10 Fail-safe Tips for Start-ups

Here are ten start-up tips to fail less, learn more, and preserve your sanity.

Don't get caught up in business titles.

Every start-up thinks of becoming a corporation (or selling out for billions to one). But adopting a corporate type of approach in managing a small business is not suitable. You need to build a customer base, not just take part in committee meetings.

“Build it and they will come” is a myth.

The truth is, nobody cares about your product more than you do. You need to acquire a customer base to become profitable. 

Be pragmatic.

Saying everybody is special is the same as saying nobody is. Focus on one product or execute one idea. Abandon features that won't make profit. Acknowledge that there are circumstances beyond your control but don't give up easily.

Allocate financial cushions.

In the early stage when you're high from determination and the freedom from your soul-sucking day job, it's easy to have a tunnel vision on profit. Entrepreneurs often fail to realise that it will take more than a year (or more) to break even. Make sure that you have enough working capital, maintain a cash flow, and have buffers for potential financial losses.

Delegate wisely.

Offshore staff leasing is a practical way to hire employees. But if you treat your remote workers as temps, they're not going to last long. Recruitment and training are time-consuming. Offshore outsourcing is cost-efficient but you will still get what you pay for.

Hold your cards closer.

Doling out equity and stock options sounds like a good idea to get experts onboard. But many people who join start-ups either have ambitions of their own or have one foot out the door in case it bankrupts to oblivion. Wait for 2-5 years before giving any stake of ownership to make sure that they're really invested in your business.

Keep it simple.

Features can give you a leg-up from competition but it can easily complicate everything. Keep your product simple and straightforward. It'll be easier to make, sell, and distribute.

Replicate better, not imitate cheaper.

One of the most often used business tactics is to replicate a product or concept. Not a bad move, unless you peddle it for cheap in hopes of scoring easy cash. You need bigger profits to cover all the expenses you made to sustain a business.

The practical way is to make something better of what's been done before. Google improved online search through PageRank, Facebook made a more addictive social network through the “wall”, and Apple changed the portable music market with iTunes. 

Build now, improve as you go.

Unless you manage to borrow a crystal ball from the powers that be, you won't be able to create a perfect product on the get-go. You'll never know what clicks until it’s out in the market. Build an adequate product, execute a brilliant marketing strategy, and use customer feedback to improve features.

Don't waste time on competition.

It's natural to look at your competition. But if you keep chasing them or worse, copy whatever cool thing they're doing, you're just doing them a favour. It distracts you from improving your own product.