Are You Making These Business Mistakes?

Too often you hear about successful entrepreneurs creating multi-million and billion dollar companies. The reason this is bad is because no one really talks about all of the companies that didn’t do well, so you’re left with a false hope that you too can create the next big company.

According to the Small Business Administration, only 44% of new businesses last more than four years. In addition to that, 60% of businesses are either losing money or are breaking even.

So let’s face it: neither you nor I are going to create the next big company. But we can try. To help us in our quest, I asked ten successful entrepreneurs, who have all created companies that are worth at least fifty million dollars, what their biggest business mistake was.

Even if you are not going to create the next multi-million dollar company, it doesn’t mean you can’t learn from the mistakes successful entrepreneurs have made.

Here are the mistakes you need to avoid if you want to increase your odds of succeeding:

Alex Algard

alex algard Alex Algard is a serial entrepreneur and angel investor. He founded WhitePages as well as one of the most popular car websites on the web, Car Domain. In addition to running those two companies, during his spare time Alex likes giving back to the entrepreneurial community through his blog.

As WhitePages went through a phase of extreme growth about four or five years ago, we set the wrong hiring standards in certain parts of our company. We focused too much on specific skills and too little on fundamental abilities, raw talent, and passion for our business. A couple of years thereafter, we went thru some gut-wrenching people changes as a result of that. In retrospect, hiring rapidly was too easy, and it should have been a giant red flag to me. I’ve learned that in good or bad times, hiring should always be difficult.

Brian Lee

brian lee Brian Lee co-founded LegalZoom, which provides great legal services at an affordable price. In addition to LegalZoom, Brian also co-founded Shoe Dazzle with Kim Kardashian.

Although I have made plenty of mistakes, one of them taught me more about the success of a business than others. About one year into running LegalZoom.com, we had the opportunity to make a software in the box solution for our service and to sell the software to large retail outlets. We were scarce on resources and money, but we decided the opportunity was large enough to design and build the package.

It was a disaster. We made the software, created beautiful packaging, and received a few orders for the product. However, it took so many resources that we lost focus on what our core service was (providing legal services online) and almost did not make it through.

The lesson I learned was to keep a laser focus on your core service until your core service does not provide for enough growth. If your core service is still growing at a good pace, keep focused on it. All the other partnerships, new verticals, new products, etc. are meaningless if you don’t build a very solid foundation of your core first.

Dharmesh Shah

dharmesh shah You may have heard of Dharmesh before as he owns a popular blog called On Startups. But Dharmesh isn’t just a blogger. He co-founded Pyramid Digital Solutions, which was later acquired by SunGard Data Systems. In addition to Pyramid, Dharmesh is also the co-founder of the Hubspot.

The biggest mistake I’ve made as an entrepreneur is being too dependent on a large, strategic partner. With my first startup, I was in an industry that was dominated by a large, powerful company. Early in our startup’s history, we forged a partnership with them. Over the years, it was a roller coaster ride with them. Sometimes we were partners, and everything was good. Other times, they saw us as a competitor, and life was hard.

The big downside to having too much dependence on another company is that it limits your ultimate growth potential. If you grow too fast or too big, you become a threat. Whenever possible, entrepreneurs should control their destinies and work in industries where it’s not mandatory to have the blessing of the 900-pound gorilla.

Glenn Kelman

glenn kelman Glenn is the CEO of Redfin, which is one of the largest real estate websites on the web. Prior to Redfin, Glenn co-founded Plum Software, a publicly traded company that created the enterprise portal software market.

The biggest mistakes are always bad hires. I also get into the weeds too often. Entrepreneurs tend to be perfectionists – folks who wear plenty of different hats. That can make you tough to work for and limit the talent you attract to the company. You have to be confident in your point of view about the company’s overall strategy and values but then give folks the latitude to do their jobs.

Every day riding home from work, I think about where the line should be and whether I was on the right side of it. I think about whether someone working for me even really knows what I want. I can be inarticulate about our most audacious goals because it seems unfair to even ask for what we really need to do. But that’s  exactly where you need to be clear.

Kamran Pourzanjani

kamran pourzanjani Kamran Pourzanjani is the co-founder of Pricegrabber. He sold it to Experian for around 485 million dollars. Unlike most of his competitors, he only raised 1.5 million dollars to create that large company. In addition to being the co-founder of Pricegrabber, he is also the co-founder of a new startup called Bestcovery.

Though we all want to avoid mistakes, there is almost no way to get around them when running a business, particularly a start-up. One of the biggest and most common mistakes entrepreneurs make, which I have been guilty of myself, is not taking fast corrective action in dealing with a bad hire.

No matter how careful we are, how many interviews we do or how many references we check, making a bad hiring decision is almost inevitable. The problem, however, becomes much larger when we are too slow in correcting the situation, i.e., terminating the employment as soon as possible. We keep telling ourselves that the person is new, they will kick in soon, they need more time to adjust, etc. But this more than likely is wishful thinking rather than reality. If the person does not fit in the organization within the first couple of weeks and is not doing the job, then it’s in the best interest of the company and that employee to cut that employee loose as soon as possible and focus on finding the right person.

Keith Smith

keith smith At the age of 27, Keith founded Zango and grew the company to around 78 million dollars in yearly revenue. Currently, Keith is working on his new startup Big Door Media, which helps websites monetize.

The biggest mistake I’ve made in business was to allow myself to get too far removed from my customers. In my last company, we experienced rapid growth, going from $2 million a year in revenue to over $50 million in just two years. During this time, we scrambled to build up infrastructure, hire quality employees, make sure we were financed correctly, manage board and investor expectations, and retain a great corporate culture. All of these things were important, but I allowed them to get in the way of me spending time directly with our customers. I surrounded myself with extremely talented people, and then I convinced myself that the company was better off if I let them interface with customers, while I focused on CEO duties.

The net result was that the needs of our customers shifted, and I didn’t see it coming. The business continued to grow, but the underlying cause for our growth stopped long before our growth actually slowed – and by then, it was too late for us to retain our leadership position.

My lesson learned was that while it is critical to hire talented people that you trust, that is not a valid replacement for the CEO spending significant amounts of unfiltered time with current and prospective customers.

J.R. Johnson

j.r. johnson J.R. was the co-founder of Virtual Tourist, which was acquired by Trip Advisor. Currently, J.R. is working on his new startup Lunch.com that connects you with other people who share similar interests.

The biggest mistake I’ve ever made was having too much trust. Being a start-up entrepreneur, it’s easy to get impressed by someone more established or experienced, especially if they are coming at you with a large checkbook. That’s natural and it’s fine, but don’t inherently trust them.

I let my guard down and trusted someone who approached me to buy my company. I even signed a term sheet with them based on that trust, and that was my biggest mistake. During due diligence, I learned a lot about them and their business, and I decided not to sell them my company. They sued me and tied me up in a frivolous lawsuit for almost three years. It cost me hundreds of thousands of dollars in legal fees and countless hours of wasted time. I was 100% victorious in the end, but it was a hollow victory because I’ll never get back the time I spent fighting that company. Just to clarify, this buyer was not Expedia/TripAdvisor, who actually ended up buying my company many years later.

To make my mistake even worse, I’m a lawyer, so I should have really known better. My advice: be especially cautious of anyone who brings trust into the equation to pressure you into doing anything.

Joel Comm

joel comm Although many of you know Joel as a New York Times best selling author, he was the founder of Classic Games. The company was later acquired by Yahoo, who then used it to create Yahoo Games. He also created the The Next Internet Millionaire show.

My biggest mistake has been hiring the wrong people. I’ve seen too many people whose walk does not match up with their talk, and it’s ended up going bad. The most difficult and painful scenarios are when you hire someone you thought was a friend only to discover that they have used and manipulated you. It’s a primary reason that I have pledged to not go into business with close friends ever again. My friendships are very important to me, and I do not want to risk them by entering into a business relationship.

Patrick Gavin

patrick gavin Patrick Gavin was the co-founder of Text Link Ads, which later got acquired by Media Whiz. In addition to Text Link Ads, Patrick has invested in a handful of other startups, and he is currently working on his next project, DIYSEO.

The biggest mistake I have made is not investing in my own business. With our Text Link Ads business, we relied heavily on viral growth, advertising, affiliates, etc. We had one great sales guy, but because of our success in marketing, we had more leads than we could follow up with properly. Shortly after we sold the business in 2006, the purchasing company quickly added five new salespeople to the team, and the business doubled in size within 12 months. Millions of dollars were left on the table by not investing in sales sooner.

It may not be sales that your business needs today. It could be more customer support, more advertising, more content on your website, a better domain name, etc. There is some way you could be investing money back into your business today that could lead to more growth. If you don’t do it, your competition will.

Tony Hsieh

tony hsieh Tony Hsieh is a serial entrepreneur and investor. He is well-known for investing in Zappos as well as being the CEO. But before Zappos, Tony was the co-founder of LinkExchange, which sold to Microsoft for $250 million.

The biggest mistake I’ve made has been with hiring the wrong people. I think if you add everything up, including the cost of bad decisions, additional bad hires made by the original bad hire, and missed opportunity costs, bad hires have cost Zappos over $100 million.

Hiring is never a perfect science, and I’m sure as a company we’ll continue to make bad hires. But over time, we began making fewer mistakes and became better at correcting our hiring mistakes more quickly.

Conclusion

As an entrepreneur, you have hopes of creating a successful company. Although at certain times it may not seem like you will ever get there, you will as long as you keep on pushing forward. Even if you make big mistakes like some of the entrepreneurs above did, you can still succeed.

The best way you can improve your odds of success is to learn from other people’s mistakes and try not to create that “big” company when you first start. Your first goal should be to create a profitable business. You can grow from that point on. But the key is to not get ahead of yourself.

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Comments

  1. This is a question I’ve asked nearly every entrepreneur, successful or not, that I’ve met. I was involved with quite a few mentoring programs through SDSU and was lucky enough to meet quite a few Fortune 500 CEOs of entrepreneur founders of various companies. Learning about their biggest mistakes / learning experiences was priceless.

    Hiring seems to be a pretty big trend in this blog post. I agree.

    However, a HUGE trend that I heard from so many entrepreneurs was to keep your personal life in check. i.e. make sure to make time for family and the people that love you. Don’t get so caught up in “work” (even though it’s a passion for us entrepreneurs) that you forget to “live”.

    Just thought this should be mentioned, as it was a life changing experience to hear this coming from some of the most successful people I’ve ever met. This was (for a few) their biggest regret. Huge life lesson for me and felt lucky to learn it at such a young age.

    • Well good for you… most people aren’t able to go through the experiences you were fortunate to go through. Thanks for sharing that with us. Always keep those people close because they help you LIVE your life.

  2. Its also interesting to see that most of the bad mistakes from these entrepreneurs are of the human resource/hiring kind. From personal experience, I can relate to how bad hires can hold a company back. Unfortunately (or fortunately?) I have not yet gotten to the point of having to hire managers yet, so I haven’t experienced those kinds of bad hires.

    • Hiring is obviously a big reason as to why many people are hit hard in their business. Just like you said, it could be fortunate or unfortunate based on you moving forward and overcoming that obstacle.

  3. So much knowledge from successful entrepreneurs. We definitely need to focus on where our business is at the moment. Of course we should be looking forward, but let’s not lose track of the present – or there will be no future.

    • Well said… if we lose that “laser-like” focus, then our foundation will begin to crumble and the basis of what started it may not be able to hold what you’re trying to build.

  4. Hmm… I’m surprised that ‘bad hires’ is the biggest mistake that most of these entrepreneurs have ever made. I’m happy I read this article prior to making hires.

    One of the things I love about this site is that you always provide advice from people who know what they’re talking, whether it’s from you or from someone else. Thanks, Neil!

  5. Nice Neil! Did you get in direct contact with all those people or did you just find that information on what their mistakes were? I see the biggest mistakes were made in the hiring process. Good to know for the future.

    Thanks,
    Brian P

  6. Good to learn about their mistakes. I see hiring and choosing partner can be great problems…

  7. Great post Neil, i am not surprised at the most common error here is ‘bad hires.’

    I find that at times when bringing in new recruits for my businesses i get an array of bad applications and then when one shining light appears, rather than wait, wait and wait some more… i offer them a chance.

    Hiring is an important part, just like building the bricks to your house. If you don’t hire the right person for the job, your house can cave in at any time.

    Luckily i don’t wait around to find out.

    All the best guys!

    Luca

    • It becomes a significant part to the structure of your business. Even one bad apple can cause the rest to go rotten.

      • I think people evoke resonant behaviour – whether performance or attitude – from those around them. Your comment, Neil, reminded me of this older post by Kathy Sierra:
        http://headrush.typepad.com/creating_passionate_users/2006/04/angrynegative_p.html
        Essentially, negative and angry people are bad for the brain. If someone doesn’t fit with the corporate culture, they will pull others down like a sinkhole.

        This also feeds into the premises of two well-known books. In “The Mythical Man-Month”, Fred Brooks’ addresses the fact that all workers (of any position) are not created equal, and good workers are worth their weight in gold. Also, in “The Peter Principle”, the author puts forth a bell-curve for competence – whether in terms of performance or assimilation – and argues that it is not just the incompetents who get the sack. Rather, overcompetence can be equally bad. In a startup, both can lead to subpar performance. The incompetent is subpar because they can’t. The overcompetent tend to be punished for their success and are asked to perform to the breaking point – thus illustrating the Peter Principle.

  8. Over and over again, we see these great guys mentioning hiring as their top priorities. It’s truly surprising but in a good way. I am also interested in knowing their “most critical step” when they took their first step toward entrepreneurship: what triggered them to take that step and how they took the action, including their first line of code, first sales, first contractor hires etc. etc. Thanks!

    • What triggered them was the pain in knowing that if they didn’t quick “change”, they would be facing a huge financial decision that they’ll need to quickly make… to move forward or close up shop. That alone motivated them to act quick.

  9. Very very enlightening…. informative…. thank you very much

  10. Inspiring to know I’m not the only one whose made a TON of hiring errors. It seems like 80% of those mistakes are all hiring related. It’s seriously the hardest part in business, hiring the right people to make things happen. You can learn the art with enough errors, money, and time consumption.

    I like how you got this data from 10 really successful folks. The thing I don’t like is:

    “So lets face it, neither you nor I are going to create the next big company.”

    Cheer Up, Neil :-)

    Optimism can go a really long way.

  11. I guess I agree most with Kamran. Of course you are never going to completely avoid a bad hire, no matter how well you try. But as Warren Buffet had once said, one should not stick with something for even a minute if s/he knows that s/he can not stick with it for the next 10 years.

    So the bottom line is that if you know you have unfortunately hired a donkey, don’t try to beat it up and make a horse out of it. Rather, ditch the donkey.

  12. Bad Hires! Oh my! That’s really enlightening to me. Although I am well aware that hiring and firing is a costly activity, I didn’t know that it has that impact on the business that almost all the people you interviewed see bad hires as the biggest mistake they ever did.

    But the thing is, they did not point out what should be done to circumvent this. Or at least, you did not write what they said. My question is, can we prevent hiring the wrong person with all the interviews and character references?

    I agree with Alex Algard, fundamental abilities is more important than specific skills.

    ria irish

  13. Sounds like Jim collins – Good to Great – get the right people on the bus – and the wrong people off. Couldn’t agree more – passion is more important than skill in many ways.

  14. Such a superb information from you.

    We can learn from this that what should we have to do to grow business more and more and more……….

    Thanks Neil

  15. Thanks for your information. One should learn from their mistakes and avoid own mistake.

  16. Taking your customers for granted is a huge mistake. I think that’s the under-current in many of these lessons learned above.

    and it’s also very humbling to see these guys say it as it is – no BS and no sugar-coating.

    Great work, Neil.

  17. Wow. I’m not very surprised by how important hiring is, it’s just interesting to hear it mentioned over and over again.

    Looks like Jim Collins was onto something.

  18. Lessons sound similar to the ones in The 51 Fatal Business Errors and How to Avoid Them by Jim Muehlhausen

  19. Another great line up of quality entreprenerus Neil, and a great post. Lots of lessons and some commonality too. Imagine that?

    Thanks Joe

  20. Great post! Though was not able to relate to it completely, this has made me realized that I am really a small entrepreneur because most of the issues discussed above have not come yet in my start up.
    Profile os these people is really very inspiring.

  21. I am sure all of them must have learned from these mistakes and flourished more.

  22. I thought the article was a little shallow. Sorry Neil I generally like your posts. The most interesting part was knowing the background into each entrepreneur. Other then that it was a lot of repetition of “bad hires” advice.

  23. My follow up question to the “bad hires” issue is, “What is a bad hire, and how could you have foreseen that that person would be a bad hire?”

    • First you must understand who a bad hire for you company would be. A bad hire for one person can be the exact fit for someone else. To find a bad hire, ask more questions.

  24. So true on the hiring part. I do have to say, we’ve been blessed with good hires. We had rigorous interviews, and stuck with a guy who pulled through. Listening to your team is crucial, so make sure you have open lines of communication.

    Thanks for the great post Neil. Keep up the good work.

  25. Fantastic advice from Brian Lee. I have failed a few businesses and the root cause was always based in “losing focus”. If you do not remain focused on your core value proposition, you dilute your skills and your clients no longer receive the maximum benefit from your product/service.

    I am finally having success in business and I attribute it entirely to staying focused on my core skills/offerings.

    Neil, I’m very glad I “Stumbled” across your blog. Some fantastic reading material here. Keep it up.

    Justin Popovic

  26. I have to agree with Justin who replied before me. I’ve been working on a large project for 3 years, and we had to switch gears after two because we had too many good ideas and were trying to implement them all. Now we are more focused and letting our potential customers and users make the decisions for us. I now know ideas can be toxic.

    Perfect timing with the “bad hires” bit. I’m in the process of interviewing new employees. Luckily in this economy we can afford to be a little picky with so many people looking for jobs.

    Startups are an uphill battle and it’s good to know that every success met serious resistance before breaking through. The endurance challenge gets the better of me at times.

  27. Hiring is often hard because many entrepreneurs treat it like the poor stepchild of the executive team. A strong HR VP should be the 3 or 4th hire in any start-up. I am a little surprised by the inclusion of Zango and Kevin Smith given the rather spectacular way they flamed out.

  28. Seems like most times, it comes down to people. Hiring the right ones and then focus on the right ones (customers). By not loosing sight of who you are trying to serve is key. I really enjoyed reading about the different issues that each of these entrepreneurs had to address. Thanks.

  29. Interesting post, I enjoyed reading the stories of sucessful entrepreneurs.

    However I find this line very interesting: “So lets face it, neither you nor I are going to create the next big company” How do you know that? If anything seems to me like those that read your blog are probably the most likely to do just that.

    I’m currently trying to get Venture Capital but the project I’m currently working is projected to be a $100 million per year company using very reasonable estimates and stastistics I’ve found. So while I’m sure it’s going to take a while an adventure, I’m hoping to prove you wrong :)

  30. David Siedlecki :

    Great post! These kinds of lessons learned can be very useful. This just highlights why the cliché “It’s hard to find good help these days” will always ring true regardless of what era “these days” is in focus. I think experience is key when targeting good people and appropriate talent for positions. A good recruiter will know how to look beyond impressive resumes and fancy answers to interview questions. There is no replacement for a good worker who is always willing to work hard, has common sense, is respectful, and is well grounded.

  31. I really liked the lesson that Brian Lee gave. Focusing on your main business, investing time in that, and doing that well, seems like really good advice, especially for a business that’s just starting out, where you may be tempted to head in other directions all at once. It fits with what Patrick Gavin said too, about investing in your own business and making the most of your strengths.

  32. ok, i get it on the hiring, but lets talk about specifics, for instance testing, minimum competencies, what do they read [you are what you eat] what is there passion. Separately, to put this in context, i invented something, the VC called me yesterday and said yes, seed level plus change, 10% equity, 10% debt, full vestiture up front, 2M sigining bonus, 10M front end, 400M guaranteed w/ tranching to be determined [beginning of negotiation]. Now I have to hire, they want a business plan, obut are willing to pay for it out of the 10M based on value of IP. It is like Bell and the telephone. I have a separate business plan for a separate industry that can be modified, complete with all line items for corporate office set up, with all standard rollups by years 1,2,3 However the job descriptions and salaries and associated benefits will change. Do I ask for a separate NDA for this business plan? The original plan calls for hiring 40 people over a 3 year period. I also have to keep a war chest for IP defense. But back to hiring, I need draftsmen, engineers, business analysts. However, now to the nub… this was done through a vc finder who has all sorts of industry insiders, so who is loyal to who… what do you do?

    Dick

    • You could create an NDA, but they don’t really hold up in court.

      The loyalty question is tough. I guess you’ll have to find out as you meet more of them. I know this isn’t your ideal scenario, but I don’t think you’ll run into too many problems.

  33. Nice post Niel,

    “Modeling” is an effective way to become wealthy and successful. You do a great job showing how great entrepreneurs make big mistakes, but always rise above them – a hallmark of successful, wealthy people.

    I’ve made many of these same mistakes. Here’s my quick 2 cents about hiring and start-ups.

    1. Don’t use Craigslist, if you are a start-up use Startuply.
    2. Hire Slow, Fire Fast.
    3. CatchtheBest works well for job postings and recruiting.
    4. Read the E-Myth Revisited. It will teach you the difference between an entrepreneur (you), a manager and a technician. Hire great technicians and just enough managers to keep the technicians laser focused. You, the entrepreneur, better guide the vision and spend time working “on” the business, not “in” the business.

    The start-up world is not about perfect, it’s about progress. If you aren’t making mistakes and learning, you aren’t living :-)

  34. I WISH I had some of these problems!

    Success and growth breeds spinoff problems. Losing focus on your vision and core expertise compounds the issue. Great list.

  35. “But the key is to not get ahead of yourself.” – Very nice though I’m going to write it down :) I am never going to have a big company but I’m having now a profitable business I am only 17 years old and I am moving on!

  36. Reading your post makes it all sound so easy however it can not of been. I think it takes a brillant mind to be able to form a business and be successful at it.

    The other thing is people are hesitant to part with money because of all the rip schemes however some where along the line setting up a business does take investment.

  37. Looks like getting the right person is crucial. I have seen great companies fall just because of bad hiring policy. A lot of companies are going towards making jobs so that the people doing them are easily replaceable and that’s bad.

    • Yeah, that’s unfortunately the issue for many of the companies that have suffered or are suffering right now.

    • The sad think is that many companies don’t care about their employees, or even worse, don’t know how important is a good employee. They prefer to hire cheap and replaceable people instead of focusing on quality…

  38. It’s really hard to commit mistake, especially in a large company because if that would happen they’ll never blame others but you as a leader.

  39. It is the main part of life. Having mistakes can make people to improve. Nice content..

  40. very interesting post. Its really hard to start a business. We always learn from our mistakes.

  41. “Find the best in everybody. Wait long enough, and people will surprise and impress you. It might even take years, but people will show you their good side. Just keep waiting.”
    — Randy Pausch

    Since one common theme here is “people mistakes”, I have to say I’ve had the good fortune of finding the “right” people at least that is what my peers tell me. What my peers don’t know is some of the people I hire they probably wouldn’t have hired themselves i.e. the college dropout, the guy who got a bad performance review in his last job, the guy who was previously rejected for another position… All of them turned out great because they were smart, they were motivated to prove themselves, and probably most importantly, they had strengths that could help the team. Sometimes we focus more on someone’s weaknesses (what can’t they do) vs. their strengths (what can they do). As we result, we miss out on the “good” people.

  42. Sounds like Jim collins – Good to Great – get the right people on the bus – and the wrong people off. Couldn’t agree more – passion is more important than skill in many ways.

  43. Hope you can share similar serial entrepreneur blogs. Makes for interesting reading. Calacanis might be one, and roachpost.

  44. Jet Airways India :

    Dharmesh Shah is my favorite entrepreneur and I am fond of his blog too much. Nice to see him in this list.

  45. The thins is that everybody makes one, or more mistakes. Hopefully they won’t make that mistake again, or even better, they will learn from somebody that did that mistake so they can avoid making the same mistake.

    • Well … more than likely… people will make the same mistake twice, it’s just natural for them to do it. Hopefully by that time they won’t ever do it again though.

  46. Hello, The mistakes can move forward. See this text :
    http://blog.francetv.fr/leshumeursdathena/index.php/2010/01/08/160762-les-demarches-pour-reussir-son-projet-dentreprise
    Failures, mistakes are all teaching to improve, modify, rethink, creations. This is part of the process of learning by the error. “If I had not erred, it would mean I have not taken a decision” (said the founder of American society “Johnson and Johnson).
    Ignore the error is to mistake “the multiplier effect of customer dissatisfaction (Form of Edwards Deming, the father of quality circles).
    The error is an essential element of innovation or the decision. It can move faster. Think about this scientist who step by step approach to magic and the filter at each step, correct its mistakes before!
    The entrepreneur is a risk taker. It must consider the error as enriching the ongoing effort to understand and then address them.
    Good Luck to all !

  47. Very helpful compilation Neil. It should be easily one of the most informative posts on entrepreneurship in terms of value.

  48. BTW.. one of the most common theme among mistakes made by people is hiring bad guys. I believe as a company, its very important to turn the bad hires into resources quickly, without wasting time. But, if you can not..its important to lose them quickly. Also, will totally agree with Dharmesh, you can never afford to be too dependent on one agency, firm, lead supplier, lawyer firm etc. You will get hit hard sooner or later.. no denying that.

  49. Hiring someone bad is a huge burden. You train someone and then they do not pan out. It’s a just of their time but it costs you so much more.

    This is why companies hire through Staffing Agencies.

  50. Neil thanks for the great hiring info, A lot of the Collins/Porras research “Built to Last” talks about getting the right people on the bus, but I have a different take on this. The bad hires are not necessarily bad employees – put them somewhere else and they fly. What’s toughest to get when recruiting/being recruited is what it is actually like to work here. The boss says we are up of innovation and creativity, but when you get there you find they are stick in the muds.
    So could it be the best thing to do is to hire gradually, have people work small projects with you first, so you test them out and they test out how well they fit before you both make a big and expensive mistake?
    Chris @ Do the Right Thing

  51. This is a very informative post, I just hope I can remember some of these mistakes and learn from them. The biggest points I gout out of this: stay in touch with your customers and make good hiring decisions. Two very good lessons to learn early on in your business.

  52. There are actually a few good AdWords books out there but they are overshadowed by all the spammy scammy ones that pollute the Internet. I have yet to come across a guide better then the official AdWords learning center. 100% of the basics are covered there.

  53. You’ve got to test your own, that’s what I have learned. I found My mistake started when I followed another who ruined his success and he wasn’t as succesful as I thought. It was a huge mistake for me. It is also good to read other mistakes that one has made. It does help you to carefully plan before you take off.

  54. It seems the lot of them said hiring bad employees. Although I really agree with Glen Kelman and what he said about “give folks the latitude to do their jobs” I had that same issue with my old job.

  55. This was a great read! Good to see some successful people failing as well while on their way to becoming successful.

  56. Internet Marketing :

    I think you hit is head on with this one.

    People who do well spend more time doing things that dont work since they are new things.

  57. I am certain that everybody makes business mistakes. It is inevitable not to do it at a point. You just need to have the capability to learn from them and don’t do them again.

  58. Hi Neil,

    Thanks for sharing such a nice and knowledgeable article. It is highly useful for start up companies and they must use it. Cash management and finding new clients / partners is the key to survive. Many thanks for sharing such a nice article.

    Ruan Moita, London

  59. Very well said. All growing enterprises owners need to focus on category targeted. Aviation is also in loss these days in India .

  60. Great tips! I find a lot of business owners get caught up working in the business and need to take more time out to work on the businessrather than in it. Awesome article. Worth printing and sticking on the wall ;)

  61. Neil… do you come up with these post idea’s all by yourself.

    I hop you use a voice recorder and have an assistant, you pump out article like a journalist.

  62. I bet you have a team of assistants helping you, don’t you?

  63. Interesting to see that bad hires came up most of the time, as the learning point.

  64. I wanted to thank you for this great information!! I definitely enjoyed every bit of it and I have you bookmarked your blog to check out the new stuff you post in the future.

  65. Career Outlook :

    I have converted this post into a PDF for future reference and thanks a ton for interview the such entrepreneurs who has given us so much great information.

  66. HDTV plasma 1080p :

    I love your internet site! did you generate this yourself or did you outsource it? Im trying to find a blog style thats similar so thats the only reason I’m asking. Either way maintain up the nice work I was impressed with your content really..

  67. One of the things I love about this site is that you always provide advice from people who know what they’re talking, whether it’s from you or from someone else. ;)

  68. Dorothy Mckillips :

    Hi. I wanted to thank you for the wonderful data you’ve posted on your site. I will definitelycome back to check it out once more and have subscribedto your RSS feed. Have a fantastic day.

  69. Thanks Neil for more than just this post. I bookmarked it and in the meantime I discovered I need to hire someone, so the timing matches. We are a team of 3, but one is living abroad and the other is working more on another project. For their tasks in the startup this is ok like it is, but being all alone in the office I notice leaking motivation in myself. So now I am searching for someone who is sharing my passion and with whom I can fight the normal entrepreneurial day. This post will make me most aware while searching for such a person and not to hire right away just because I start to be desperate. So again, great thanks from Germany.

  70. Great post about mistakes that can be done. Your post is always about giving helpful information. Thanks for upgrading my knowledge about it.

  71. Dover to Calais Ferry :

    Hi Neil,

    Really Great Post. It is the common mistakes in the Business World which you pointed out. Thanks for sharing such a wonderful and informative post. Keep Sharing.

    Many Thanks,
    Krishnam

  72. Car window tinting :

    I’m very relieved to hear about the mistakes and not only the successes. There are too many sugarcoated stories about successful people without hearing what they had to go through get there. It makes you feel human. By the way, go Alex woohoo!

  73. Hi Neil

    Excellent post. Can only learn from the best. It sure pays to keep our eyes open to anyone who may try and pull the wool over us.

    I never try to jump into any business decisions without studying and pondering about the pros and cons. Its more like a brainstorming session. Once the pros & cons have been established exhausively. Then eliminate those ideas with less risk involved. Then make a decision. Its either a win, lose situation. Aim with the intent to win no matter what-keeping in mind of your own experiences.
    Friends certainly do not need to be in business with you as, who knows what could happen.

    I am a customer focus person and always had the notion that customers always come first no matter what. A happy customer will only talk the best about your company to there friends or business associates, which attracts new customers. Provide the needs and benefits.

    Once you have thousands of customers wanting to do business, you obviously provide the best emotional experience for them.

    Repeat business takes any Company to another level of success.

    Another great post

    Richard

  74. Hi Neil

    I have a new blog started with a few posts. My blog is http://ewebsitebuilding.com. I’m learning how to develop this blog. Thats why I am here following your posts to the T. Much for me to learn Neil.

    Thanks again

    Richard

  75. Im agree with this blog post however the statement quoted below is only looks feasible where business has been started with funded capital.

    “According to the Small Business Administration, only 44% of new businesses last more than 4 years. In addition to that 60% of businesses are either losing money or are breaking even.”

    Thanks,
    Mohit

  76. Well the common theme here is hiring the wrong people and not taking action quick enough when its noticed they are not a good fit. this has happened around me before, and as an employee it is just lame. In one case I was expected to help the girl but by help they meant for me to give her the easy work while I worked on everything else. Well nothing got done on her part, I was doing more work, and she was still getting paid. It was not fun to watch and I would have loved to get her pay ontop of mine.

    • Definitely, great points. It is tough to be put in that situation..but hey, what can you do? I think that experience will prepare you next time for what’s ahead. Good luck!

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  80. hey neil,
    Thanks for such an important post. this post will be serve as guide for us.

    Thanks.
    Matt

  81. Great post! Though was not able to relate to it completely, this has made me realized that I am really a small entrepreneur because most of the issues discussed above have not come yet in my start up.
    Profile os these people is really very inspiring.

  82. This is a very informative post, I just hope I can remember some of these mistakes and learn from them.

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