We’ve all heard the proverb that “hindsight is 20/20,” and the quote that “those who do not learn from history are doomed to repeat it.” (George Santayana)
The very nature of being an entrepreneur or starting your own small business means that you will be traversing uncharted waters. The key to avoiding traps and pitfalls is carefully and regularly reviewing errors that you and others have made.
Enter Brio expert Tom Berger to save the day!
Tom is a seasoned senior operating manager with an impressive resume. He was the CEO of seven start-ups with exits in excess of $260M and currently consults with start-up and private companies. He is passionate about supporting entrepreneurs and developed the foundational course “The Entrepreneur’s Roadmap” for Brio Business Academy.
I asked Tom to review the nearly 200 companies he has advised and share with us the most common pitfalls he’s witnessed, in the hopes that we don’t have to slap our forehead saying, “I wish I would have…”It doesn’t matter if the issue was personal or group-based. In the end, the entrepreneur or CEO is responsible whether it was their own error or that of their collective staff.
In working with companies, Tom loves to set the stage like this: “I want to help you make new mistakes and not repeat the many that I have made or seen over my career.” He’s personally made nearly half of the pitfalls listed below at some point in his career and he says from first hand experience, it’s not easy to recover!
So think of each item in these lists as a road hazard sign … a warning of what may be ahead. The warning sign tells you what to “watch out” for so you can alter course or take corrective action quickly.
MARKET PITFALLS:
- Didn’t fully understand the needs of prospects.
- Initial focus was on too large (and varied) of a segment of the market.
- Didn’t identify and record sales impediments so they could be addressed systematically.
- Rigidity of initial pricing led to lack of customer traction.
- Lack of understanding why competitors do what they do.
- Failed to better understand why some markets/applications have gone unaddressed.
- Didn’t hire local guides who knew other markets better than we did.
- Didn’t spend the time to understand and communicate the differential advantage that we offer.
- Our message was too complex.
CUSTOMER PITFALLS:
- Said yes to prospects that we knew were not equipped to support our product.
- Didn’t realize that customers do not have the same sense of urgency to change their existing methods/systems to implement our offering.
- Said yes to prospects that we knew we did not fit.
- Spent too little time understanding what it would take for customers to implement our product in their environments.
- Did not have a solid long-term distribution strategy.
- Did a poor job of qualifying customers and understanding their revenue potential.
- Spent too much time on proposals and detailed client work without a commitment from the customer.
- Pricing was not simple or easy to understand.
REVENUE PITFALLS:
- Too much focus on operations, not enough on revenue.
- Concern over revenue being profitable distracted owners from the importance of generating any revenue at all.
- Didn’t spend enough time developing a recurring revenue model.
- Didn’t spend enough time realistically forecasting sales and revenue.
- Proceeded before weighing revenue opportunity against cost – i.e., discerning if it would be profitable in the long run.
- Paid too little attention to terms, collections, and cash management.
PRIORITY PITFALLS:
- Spent too little time planning our roadmap, its requirements, and timing.
- Implemented complex and expensive systems before identifying long-term needs.
- Thought about how to scale the business too late.
TIMING PITFALLS:
- Too slow to get out the Minimum Viable Product and obtain independent customer feedback.
- Did not understand how long it would take to get to cash flow breakeven.
- Too quickly pursued national (out of area) opportunities.
- Did not spend time early on to better understand international product and business requirements.
DECISION PITFALLS:
- Did not carefully differentiate between what we “could” do and what we “should” do.
- Waited instead of following “gut instinct”.
- Partners were not selected carefully.
- Handled too many tasks internally rather than identifying what could be outsourced.
- Was slow to make tough decisions.
- Did not develop and stick to requirements documents to prevent creeping features and delays.
INTERNAL PITFALLS:
- Hired my best friend or relative.
- Did not hold people accountable.
- Raising money took longer than imagined.
- Trusted unverified sales forecasts and development plans.
- Too slow to make tough decisions about employees.
- Relied on being first to market rather than understanding our true core competence.
- Business focus was diverted from our core competence.
- Key business metrics were not developed.
- Did not create standardized processes from the start.
- Did not develop shared goals for everyone.
- Was not frugal.
- Did not understand that my business could not scale as an individual consultant.
- Didn’t plan for what it would take to provide ongoing support for custom solutions.
PERSONAL PITFALLS:
- Did not develop and maintain better work-life balance.
- Missed opportunities to thank people often and acknowledge their efforts.
- Was not patient enough with others and the business.
- Talked too much and did not listen.
- Showed my anger.
- Did not take time to reflect before reacting.
- Did not delegate enough.
- Did not review a list like this on a regular basis!
And very simply, that’s why Brio Business Academy exists. We’re here to help you avoid these pitfalls, because recovering from these mistakes is costly and time consuming. Unfortunately, we don’t know what we don’t know often until we see it in hindsight … and by then it’s too late.
