6 Mistakes that Kill Early-Stage Startups

Written on 14 June 2021
Reading Time: 3 minutes 55 seconds

Growing a startup can be quite an exciting journey for you as the founder but this usually comes with a steep learning curve as well.  It is understandable that your top priority is to turn innovative ideas into a business reality and to develop such ideas into products and/or services that will eventually lead to the growth of your business.  

However, turning ideas into a growing business can be a tricky juggling act for an inexperienced founder who must also cope with having a modest startup budget and limited available resources.  

Keep reading, if you are curious to find out exactly what mistakes can kill an early-stage startup and how you can avoid them. 


Many startup founders start off with a grand vision in mind and often get so excited and obsessed with their ideas that they get thrown off the rails from trying to do too many things at once without a tactical plan. By the time they realise that they have been running around in circles and not been achieving anything, they would have already squandered away precious time and resources.

As a founder, you are the visionary who understands your goals and has a plan on how you would like to achieve these goals. This vision must be clearly set out in a structured manner with the milestones and timeframe communicated  well to the team throughout the organisation for implementation and execution.    

Having a clear vision is your lighthouse which will navigate the path for you, guiding you nearer towards achieving your goals.  You are then able to motivate your team and spur them on further upon completion of each milestone.


Time is of the essence. Whilst it is important to strike when the iron is hot, the wrong timing may kill a startup. A quick “pre-launch” event will force you to complete your product and bring it quicker to your target audience. By doing that, you are giving yourself more lead time to gather feedback, so you could improve your product offering and stay competitive.

However, launching too hastily may present unexpected challenges especially if the product is not well tested. You may put your brand reputation at risk with negative feedback from customers. 

The timing for development and completion of the product and/or services is important but finding the right time to launch your product is extremely crucial.  For example, some products or services are good to launch before a festive period, and sometimes the holiday seasons may not be optimal to launch certain products or services.


The fact is that many solo founders are also non-technical but this is not to say that the fate is sealed completely for startups with solo founders or non-technical founders. Of course, there are examples of successful single founder companies (such as Tumblr and Plenty of Fish) and those with solo founders who are non-technical (such as Jack Ma of Alibaba and Bryan Johnson from Braintree). 

Being a solo founder, you wear all the hats. With a team of co-founders, there is division of roles and responsibilities. With the right co-founders, the jobs get done better than you having to do it all by yourself. A strong team is one of the key success factors when the company is raising funds. Some investors feel that a strong team with a weak idea is better than a weak team with a strong idea. For example, a startup with 3 co-founders will certainly be having a combination of more connections than a startup with a solo founder.

Companies with several co-founders make decision-making much easier because the brainstorming sessions for each proposal or idea can bring out different perspectives and generate solutions from multiple angles.


Recruiting is one of the most important responsibilities a startup founder has. There is no room for hiring mistakes because a startup is always racing for time to turn an idea into a product and bring it to market quickly.

A successful startup does not begin with an innovative idea but with recruiting the right first hire. Often, the founder recruits on a resume and goes for the person with the most impressive track record, overlooking the fact that your revenue cannot support this recruitment. For an early-stage startup, the focus is usually to look for someone that can get the job done when you should really be looking for a key hire, as though you are looking for a partner who shares your vision and can help you build your startup.

Perhaps it may be more worthwhile if your initial investment is to hire a HR consultant for an hour to guide you on the selection process.  The right HR consultant will help you evaluate your candidates to suit the unique requirements of your startup.


The fifth mistake that kills an early-stage startup is the mismanagement of funds that leads to the company running out of cash. Some founders believe that they should spend money to make money. They overlook one of the most important rules of any business – get revenue first and only spend money if you start to make money. 

While the product is being developed, there is a need to conserve cash and not to hire lots of sales and marketing staff in anticipation of bringing the product to the market. To attract and impress investors, founders may cause a fast burn-rate with premature spending on branding while the product is still in its finishing stage. Without the cash to carry the startup to a milestone, the fund-raising exercise will not be successful and may threaten the survival of the startup.


A weak management team is another cause for startups to fail as it usually does not have a strong strategy, which leads to poor implementation and execution of strategic plans. Often, the founder does not realise that his management team is weak and feels that they just needed more time to grow into their jobs. Additionally, he or she may not realise that one does not have the luxury of time to develop and bring a good product to the marketplace, ahead of the competition. This lack of foresight leaves his management team with no time to learn from their mistakes.

Time and money are both finite resources, thus it will be prudent for a startup to seek out experts in the relevant business areas and outsource these areas to experienced professionals. At first go, it may seem costly to engage the services of a professional manager or business advisor for an hour, when for the same cost you could just recruit a full-time employee for the whole day. In reality, poor decision-making and employing staff to perform work beyond their capabilities are even more costly. A professional is someone who is able to advise you of the right product strategies, identify critical issues before the shit hits the fan and act as your personal beacon for charting the course of your startup. By choosing to enlist one, you could be giving your startup a new lease of life!

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