’, or a said to be a ‘tech push’ with no ‘market pull’.
  • Legally, your idea could run up against regulatory issues – there may be laws working against you. Sometimes these are obvious, but other times, less so; for example, when you export or operate overseas, there may be quite unexpected obstructions.
  • Environmentally, you may not set out to damage the environment, but there may be hidden costs that stack up against you, around waste disposal for example.

Many, many ideas are seductive and exciting when you first think of them, but there may well be rocks under the water from the above list. Don’t go too far down the track before you find them.