START UP GURU

100 MISTAKES OF
A START UP CEO
VERSION 1.0

BILL LEWIS

www.thisisbilllewis.com
Copyright 2017 Bill Lewis
All Rights Reserved
DEDICATION
To all those Entrepreneurs who have dared to venture
through the portal of chance and to carve their way into the
annals of business, with innovatory products, ideas,
solutions, and services which have made the world a better
place and to those who have tried but have yet to succeed,
you are no less worthy of praise.
ACKNOWLEDGMENTS
This lessons and ideas assembled in this book are not mine
alone. I have researched and collated commentary, advice,
and ideas from sources as varied as they are numerous. I
have not detailed every source and every author from
whom I have borrowed or stolen an idea but that makes
me no less grateful to the men and women who daily
contribute to the vast fund of knowledge that resides on
the Internet and in books and journals.
Thank you for making this small contribution possible
Table of Contents
Table of Contents .......................................................................................xi
How To Use This Book .............................................................................1
1 Mistakes with your idea ........................................................................3
2 Mistakes in your behavior ....................................................................7
3 Mistakes in doing your job ............................................................... 16
4 Mistakes about people ....................................................................... 21
5 Mistakes in dealing with founders, Board and your investors..... 28
6 Mistakes in Marketing and Sales ...................................................... 35
8 Mistakes about Cash .......................................................................... 40
10 Mistakes with the rest! ....................................................................... 42
I recommend that you now read Midas and 1000 Cows .................... 44
About Bill Lewis ....................................................................................... 45

~ xi ~
 How To Use This Book
In my comments about product in Chapter 1, I talk about your Minimum
Viable Product (MVP).
What you are reading now is what I would consider as my MVP of this
Book. It is Version 1.0. It contains a wide range of subject matter and
covers a substantial repertoire of mistakes and errors that Start Up CEOs
may make (there are more). Note that I do say, may make. I certainly
recognise quite a number of mistakes that I have been guilty of in my career
during the past decades and that makes the writing of this book (in part)
something of a personal journey. It creates an inventory of things that I,
and other Entrepreneurs, could have done differently. And in that way I
hope that it will allow you to avoid those pitfalls that have beset your
predecessors; lessons from things that slowed us, cost us money, and
provided hard fought for experience.
This is not a novel; there is no need to read from page 1 to the end. Dip
into this book, read parts that interest you or you relate to. Keep a copy
close by. It is meant to be your friend and mentor in the absence of a
physical person.
I recommend that you share a copy with your Board, and your team. Get
feedback from them. Often others see us as we do not see ourselves. Let
them also take lessons from the mistakes others have made.
I am aware that in places the Mistakes feel repetitive I think there may be
an element of this but there is a subtlety in the answers which tease out
other important points, so please bear with me.
I must add that this version is not comprehensive. For example, I have not
dealt with capital raising. This and other topics will be covered in depth in
subsequent editions or in other books in the Start Up Guru Series,
And, as this is Version 1.0 I am convinced it can be improved, added to and
corrected, and expanded. In that process I am asking you, the reader to
engage with me in a debate and a collaborative effort.
Please write to me and let me have your comments and feedback.
Bill Lewis
author@thisisbilllewis.com

~1~
 1 Mistakes with your idea
1 You get emotionally attached to your idea. Once you get
emotionally attached to an idea, you will lose all objectivity and you
are in your bubble looking at the world through rose-colored glasses.
You accuse others are "not getting it" as it is obvious to you that you
are right (and others are wrong).

2 You fall in love with your idea before product-market fit.

If you are an early stage founder and really in love with what you
have built, you will never seek the changes necessary to make your
product viable and a successful. Remember the probability of having
to pivot is high. Love for your idea, an emotional attachment, may
stop you making that essential strategic move. Most real innovators,
at this stage, are scared to death, not in love!

3 You fail to understand why (or if) people will not pay
money for your product, you assume they will. Your idea is so
great; of course they will pay right? Wrong. You need to think why
they would pay you money and work backwards. If you are not
fulfilling the contract they expect, you may have to radically rethink
your idea. The contract is to build something that solves a (big)
problem that they have, and which they are willing to pay hard earned
money for. When you rethink, if the logic is still shaky, pivot and
doing something else.

4 You do not validate your assumptions. Do you write them

down? Validate them? No, to you they are facts. You must recognize
that your product and your business are built on a set of (your)
assumptions and you must revisit them periodically. If you do not
you are courting a disaster as there are many assumptions that
become questionable with changes in time, demographics, technology,
and politics.

5 You fail to understand the one goal when you're just starting
a company is to build and sell something for which a certain type of
customer will be thrilled to pay you money. You find out what that
~3~
something is from talking to customers and having a high degree
of imagination and perception. Your dream product, your great idea
is not worth a dime if no one buys.

6 You lack strategic focus. You decide to attack (large) markets.

You do not understand that focusing on a set of core competencies
that you can develop, which are fairly unique in the market and which
can be focused to solve a unique problem, will yield a product that
people will pay for (see 5 above)

7 You hide in a marginal niche. You choose a small, obscure

niche in the hope of avoiding competition. If you make anything
good, you're going to have competitors, so you may as well face that.
You can only avoid competition by avoiding good ideas.

8 You pick on such small problems to solve that you stay

small. Will someone pay for your app that increases their Instagram
followers? Maybe, but it is a small idea in a small market that you will
never grow that into a $100M/year business. You will never scale,
nor attract funding you are wasting investors time. Your goal should
be to change the world for the better. Find a big problem to solve. That is
an investible idea.

9 Your chose a derivative product. Derivative products are not

the best source of ideas. I suspect that if you look at the origins of
successful start-ups very few were started in the imitation of some
other start up. The best source of ideas arises from some specific,
unsolved problem the you, as the founder, has identified.

10 You want to market to the world on day one. You want to

capture the world from the outset. With an unproven idea and
unproven product, and limited resources? Maybe it is advisable to
start with a small sector which you can dominate, test products,
concepts, add-ons, up-sells, and scaling viability, and then expand
into other areas rather than going for the big win right away.

11 You focus on business model at the expense of the

product. Designing the business model is generally easy; and making
something people want is so much harder. Build the product that

~4~
solves the core problem and that people will pay money to acquire.
Put the user first, the business model will follow. It is irresponsible
not to think about business models. It's just ten times more
irresponsible not to think about the product.

12 You launch too early. There is much to applaud in using Lean

methodologies and driving for the launch of a Minimal Viable
Product or MVP. However a MVP does not mean building the
crappiest proof of concept and launch it as quickly as you can. The
danger here is that you ruin your reputation. You launch something,
the early adopters try it out, and if it's no good they may never come
back. A MVP is a product worth using, not a proof-of-concept. Build
a MVP that someone will be happy to pay for. Early adopters are
tolerant; they don't expect every feature. But it does mean making the
product look professional and polished and finishing enough details
that it doesnt look like a back-street endeavor. Even with a MVP the
customers perception is critical; if it is perceived as a Band-Aid
attempt, don't expect a return visit.

13 You launch to slowly. Often the quoted reason is that you

have a hard time getting software done. More likely it is the other
problems that manifest that delay the launch: not truly understanding
the problem; fear of having to deal with users; fear of being judged;
working on too many different things; excessive perfectionism.
Software is always only eighty or ninety per cent done at launch (and
beyond). Launch quickly because that it forces you to actually finish a
set of discrete deliverables. And, you need to launch because it's only
by bouncing your idea off users that you fully understand it.

14 You build too much. Your vision of your product is the

equivalent of Space Xs Falcon 9 Dragon but you have no idea how
to get there and what it takes to get there. Trying to build too much
can be disastrous in many ways. One - it takes too long. Two - it
costs too much and usually first-time entrepreneurs have neither the
money nor the team to build such a thing. Three you will usually
build the wrong thing. It doesn't quite solve any need and it takes a
few tries to get it right. Build a solid MVP that avoids too many
features (or generally too much complexity) and delivers one value
proposition. (Minimum Viable Product Point 12).

~5~
15 You fixate on your competitors not your customers.
Remember it is the customer that pays you and judges you, not your
competitors. You need to listen to them and remember the rest is
noise. If you have the right team, and a tight connection with your
customers, they may have a much better view of where the market
needs to go than your competitors. Trust them, trust your instinct;
thats why you are CEO!

16 You are too secretive about your idea. . You will never find
product-market fit by keeping your idea secret until it is perfect. You
need to talk about your idea - to a lot of people. Your idea may not
be the shining star you want everyone to believe, in fact you are
secretly afraid it might tank. The people you are so afraid of, those
who may steal your idea, are too busy working on their own big ideas
to steal yours.

17 You ask people to sign NDAs before discussing your

startup. Not a good habit, stop it. Early stage startup ideas are not
worth protecting because they are usually ill thought out, incomplete
and will transform to something completely different as you learn
from your customers and the market. Your baby is a pig. After you
have a product in the market, you are carving your niche and building
your customer base with a worthwhile idea, then you can ask to put
an NDA in place.

~6~
 2 Mistakes in your behavior
18 You cannot stop drinking your own Kool-Aid. You believe
your own hype. If you are not totally honest with yourself, how can
you can you make informed decisions that will truly improve your
company? You will hide behind excuses and spin stories to yourself,
explaining away why you don't need to confront reality. You cant
believe all the stories you tell. You need a healthy dose of skepticism (not
the same as self-doubt or lack of self-belief) to make real forward
progress.

19 You hide behind fake traction. Some founders are known to

highlight what looks good and hide what looks bad. This is fake
traction. For example, All of the developers who visited our stand at
the conference are rushing to subscribe to our platform! What a
fantastic statement but if you only have 10 visitors, your sample size
is too small to be meaningful. If you find 1000 people who cant stop
talking about your product, you are on to something big. Another
self-con is I have 200 people on my waiting list to buy my
product! How many of them are willing to pay you for it up front?
None? How long have they been there? Why have they not bought?
Go and ask. Often pipeline numbers are not worth the paper they are
written on.

20 You pre-filter feedback to support your idea: You ask for

feedback and then choose whatever supports your idea and ignore
everything else. This kind of filtering is designed to keep you growing
stronger in your conviction, rather than objectively analyzing where
you are and what you need to do.

21 You over-value your influence: Maybe you were very

successful in your job where your influence was positional. Then you
jumped into the entrepreneurial world; your influence all but
disappeared when you walked out of that door. Notice how a part of
your network evaporated into thin air once you were out of that
powerful leadership position.

~7~
22 You choose to ignoring reality: Feedback brings you right in
front of reality but you conveniently ignore it because it is convenient
and less painful to ignore it. The feedback might tell you to change
course (pivot) and try something else. But you choose to ignore
reality. Sooner than later you reality bites (e.g. running out of cash).
By then, it's too late.

23 You believe that learning how to run your business is

achieved by reading a bunch of blog posts and startup books and
Quora threads. Instead of spending the maximum amount of time
possible learning directly from, and about, your customers you digest
all of the important startup mantras of the last couple decades. Be
clear: Reading is good. Listening to war stories and learning what not to
do is good. Its not wasted effort at all. But you learn the most about
what you are doing and what you need to do by talking to customers,
your mentors, and your team.

24 You think entrepreneurship is cool. You are a bright-eyed

wanna-be entrepreneur with little or no experience. You think that it's
going to be easy. Its not! Get out there and experiment. If you want to
open a restaurant, but have never worked in one get a job and see
the restaurant floor, do a stint in McDonalds, or try a coffee and
donuts stall first. There are many wishful entrepreneurs with ideas in
areas they have no business or expertise in. There is a reason why most
entrepreneurs start in their 30s with experience and knowledge (and
mistakes) under their belt. They know it is not cool, it is too difficult to
work all the hours that are available, with no personal income, no
holidays, and daily challenges and not know what you are doing.
Experience counts. You want to tell people you are an entrepreneur?
Dont, not until you can feel that your peers confer the title
entrepreneur on you, you don't just claim it as a job title.

25 You make long-term cash commitments and increase the

pressure on you and your business exponentially. You have some
success in your new business, you begin to believe their own "smoke"
and start to make commitments (e.g. leases) as thought this early
success will continue. This is the time you need to be a harsh realist.
No matter how much early success you have, continue to act as if
you "might go under tomorrow," and manage your cash accordingly.

~8~
Keep all commitments as short as possible. Hopefully, you will still
be around when it comes time to ramp-up that commitment.

26 You use jargon to sound bigger and more institutional.

You litter your presentations and talks with how you are adopting
magic quadrant technology, creating synergies, establishing
bridgeheads, and socializing concepts. You want to make yourself
sound more institutional and serious. Most of your experienced
listeners see through this BS. Be conversational, honest, up front and
talk about what you are doing and the challenges you need help with,
and the value you are delivering. Use words of a few syllables; talk to
people like people.

27 You chase fads. You chase down the flavor-of-the-month,

every month, and it has always proven to be a waste of time. Don't
give yourself and your team indigestion on the latest great idea. Keep
them (and you) focused. Most fads (or most new opportunities) will
prove to be not worthwhile or just too small to be interesting. Pick
your battles and avoid the distractions.

28 You inappropriately play cheerleader when the team is

losing. As a start up CEO you have to be optimistic; however this
becomes a major problem if you insist that everything is great when
performance is not. Sportsmen and women need to know their score
and their performance, likewise employees need to understand the
reality of where the business stands. Just as a coach with his / her
athletes, your role, as CEO, is to help the team confront challenges
with energy and positivity. This starts with first acknowledging that
the challenge exists.

29 You think you can do it part time. You cannot capture the
world by waging a war only on Friday afternoon. Nobody will invest
in you if your start up is not what you do all the time, no matter how
good the idea is. Too many people have tried to build a startup idea
as side projects, and it doesnt work. Sure, some people have created a
small startup on the side and it successfully supplements their income.
But to make a real play you are going to have to make the leap and
do it full time sooner than you will feel comfortable doing so.
Nothing short of 100 per cent. Thats how it is.

~9~
30 You count your eggs before they hatch. Be realistic. If an
investor who expressed interest in investing hasnt called back in a
few weeks then (a) it isnt money in the bank and (b) it is almost
certain he is not going to call. A potential customer who says he may
pay if your product did such-and-such is not money in the bank.
What will he pay for today? The prospect that has been in your
funnel for months without moving is dead delete and clear out the
dross. If they are real, they will come back later.

31 You lie to yourself about the monster in Cube 2. The reality

is, some people have personality issues and are disruptive and divisive.
The reality is he / she is not going to change. How long have you
been telling yourself he / she will change? You know which one I
mean, they are not pulling their weight and are causing more harm
than good? They are the office bully and loud mouth. Deal with it
today, now! In a start up you cannot afford to put problems off and
hope they will go away they wont. You are running a business, do
your job. Deal with your mess.

32 You try do everything yourself. A tendency many CEOs

have is to ignore the amazing team that they have built around them.
They fail to empower the team to help solve the big problems and
take advantage of the big opportunities. A few smart minds trying to
solve a problem is almost always better than one mind. The more you
bring teammates in on problems youre facing, the more ownership
they feel over the organization and the more they trust in your
leadership. The same goes for investors and fellow entrepreneurs.
Reach out to investors, teammates, and your network when you face
problems, and lean on them more. You will find an unparalleled
resource willing to share and advise. The more you reciprocate the
more the power of this networking grows.

33 You micro manage. As a first-time entrepreneurs your biggest

mistake may be your need to micromanage (for too long). Sometimes
this is because you don't want to do YOUR job and you hide from
the difficult decisions, day to day big problems that are yours to
solve, and confrontations, by burying yourself in micro management
of everyone else. Let your team do their job, as well as they can. Let
them make their mistakes. Help them, but let it go and trust them to
do their job, and get on with doing yours.
~ 10 ~
34 You are so busy all the time with stuff you should not be
dealing with. Being the CEO does not mean being involved with
everything. Be focused on customers and product, not on the latest
accounts system. When you interfere in the detail you are getting in
the way and you are just slowing down progress. Surround yourself
with smart people and delegate, delegate, delegate. The few things
you should not delegate in the early stages of a business are finding /
confirming / honing the product-market fit, customer engagements,
and raising capital. When you become too busy with the micro you
cant see the forest for the trees. You cant think about strategic and
long-term issues because you dont have time and mental space for it.

35 You are working yourself to death. Yes, its true; as the

founder, you often feel like the world is on your shoulders. Its a
lonely job, and you think you have to be working one hundred hour
weeks to set an example for your employees. At the beginning there
IS a ton of never ending work to do development against the clock,
finding customers, and so on, but startups are a marathon, not a race.
A successful exit can take up to 7-10 years. If you dont take time for
yourself and take care of yourself, nobody else will. You cant take
care of others if you do not take care of yourself first. Do sport, get a
massage, get out and give yourself space to think and breathe.

36 You are not superman. As a leader no one (except you)

expects you to be perfect. You do not need to constantly wear a
mask of the strong and the brave to make people look up to you.
You just need to be authentic. No, you dont have to flaunt your
failures, but hiding them is unnecessary too. Share successes and
failures and get the team to tell you how you and they can improve.

37 You overstress the importance of your passion. It is clichd

to say that you are an entrepreneur and you are following your
passion. Passion is an energy that can power and motivate you, but
can easily blind you to the truth. Passion can blind you to know when
you need to pivot or change your product. Be passionate about the
product market fit and not the product as it is today keep tweaking,
find the fit. Passion is energy; but you cannot sell or bank passion
you can sell and bank cash yielded from the right product.

~ 11 ~
38 You do not have our hand isnt on the tiller. Every ship
needs a captain. If youre the CEO that captain is you. Using a sailing
analogy, your job is to steer the ship, to navigate to your destination,
to keep clear of rocks and storms. You can delegate but setting and
maintaining direction is your task. Too many leaders get bogged
down by trying to do everything and arent able to really run their
companies. You need to spend a few dedicated hours every week to
actually focus on checking course, checking on who has done what,
and running / directing your business; this alone will make the
difference between struggling or succeeding.

39 You dont take responsibility. The buck stops here at your

desk. You are responsible for success or failure. You expect your
employees to take responsibility for their individual roles; you take
responsibility for your own. If your business fails, its your fault.
Theres nobody else that can (or should) take the blame. However,
with a great team, sure and sound delegation, sage advice and
guidance from a sound Board, and careful monitoring you will
succeed right?

40 You act like a "super VP." When you spend most of your
time dominating the operations of one functional area in the
organization (likely to be the one you have a background in) you are
not being a CEO, you are trying to revert to a VP. (Is it because the
CEO role is too uncomfortable?). Acting as a VP and managing a
function frustrates the executive who's responsible for that area and
you do not have time to do what you should do. Yes, you may have
to step in and now and then to give some hands on guidance. If,
however, you are stepping in because they genuinely cannot do the
job, replace them and get back to being CEO.

41 You have a favorite child in the organization. While it is

human nature to favor certain people over others, CEOs have to
display no fear, no favor. Failure to do this will create tensions in
the team and a feeling that the remaining members of the team are
second-class citizens in their own company.

42 You meddle and interfere. It is extremely rare, if ever, that a

CEO can do every single job better than the people who actually do

~ 12 ~
the job on a daily basis. But you feel you want to re-write that
marketing copy, you want to change the job description that a VP has
written for his / her staff, and /or you have to see everything. The
result is the team believes you (the CEO) do not trust them,
Employees learn not to finish their work because they know you are
going to change it, and they dont give their full effort. Its a
downward spiral from there.

43 You lack 100% commitment. Being present but absent,

thinking about other things does not work. Part-time doesn't work.
Facebook, blog-oodling, planning / dreaming of vacations, clubbing,
weekends off these do not work. A startup must be your number
one priority 24 hours a day. Enough said.

44 You avoid thinking about revenue. Cash, more particularly

net cash flow, is king for all startups; cash comes from revenue less
costs. It is highly doubtful that you are the next Twitter, Instagram,
and Facebook who did not worry about revenue until many years
after being founded. Their cases are exceptions not the norm. Build a
product people want and will pay money for, sell it and get cash in;
build organically, and you can become a highly investible business. At
that time you can scale on the foundation of a solid business. That
foundation will bring investors to allow you to scale. Growth is great,
and great growth can be wonderful to experience, but grow from
solid roots. Dont tell yourself that you are an exception; you are
risking too much if you are wrong. Your idea dies, starved of cash.

45 You undervalue the need for good help. Sorry to tell you
but you don't know it all, you don't know even a tiny percentage of
all. Entrepreneurship is a team sport and it is a game of ecosystems.
You need "good help" from all quarters and pretty much most of the
time. Reaching out for advice and help is not a sign of weakness but a
sign of wisdom. Help and advice throughout the journey will create a
successful and meaningful adventure. Successful CEOs have a
pattern of seeking out continuous opportunities to learn from others.
This includes formal / informal education, peer group counseling,
outside consultants, and coaches. Don't be trapped in the belief that
you know everything, that you are the industry expert and so on. If
you do, your company will, at best, suffer a slow and gradual decline.
Remember, your business and you personally are either growing and
~ 13 ~
prospering, or declining. Ignore this and you are guaranteed to pay a
price.

46 You talk too much and do not do enough. You indulge in

procrastination, the death knell of a start up. First-time entrepreneurs
tend to over-value their creative capability. So instead of executing,
instead of putting stuff out there and seeing what happens, they
spend their time ideating, and talking. There's a huge difference
between describing an idea to people and showing it to them.
Procrastination is allowing any inner limiting beliefs to take hold. You
really cannot face knowing if it will succeed or fail. Procrastination is
a form of your own personal Resistance to your success. It is a fear
of being told you are wrong. The closer to launching your startup, the
stronger the Resistance feels. You will make up excuses; you will do
anything to put it off another week, another month. You cant find
product-market fit unless you have a product to try to fit with, and a
market you get out into. Dump procrastination.

47 You use your lack of funding as an excuse. In these days,

you do not need to spend millions of dollars to validate most startup
ideas. You need to be resourceful and resolute to get something out
there. You can usually validate that people want to your product in
some form or another, or even pay for it, for a very modest
investment. Havent built your product yet because you think you
need funding first? Build another product that wont cost so much.
Havent started selling your product because you think you need
funding first? Funding follows a need; a need derives from a proven
business / investment case. A business / investment case follows
market assessment and customer feedback. You are making up
excuses; go find solutions. Bootstrap yourself to the first MVP.

48 You obsessively compare yourself to other startups.

Startup envy is a wasted. It is not a good motivator and when you
start to look over your shoulder and become obsessive about the fact
that such-and-such startup was just acquired for hundreds of millions
of dollars and you are so much smarter than them this a waste of
both time and emotion. Stop reading publications such as Hacker
News and Techcrunch for a time. Don't stop product and service
comparisons in the marketplace, you need to keep your awareness to
keep your edge.
~ 14 ~
49 You dont want to get your hands dirty. If you are a
programmer at heart you would rather spend their time writing code
and have someone else handle the messy business of finding
customers. If you're going to attract users, you have to get up from
your computer and go find some. For some this is unpleasant work,
but if you can make yourself do it you have a much greater chance of
succeeding. You need to be on the phone talking to potential
customers, trying to arrange deals. Get your hands dirty in the
trenches of selling, marketing, customer services and hustling your
ideas - it pays off.

~ 15 ~
 3 Mistakes in doing your job
50 You create a business plan for a "make believe" business.
You have an idea and do some research and then you sit down and
write a long business plan with a Mission Statement, a Vision, a
Strategy, a Tactical Plan, an Organization Chart, Discounted Cash
Flow analysis and so on. It is a hundred pages long. Sorry, it is a
waste of time. Early on, most business plans are a theoretical exercise
as to how you expect the business to roll out. In reality, what you
write (the objectives, market penetration targets and strategies and
tactics) are for a business that will never see the light of day; it is a
business in your imagination, protected from the reality of the market
and customers. What you need is a Battle Plan. You need an
awareness of the landscape, and a detailed intelligence on what you
need to do to capture your first hill, be it a launch product, or a
MVP. A battle plan is a dynamic and is used to manage the business
day by day. More often than not, you will pivot multiple times in the
first six months, making all the work you put into a swish business
plan it a waste of time. Your battle plan is living, breathing document
that changes as you continue to learn more about your market, your
prospective customers and your product.

51 You value the idea more than execution. The concept that
execution has greater value than an idea must penetrate your psych;
you may forget about chasing that perfect idea instead of focusing on
building an awesome team, and processes to make the idea irrelevant;
because the idea is going to morph into something else in the first six
months or a year and it will be the team that takes the business
through this critical phase effectively and successfully.

52 You try to do things in parallel rather than in series. A

common mistake for entrepreneurs is that they try to do (many)
things in parallel rather than in series. More is better right? No!
Instead of trying many things at once, you should focus on one thing
at a time and really dive in (and not do anything else). All the strategy
eggs should be in one basket. Micro bets can be a good idea for large
companies (like GE) but they doom small companies to failure
~ 16 ~
because of lack of focus. The business should have one overarching
clear strategy and one Big Bet. And every employee in the company
needs to clearly understand the strategy and the Big Bet. If the Big
Bet turns out to be wrong, you pivot and change strategies. But the
important thing is that you give the strategy a chance of success by
really focusing on it.

53 You allow your parallelism to multiply in your team. Not

only should every company have one clear strategy, but every part of
the organisation organization within the company should too. If a
start up tries to have multiple strategies and products, then your team
has to emulate your plans across the organisation and in no time, no
one is sure what the priorities are any more. Every person in the
company should have one clear thing they are working on at a time.
If you ask someone in the organization what they are working on and
they rattle off five things, you know there is a core management
problem. Everyone should be focused on accomplishing one core
task at any given time. When they are done with the task (or it is
determined that task is either no longer relevant or too hard to
complete), then they can focus on the next task. All the tasks support
the support the Big Bet. Doing two new things at once is not a good
idea. Series beats Parallel.

54 You exhibit a lack of focus. You allow anything and

everything to distract you as you seek new ways to viral growth. You
need to work on ONE THING -- the thing you thought was going
to be the best thing -- and do it well. Once it is up, running, and
proven, move to the next. If it doesn't work after a big try, pivot

55 You don't trust the off the shelf solution and build your
own. This is the Not Invented Here syndrome. Didn't build it so I
don't trust it, or I don't need it I can build my own reference the
accountant who designs the complex accounting system on an xl
spreadsheet because he can, no one understands it but him and a
simple cloud based system would have cost a few dollars a month
and worked out of the box. When the CEO is directing a lets build
it ourself CRM system or accounting system, they are avoiding their
real job fo managing the business. Let your team find an off the shelf
solution its almost guaranteed something exists.

~ 17 ~
56 You do not realize that your time does not scale. How
many coder CEOs insist on doing coding work themselves, when
they should be acting as a teacher and a manager. Your time does
NOT scale, but your money can, if you can hire other people to do
the work.

57 You insist on waiting until the product is "perfect." This is

the fear of failure and your insecurity mind set. You are so afraid;
you worry that customers will reject anything less than perfect. So
you work and work and work. Remember - Pareto you can get
eighty per cent of the product in twenty per cent of the time it takes
to get a one hundred per cent perfect model. Get your product into
prospective customers' hands as soon as practical. An eighty per cent
product in the customers hands, even with some deficiencies, gets
you both potential cash flow and customer feedback sooner
(remember YOU do not know everything that the customer needs,
they will tell you). You can make the product, then make it better,
sooner. That last fifteen to twenty per cent often costs two or three
times what the first eighty per cent. The last five per cent usually take
three times longer. Cash, a new customer, and feedback trumps
perfection, every single time! If you are not embarrassed by the first
version of your product, youve launched too late.

58 You introduce multiple products or services. This is akin to

the parallel and series discussion (Point 51). You should market deep,
not wide; and more is not better it is only more (more resources
needed, more challenges, more headaches, more risk). In an early
start up phase of the business entrepreneurs should focus tightly your
product or service, and on a niche market you can penetrate. Keep it
simple (KISS) and drill in deep. Multiple products might mean
multiple revenue streams, but needs multiple resources that you do
not have in abundance.

59 You price cheaply to win business. You decided to compete

on the price front because you did not understand value based
pricing. Customers pay for features, benefits, convenience, and
reliability. Have the right product, and customers will follow. Are you
pricing cheap because you know you have an unattractive,
uncompetitive product and you pray that a cheap price will result in

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sales? It will not. If your product is crap, nothing will persuade a
customer to buy. If it a great product price accordingly, they
(customers) will come.

60 You will try to be too cute with pricing. A complex pricing

structure creates confusion and is a turn off to customers. Make sure
the customer sees what they pay for, and they get what they expect
too many pricing options causes decision paralysis and lost sales.

61 You take advice about the product from non-customers

and the never would be customer. Not all feedback is created
equal. Feedback from existing customers or credible prospective
customers is worth a lot, as is advice from people whove done
something similar to what you are attempting to do. But taking advice
from others outside of those groups generally proves to be a waste of
time. Never take advice from someone who doesnt have some skin
in the game customers, your team, your investors or from
someone who has been there done it and has earned your
respect. The rest is a distraction, and of negligable value.

62 You waste your time networking. You are too polite. You
get invitations from people to have coffee. They are making you
feel important? What benefits do you get from these meetings? How
many times are they a pitch to sell you something you don't need and
never will need, and you continue to get the same email invites, from
same people, to have coffee semi-regularly. Push to have an agenda
and objectives for the meeting so that its clear there is a reason to
meet. You have a finite amount of time. You cannot keep an
inventory of time and take it out of store when you need some. Use
time wisely and preciously. Conversations with people who have a
clear reason to meet are more productive for both of you.
Distinguish these types of meeting from trade networking where it is
essential for you to show the flag to see and be seen.

63 You are obstinate. While in some fields the way to succeed is

to have a vision of what you want to achieve, and to hold true to it
no matter what setbacks you encounter. The stick-to-your-vision
approach works for something like winning an Olympic gold medal,
where the problem is well defined. Starting a start-ups is different, it

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is a journey into the unknown; don't get too attached to your original
plan, because it's probably wrong. Most successful start ups end up
doing something different than they originally intendedoften so
different that it doesn't even seem like the same company. If you
have doubts about the new idea ask your customers if they are
excited then you may be on a winner. While you have to be prepared
to see the better idea when it arrives make certain that your new idea
is an evolution, a process of convergence on the ultimate goal value
to the customer from a great business team.

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 4 Mistakes about people
64 You hire contractors instead of employing great engineers
in the belief that if gives you flexibility and saves money. It gives you
flexibility, yes, but when you want to scale and react quickly do not be
surprised if those same contractors are nowhere to be found they
have hopped off to the next highest bidder. Hiring full time employees
takes longer and is harder and can cost more, but the long-term
benefits will always outweigh the short-term gains. A startup is not
about the product, it is about the team and a great team is more
valuable than the product. Hiring full time employees is about building
a team. Hiring contractors is a Band-Aid and a one with poor
adhesive, at that. Startups are a marathon, not a sprint. It is more
important to slowly build an excellent team, a motivated team, and the
right team than it is to get your product out of the door faster.

65 You didnt fire those bad advisors quickly enough.

Advisors of any kind (lawyers, accountants, PR, etc.) often have a lot
of knowledge about how things work, good advisors are necessary;
when starting the business with one advisor, transitioning it to
someone new may to be challenging (but thats not an valid excuse).
Bad advisors who pile up problems quickly, consume too much real
and emotional energy, and compound problems the longer they stay
around are a liability. Cut them free and change no hesitation.

66 You undervalue good help thinking it is a weakness to

reach out. You are on a roller coaster of a journey, and you need
your team and resources at every stage. Entrepreneurship is a team
sport operating in complex technical, commercial, legal, and personal
/ personnel ecosystems. You need "good help" throughout the
journey, you cannot do it all, and you have neither the time nor
expertise. Figure out where you are less strong and cover off by
having good internal resources and external trusted help.

67 You undervalue general management competency. You

underestimated the difficulty of managing a team and undervalued
the skills of general management, process, and strategy. One of the
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new skills that a new CEO may need to learn is the art of managing a
business this is not a natural skill set that we all have, it is learned
and acquired and using mentors and the Board may guide you.
Businesses do not run themselves; processes do not appear from
nowhere, the business internal ecosystem and infrastructure (process,
information, organization and technology) to run the business needs
to be created. Without creating complex and burdensome systems, it
is something you need to start with at the beginning.

68 You are not on boarding new teammates effectively. It is

nowhere near adequate to set up a computer and give access codes and
throw someone in at the deep end and expect them to perform like a
long serving team member. Induction is an investment in bringing a
new employee to being the most productive they can be and as happy
as they can be in the shortest possible time. You are building a team;
inculcating someone into a team effectively does not happen by
chance. On boarding requires as much investment as hiring.

69 You are not celebrating with the team. It is important to

ring the gong; ring it more, ring it often, even to celebrate small wins.
As the team sees progress in all departments and across all teams the
motivation levels becomes high and stays there. Celebrating small
wins doesnt mean you and the team are less hungry or less focused
on the Big Bet. It's a way to recognize that you have momentum and
the team knows it.

70 You don't eat together as a team. While it is sometimes

logically challenging to get a team together for lunch, or any meal,
there is something to be said for the saying a team that eats together
and drinks together, stays together. In an intense environment with
everyone working hard on his or her deliverables social interaction is
important and it is not just nice to do, it is essential.

71 You do not give people clear enough instructions. You

assume they will figure it out. Yes, you hired smart people and they
want to be valued, contribute, and deliver. There is a continuum from
the Idea and the Big Bet to the task being undertaken now. Clarity of
direction achieves and delivers; vagueness does not, it impedes
progress, causes rework and down time, and loses money and

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momentum. Smart people want to actively manage their career and
have aspirations for where they want to be; its your role as CEO to
make sure this part of the contract between you and the employee
you hired is delivered. It is clear direction to smart people that wins.

72 You cut corners on hiring. Your hiring process is broken and

it needs to be fixed. You think that it is HRs job. It seldom is HR
facilitates a plan the CEO and the team put in place. You have no
hiring plan; no one knows who is needed when. You hire under
pressure, and cut corners it doesn't pay. So you move (too) fast and
you are landed with an employee who does not fit and does not
perform; then you prevaricate about letting them go and the whole
team sees it and is frustrated. At the same time, you prevaricate over
top hires and you lose them.

73 You compromise on hiring. You know you've compromised

on a hire when they check all of your boxes, but you still get an
uneasy feeling after you've closed them. Never compromise no
matter how badly you need to fill a position because it will just end
up costing you time and money to replace them, and create stress
your team. If you had concerns during the interview process they
only become magnified when they actually join the company. If you
think they are technically amazing but not a culture fit, then joining
the team can put stress on them and the rest of your employees, and
drive churn of team members who do fit in. One wrong hire can lead
to the teams downfall. Hire for skill, intelligence and tenacity first -
do not hire because they are "good-enough" and then check if they
fit the culture. Made a mistake? Fire fast.

74 You value experience over intellect/hard-work. As a start

up you think you need team members that have five to ten years
experience. Yes, you need some seriously experienced members of
your team, but in a start up people need to constantly be learning fast
and their ability to learn and get work done should be placed over
years of experience.

75 You believe you have hired the new messiah. You fall in
love with new hires and think they will come in and magically solve
some intractable problem you have. The problem is your

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expectations/hopes are unrealistic and you are often found to be
disappointed. Try to have more reasonable expectations. Sometimes
you will be surprised which is amazing. But banking on the new hire
messiah is a fallacy.

76 You hire the annoying or assholes, and you tolerate

mediocrity. Regrettably annoying people and assholes exist, and may
be well camouflaged at the beginning, but their personality will
emerge. Skills change, personality doesnt. This is a disaster waiting to
happen. Once identified it is better to part company otherwise it is a
poison that will spread. Try to catch it at hiring; in the case of doubt,
unless you have a comprehensive and collective yes, do not hire. (See
73 above). High performing companies and leaders should not and
cannot tolerate low performing staff. You can tolerate mistakes, but
thats a different issue. The telltale signs are putting up with the long-
term employee (or relative) with a toxic attitude, because he really
does his job well, but he negatively affects the working environment.
If you do not take decisive action you get rid of mediocre
performance its effect spreads like a cancer.

77 You experimented with remote workers too early. The

digital era creates marvellous opportunities for location flexibility and
outsourcing. Building an awesome team requires professional and
social interaction, which is effectively achieved when the team are co
located. It is the core of people (the founder(s) and the first
followers) that set the tone and momentum of the business. The early
team is best served by working together. There comes a point when
location independence can work it is not in the early stages. It
needs a strong and adaptable management infrastructure and a really
figured out workflow and basic processes.

78 You outsource recruitment to HR. Human Resources is a

vital ally of the CEO and the team, but you as CEO must take the
ultimate responsibility for supplying the talent that will help the team
win. HR is the facilitator. The selection and recruitment process need
to be inclusive bringing all key team leaders together in a consensus
process. If there is dissention or concerns about fit don't hire.
HR cannot make these decisions.

~ 24 ~
79 You insist on making all the "important" decisions.
Decisions are the fuel on which organizations run. If you're holding
up critical decisions by insisting they all cross your desk, you are
stifling your entire operation. When the decision has implications
across multiple functional areas or involves key personnel, it's the
CEO's to make. Otherwise, it's likely the decision could and should
be made lower down in the organization, by someone who has the
requisite expertise and perspective. A spin on the important decision
habit it found in the CEO who spend weeks or months on an
investor PowerPoint presentation, making sure that every image/icon
is perfectly aligned. It doesn't matter, it is creeping perfectionism and
delay. In any event, your idea, team and market should be so
compelling to an investor(s) that having a pretty PPT doesnt matter.
Time should be spent on creating, selling, and hiring. Often it seems
that the same people who obsess about the last detail also insist on
making all the important decisions.

80 You avoid your team. Sure, there are going to be times when
you want to lock yourself in a room and stay there. But a leader
cannot hide behind his desk no matter how much he might want to.
A leader must be visible in good times and in bad. When there are
problems and issues, your team needs you support it might be just
a visible presence and a reassuring nod, but thats when the team
needs to see you. Your team is your company, keeping them happy is
one of your top priorities.

81 You dont do enough 1 on 1s with people in your team.

Regular feedback (both ways) is important. This type of feedback is
especially important in a fast growing company where things can
change frequently. You need to make it a regular habit there is a
mine of talent and ideas sitting outside your door, they come forth
when they have the chance to be listened to. Implement a systematic
way for teammates to give feedback to each other (and to you). We
know it can be sometimes hard to deliver tough messages in person,
but facilitating this creates and supports confidence and trust.

82 You don't provide the team with context about company

direction. Maybe you sit in an open floor plan, if you do you assume
everyone knows what is going on because they can hear you and

~ 25 ~
others. The problem with this logic is that everyone is too busy
actually working to sit around and listen to you. So while your team
are aware of the tactical week-to-week stuff, the big picture stuff
about where the company and everyone are going, and the why and how is not
usually covered as well as it should be. Do not underestimate the
importance of the big picture stuff in providing context to the team
to help them become more successful.

83 You are too smart to learn from anyone else. You should be
spending most of your time in meetings asking questions. Dont
think because you are CEO you are the only one with any brains in
the room. Remember you hired an awesome team learn from them
(old adage always hire someone smarter than yourself). Those that
are closest to the work understand it the best, they have some great
ideas about how things could be improved, but they are seldom asked
for input. You will be surprised at the insight of some of your
employees. Be the head learner in the organization, it encourages a
learning style. Target on making sure in meeting eighty percent of
your time is spent asking questions.

84 You fail to communicate. Why do CEOs think that everyone

in their organization can read their minds? They cannot, you assume
you can employ the art of communication by Zen transference you
cannot, that method does not exist. Without clear communication,
employees perform to their own personal standards, and do what they
think is important, not what is necessarily important for the
organization and you get a group of individual performers not a team.
As CEO you must establish a clear, concise, and regular system of
communication so that every employee not only gets the message, but
the same message with good communication flowing up and down in
the organization.

85 You think culture is just happening. Culture may be

defined simply as the way things are done around here. Culture
does not happen (or if it happens by default you may find it is not
what you expected or wanted). Your role is to lead the early members
of your team to develop an empowering culture that makes people
want to work with you and your team. Create an environment where
people are able to take ownership of their individual responsibilities

~ 26 ~
and have a say in how they do their work creates an engaged
workforce that will step up and perform at a higher level, ultimately
making your business more successful. Once you have it in place,
make sure your leaders in the organisation are embracing and
supporting the culture. Like all your great assets, culture takes effort.

86 You think you are too important. If the culture is to wear a

shirt with your name on it, you are not too important to ignore that
behavior. If you fail to get out and talk to your team because you
have more important things to do, you are missing the point. Your
team, and what they build, is your only asset (along with your
distribution system to get the product into the hands of customers
who want to pay for it). When you think you are too important you
are aloof, when you are aloof you have your head in the branches of
the trees and you are communing with monkeys not your team.

87 You are afraid. You are in good company if you are afraid.
Being a start up CEO is a scary prospect. You feel you dont really
know what theyre doing and spend a lot of time worrying about, and
trying to make sure nobody finds out. You are in a new wilderness,
trying to forge a path to follow and you find yourself trying to find
solutions to the problems you did not expect. You may get a lot
further with your team if you admitted when you are not sure and
engaged the team to help solve problems. While it is up to you to put
the puzzle pieces together, it is OK to ask for help.

88 You forget the noble purpose. If all you are doing is hustling
a way to make money, and money is your sole driver, then you are
unlikely to succeed to create a worthwhile business when money is
the end in itself it is rarely sustainable. Most CEOs and teams want to
contribute to something bigger than them, and be engaged in a noble
and worthwhile pursuit. For example, it may be To change the
world communicates, bringing better access to the disconnected.
Thats a goal and a mission that would come from the Founders and
the CEO, and it is a cause that everyone in the organization believes
in and feels good about. It might not be fighting global malnutrition,
but it is a cause that your team can embrace their head around and
feel good about

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 5 Mistakes in dealing with
founders, your Board and your
investors
89 You think you can go it alone. Dont, this route is the most
difficult of all; the success of the single founder is extremely rare. If
you are thinking of going it alone it is worth asking yourself, are you
going it alone because you are unsure of your idea? You have not
asked others to buy into it? Or they have said No? Maybe that tells
you something about your idea. Even if you have a mega idea,
starting a business, going into a start up mode, is too hard for one
person. Even if you could do all the work yourself, you need
colleagues who have co-founder commitment. The low points in a
start up are so low that few can bear them alone. With a team of
founders, they are bound to a common cause, each supporting each
other. Although some successful businesses appear to be founded by
one person, in reality there is a close group of founders who work
and are low profile.

90 You think the founders will always be friends. Fights

between founders are surprisingly common; maybe in one in five
cases a founder leaves (quoted by a Silicon Valley VC). A founder
leaving doesn't necessarily kill a startup; a number of successful
startups have had that happen. When it does happen, it is fortunate
that normally the least committed founder generally leaves. The
founder team may be two or three people. At all times, the founders
overtly or privately need to have a contingency plan for the exit of
(one of) the others. If there are three founders and one who has the
least commitment goes, it is survivable. If you have two and one
leaves, or a guy with critical technical skills leaves, that is a situation
where you need a serious contingency plan. It is advisable that
founders shares are vested in an orderly way, so if a person leaves it
does not impact the ownership adversely (see 94).

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91 You do not make your expectations as a Founder clear.
Most disputes between founders (and this is extended to the
founding team, the early employees first followers and the start up
coalition) could have been avoided if you as CEO, and the team, had
been more careful about mutual expectations, which are clear and
documented. It is much easier to fix problems before the company is
started than after. This early negotiation and agreement is often quite
challenging as people have different expectations that are suppressed
by the urgency of getting started; getting is all out gets in the way
of starting the business. If you are not clear and transparent (See 95
pre-nuptial agreement) at the outset, something (big) will come and
bite you down the line.. Once the business is underway, it is
important that there are frequent, honest check-ins to see how
everyone is feeling on an interpersonal level and how the original
deal that was struck is being adhered to. Founder disagreements
wreak havoc on a start up, detracting from the real work of acquiring
happy satisfied customers who are paying you for your amazing
product. Getting on the same page early on, and ensuring good
communication, can avoid confusion and resentment that becomes
such a volatile negative force.

92 You don't understand the implications of the Founders split

of Equity. Founder equity splits are one of the greatest pitfalls to beset
the building of a start up. The best of ideas can be derailed when the
founding team neglects to consider their early decisions about the team:
roles, rewards, relationships, degree of commitment expected and given,
and ownership. It has been quoted that the best split of equity occurs
when all the founders are equally unhappy! There are different ways of
splitting the equity. Time wise, some do it at the outset, others wait to
get to know each other and observe commitment and contribution.
Some do it on a handshake; some go through careful negotiation. Some
divide equally, some divide unequally to reflect the differences between
founders individual contributions. Some build in a vesting process that
attempts to take account of future changing circumstances. Teams who
negotiate longer tend to arrive at an uneven split, because the harder the
team look at each others real and expected future commitments the
more likely you are to discover important differences. Investors prefer to
see an equity split that reflects the reality of the start up and the
respective commitments of the players.

~ 29 ~
93 You do not foresee the dangers arising from Family
Equity splits. Splitting founder equity fairly and appropriately
between family members is particularly challenging. The quick and
easy solution of equal splits, and shares for nominal (family) members
of the start up team, will come back to haunt you as you move
forward. Nominal members, with equal equity and minimal
contribution, will soon be recognised, by the hard working team, as
free loaders and despised. Cofounders who are relatives usually
believe that they already know each other intimately; they soon find
great differences under the extreme stresses that accompany start up
life, often in negative ways. When it comes to relatives, you bypass
detailed founder discussions at your peril. Regrettably, this is one of
the least visited, but essential steps in formalising the start up.

94 You didnt think about vesting. One means of dealing with

the evolving roles, contributions, and changing circumstances of
founders is to adopt an organic agreement in lieu of the static
agreement typically seen in start-ups. Vesting, in which each founder
has to earn his or her equity stake by remaining involved in the start-
up and /or by achieving pre-defined milestones, is one way to
achieve some level of fairness in the ultimate allocations of shares.
This common sense approach may be seen to invoke the difficult
conversation of negotiating founders roles, contribution and future
eventualities but the approach ultimately delivers fairness not seen in
any other ways of allocation.

95 You didn't write a pre nuptial agreement. A start up is

akin to a marriage; that the start up will be sustaining and adhering is
no less an expectation than that of a couples intent in adopting the
vows of a relationship in marriage. As emotionally challenging as pre
nuptial agreements are on the road to the marriage ceremony, many
founders appear to equally challenged on their road to consecrating
the start up. Founders often cannot bring themselves to consider that
their relationships will end in acrimony and divorce. Despite this
emotional response, level heads will agree that setting up an
agreement, at the outset, that outlines negative scenarios that might
occur in the future, with corresponding actions to help avoid them,
could help founders avoid headaches and increase start-ups chances
of success.

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96 You do not create a functioning and contributing Board.
Many entrepreneurs avoid setting up a formal board of directors for
their new business unless or until they sign up an investor who
demands a seat on the board. That implies that a board of directors
has no value to the founder, except to appease outside investors.
Nothing could be more wrong. High-performing start-up CEOs are
the ones that use every resource at their disposal, including
establishing a credible and contributing Board of Directors from an
early stage. What characteristics of the Board should a Founder and /
or CEO seek to attain? Size matters - three to five members is
appropriate (an uneven number to avoid tie votes); compensation -
should be with stock and (maybe) a small retainer; independence - an
outside director brings new input to the table that offers invaluable
context and challenge to your hyper-focused environment. Do not
expect the Board to always support management - the board
members have to represent the divergent views of all constituents.
The board must be the boss for the CEO, setting clear goals,
measuring performance, and providing business governance. The
sooner the Board in place the sounder the start up will be.

97 You don't get investors on the Board soon enough. Not

inviting a significant investor to sit on the board is a mistake. When
you are raising funds you should be maximizing for value-add. Look
for outstanding investors who would make excellent board members
and bring mentorship, gravitas, an outside perspective, and real
investor buy-in; this always outweighs the downsides (loss of control,
investment of time in board management). Find an investor who is
savvy, street smart, and experienced and who cares about your
mission deeply, and with whom you have great rapport. Invite them
to serve on your board.

98 You do not use your Board. The board is the CEO's

sounding board and a CEO is mistaken if he / she does not actively
seek their feedback. The CEO should engage Board members and
solicit support, and request honest assessments of their performance.
Reviewing and acting on this feedback helps you as the Start Up
CEO to constantly grow as a leader - whether you're the smartest guy
in the room or not. Feedback and advice does not have happen at the
Board table; many CEOs use individuals on the Board as mentors

~ 31 ~
due to a special skill they may possess. This is a bonus which arises
outside the formal Board meeting schedule.

99 You don't think like an investor. Whether financially,

emotionally, or in terms of hard sweat equity, you are the business'
first and biggest investor, so lead by example. Make sure your idea is
solid before taking other people's money. Think about their
perception of the investment opportunity, their returns, their risk,
and provide an unassailable case that the Big Bet is a viable, attractive
investment. Make sure they invest in the company, not in you.

100 You do not know how to value or use equity. Some

entrepreneurs make the mistake of giving away equity too freely too
early in the game, others are too clam-fisted. In any case where equity
is used as compensation for investment, services or incentive -
carefully weigh the trade-off between shareholding awarded and total
(expected) value of the business. Equity can be used not just to
attract financial investors, but also compensate service providers,
advisors, employees, etc. Using relatively small amounts of equity in a
judicious and sophisticated manner can help demonstrate an external
valuation for your company, ideally one that is increasing over time,
and conserve cash.

101 You don't prepare for (informal) investor meetings. You

get to the point where VCs and intermediaries want to talk to you
about how they can be helpful. Maybe you are not interested in
raising money at the time and you do not prepare for these meetings.
You may come across as lacking in competence and professionalism.
You should always represent your business, your company and your
team in the best possible light they deserve it and should expect
you to do nothing less. No matter how informal the conversation is,
talking to potential investors requires putting on your best face.
Anything else is a waste of time for both parties you never know
where that conversation will lead. At such meetings you are as much
in the customers eye as you would be with a real customer. Your
outward persona and the impression you give can, be and probably
will be, networked across your sector and beyond however informal
the meeting is claimed to be.

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102 You raise (too much) money too soon. If you raise several
million dollars the clock is ticking. Investors will look for the road to
their return. If a VC funds you, they're not going to let you just put
the money in the bank and keep operating at a small scale. When you
raise a lot of money, your company moves up a league and the
owners have new expectations. One critical constraint that you did
not experience before is that when you take a lot of money, you
grow; and it gets harder to change direction. You use the money to
expand, more people, more resources. You sold the investor on A.
What happens now if you realize you should be doing B. You now
have a bigger organisation pointing in the wrong direction. A better
strategy would be to maintain the maximum flexibility commensurate
with growth and take investment in tranches to keep gas in the tank,
give you adequate runway, but allows you agility and flexibility to
pivot if you have to.

103 You don't manage your investors. As a founder and start up

CEO you have to manage your investors. You shouldn't ignore them,
because they may have useful insights. But neither should you let
them run the company. That's supposed to be your job. A lot of your
energy can get drained away in disputes with investors instead of
going into the product. How hard you have to work on managing
investors usually depends on how much money you've taken and
how well you communicate with them. If things go well, this
shouldn't matter. So long as you seem to be advancing rapidly, most
investors will leave you alone. But things don't always go smoothly in
start-ups. Investors have made trouble even for the most successful
companies. Being proactive in managing investors mean regular
briefings and communications. Don't let the first time that they hear
from you be when you are the bearer of bad news. You owe it to
your team to keep your investors close and you owe it to your
investors to keep them updated after all, theyre taking a huge
financial risk to help you and the team achieve your mission.

104 You are blind to recalcitrant employees accessing

investors. When it happens you find yourself blindsided. Regrettably,
there are certain types of employees, (see Point 76) who believe that
they have the right to communicate directly with Board members, or
even investors, to air a grievance that they do not think is being dealt

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with to their satisfaction. The fact that it has been dealt with fairly by
you, with the backing of your Board if necessary, is of little
importance to this type of employee. This type of employee will stop
at nothing to attempt to rally shareholders to their cause. At the end
of the day, there is only one cure cut this kind of cancer out of the
organisation.

105 You fail to recognise the need for a professional CEO. The
Start Up CEO has assets that are essential and necessary to build a
sustainable business from the cauldron of a start up: comprehensive
knowledge, moral authority, and total commitment to the long term.
This leads to rapid product innovation that is a prerequisite for
success in todays start-up world. But if youre successful, the job of
being CEO shifts dramatically over time. The CEO will need to
focus on a different set of challenges and concerns that are execution
led in a larger more formal organisation with hundreds or thousands
of employees. This takes a significantly different skill set to the
Founder CEO who built a business in a hot bed of innovation and
uncertainty. It is rare for Founder-CEOs to run their companies in
the long term.

106 You do not understand the potential loss of value when

you remain CEO. For many founders, the ideal entrepreneurial
outcome would be one where the entrepreneur both grows a valuable
company and remains a big player in it However, within a most types
of business, most entrepreneurs will face a tradeoff between (a)
building value (represented by the growth / size of company levered
by increasing investment) and relinquishing some decision-making
control (bringing in a professional CEO, for example) and (b) being a
player holding a larger stake in a much less valuable company in
which the Founders retain control and receive an adequate
investment stake and return. There comes a point when the benefits
to the remaining shareholders may be better served by a change in
leadership and the continuing growth of the organization. This point
comes, for the CEO, at the moment of self realization that the
business he / she created is a different entity today than the early
stage venture that fought and clawed its way into maturity, and it
needs new and different skills sets to continue the upward trajectory.

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 6 Mistakes in Marketing
and Sales
107 You ignore or do not do enough you marketing. Marketing
is one of the biggest challenges for the Start Up Entrepreneur.
Pressing priorities getting the product defined and built, getting the
right resources, convincing people to buy into your idea, and finding
funds, to name but a few task, cause marketing to slips down the list
of tasks to complete. Marketing is not generally a Start Up Founders
forte; it is unusual to find a Start Up CEOs with heavy experience in
marketing. One half of Start UP CEOs come from an STEM
(Science, Technology, Engineering, Mathematics) background and
one third from Accounting or Finance. That said, marketing is an
urgent priority; you might be building the best widget, but no one
listens to a silent expert. Without a large marketing budget and staff
there are things you can do. Even before you launch your product,
you should be marketing, and the best marketing tool available,
word-of-mouth, leads marketing on a budget. Get people to talk
about you. You can get word-of-mouth by creating real fans. You
create fans by adding real value to peoples lives. You can add value
to peoples lives in many ways besides your product or service. You
can write tutorials and provide useful blogging content related to
your industry. You as CEO, and by association, your company,
become seen as a credible opinion leader in your in your space.
Create fans, not just users. Most start-ups dont even try.

108 You fail to establish yourself as a credible opinion leader

in your segment. Establishing yourself as a credible opinion
leader in your segment isnt something that comes overnight.
Building a coveted fan base that looks up to you for ideas takes
time and constant effort. It doesnt matter if you produce one
relevant piece of content or ten. It doesnt matter if you actively
engage on one network or on five. What really matters is that
youre saying something of value, whenever or wherever you say it.
And you providing opinion regularly and consistently.

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109 You are vague about your target market. Start ups set out to
(a) answer a perceived problem, or (b) in an abstract way, try to
answer wouldnt it be cool if we could (insert). Some start up
founders become immediately obsessed by the uniqueness of their
product and a solution that they fail to assess whether there is a
substantial market for what they are building. At the outset, the
critical action is to make sure you define, and refine, and define and
refine again, your target market. You need to be laser focused on who
will buy. Once there, test it. Find your target market, study it, live it,
breathe it, and then when you have proved your hypothesis that
there is a market for your product dominate it. To dominate it you
need to be intimately connected to and concerned with your
customer marketing communications, content and consistency is
your route to winning fans and retaining a following. A following
converts into paying customers. To many start ups believe that
searching for customers is the primary and only route to sales in
this digital age in all sectors, whether B2C or B2B, peer review and
opinion from an informed population form a strong influence on the
buying decision. This influence leads to and creates sales; you cannot
neglect building a wide fan base.

110 You ignore the need for quality content in the market
place. Establishing yourself as a credible opinion leader in your
market is the result of a constant drip feed of quality. It does not
come overnight. Creating a coveted fan base that looks up to you
for ideas takes time and constant effort. And it is an imperative
that you are saying something of value, whatever the frequency,
and whatever the network it is distributed to. Make sure that it is
something your audience is looking for and welcomes? The need for
quality content from you to your market is not a yes or no
question. It is needed from the very beginning.

111 You are blind to the market. You build a product without
having a specific user in mind. (Strange but true, it happens.) But you
can't build things users like without understanding them. Yet a
surprising number of founders seem willing to assume that someone,
they're not sure exactly who, will want what they're building. Do the
founders want it? No, they're not the target market. So who is? You
can of course build something for users other than yourself. But

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when designing for other people you have to find users and measure
their responses. If you can't, you're on the wrong track. You are a
blind man in an imaginary market.

Many successful start-ups began by trying to solve a problem their

founders had. The founder was the surrogate for a larger (hopefully,
very much larger) population of potential users. This way you can
create utility value in a solution in proportion to how well you
understand the problem you're solving (and the problems you
understand best are your own. The reverse is not true. If you're trying
to solve problems you don't understand, you fail.

112 You do not focus on sales enough. You believe (and enjoy)
that you are, first and foremost, a technology and product-driven
company. All your spare time is spent doing product stuff. As a
result, you don't get out of the office and sell your ideas and your
solution, test your ideas with people, sell your vision, your product,
and your company. You do not talk to customers, you do not go out
and sell (which is ninety per cent listening, by the way). You are
demonstrating a lack of focus on customer acquisition (need
product education sales). Customers don't just show up, even
with a great product.

113 You waste time on poor quality leads. Visits to your web
site, enquiries, people you meet are all leads. By being anxious for
sales and an expanding user base, you waste time on every lead
instead of prioritizing. The result of this, with a small team, is that
you lose time on bad leads and good leads may be deprioritised or
ignored. Simple solutions, based on limited intelligence, can give you
a broad-brush priority; you don't need a sophisticated lead and
prospect analysis tool at the outset. Focus your time on high quality
prospects.

114 You miss low hanging fruit. By treating all leads as equal you
miss some obviously easy conversations.

115 You avoid your customers. Don't operate in a vacuum.

Customers want to feel valued, they want to be in a relationship with
you / your company. (Qualified) prospects want to be recognized

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and converted. Prospects and customers give you valuable feedback
about your ideas. You need to be regularly and frequently talking to
customers. Not to sell them stuff, but to listen and to build your
relationship with them. To ask questions. A founder, and especially a
CEO, has no excuse not to be in continuous communication with
customers. Your customers should love your product. If not then
you have a real problem. You need to find out why. The only way
you can do that is by really listening and responding to their needs.
Connect with your customers on a daily basis.

116 You believe that hiring a sales person will cure your
revenue problems. At the outset, the founder/CEO must do the
sales calls. (It doesn't matter if you have never done them before).
You need to be in front of the customer and get feedback first hand
then you know if you have a product that someone wants or you
have built an Edsel. You need to figure out the sales pitch and create
a great deck that works. Once you know it works, you can get
yourself a sales person, because you cannot scale. You teach and
coach on the product, message and pitch the sales person brings
the sales experience and capacity you don't have. You provide a tried
and tested script.

117 You try to be a salesy sales guy. You think you need have
a certain persona to be your companys sales guy. You don't. Be
authentic, be yourself, be genuine thats what you customers want
to see. Sell by highlighting your understanding of the clients needs
and challenging them to think of ways to do things better the product
you designed.

118 You dont ask enough questions in sales conversations.

Many founder CEOs have not done sales. The most effective way
to break into a sales role is to tailor it as an opportunity to asking
questions and understand the customers pain points. This naturally
leads into the features and benefits of your product and how it helps
the customer the customer buys, you do not sell. Ask for the sale!

119 You think partnerships will solve your sales need. You
embark on a program to sign up partners who would sell and market
for you. Because (a) you don't want to sell, (b) you think you want

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to scale, or (c) someone else can do it better. If you cant sell the
product yourself, thinking someone else could sell it is misguided at
best and downright stupid at worse. Its your product, your company,
and your idea. Its your job to get to the market. When you are
successful and potential sales partners come to you, you can assess
whether a pivot to an indirect sales channel is appropriate or not.

120 You try to serve too many different kinds of customers.

You cant do two or more things great because, as a start up, you do
not have the time, money, or resources to figure out the product-
market fit for more than one product doing one thing. Of course, it is
exciting and attractive to try to follow new opportunities that come
up, but do not be misled. You cant be great executing two or more
product strategies, go-to-market strategies, product support
infrastructures all at the same time. The split focus will mean you will
be sub optimal on all fronts, mediocre and terrible at both. However,
IF you really think the new opportunity is better, then the only viable
option is to pivot the company and go all in. Is it worth such a
dramatic move?

121 You havent identified your ideal customer. Good (the

best) products solve a problem for a user; a user has very specific
needs, and requires a focused solution. There maybe (hopefully)
thousands, if not millions, of people with the same problem. It is this
ideal customer that you are solving a problem for and you cannot
please everyone. When you get stuck think of the ideal customer and
what they would need. (Tip talk to customers Point 114).

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 8 Mistakes about Cash
(The shortest Chapter and the most important)

122 You ignore the fact that Cash is King. Cash is the
lifeblood of your business. Without it you are dead. Cash comes from
two sources: Investors and Sales. Investors invest in businesses that
sell things ideally with an early cash break even point to make the
visibility of returns to be in sight and not in some wonderland in the
future (not all businesses are Uber and AirBNB, etc.). You, and
possibly friends, family, and co-founders, invested cash (or cash
equivalent sweat equity) into the business with the intent that there
would be sufficient runway (period until the cash runs out) to get a
product into the market and generating sales, enough to cover costs.
While it seems to have been a Silicon Valley trend to fund businesses
with distant hockey stick trajectories with vast amount of
investment over succeeding rounds, these are the rare exception to
the rule.

For ninety nine percent of entrepreneurs, you need to bootstrap and

get a product out and generate cash before your funding runs out.
Get successful to this point and focus on building a long-term
sustainable business. If you are very lucky you might be acquired
but that should be a windfall not an expectation. A long-term
successful business moving to an IPO will yield returns for investors
and the team.

If you have a track record of success then succeeding rounds of

finance from Friends and Family, Angels, Seed Investors, will keep
topping up the tank until you are cash break even or you are
demonstrating such an unassailable case that Private Equity or
Venture Capital Funds are a possibility. This latter situation is rarely
attained most start-ups go bust long before this is reached.

123 You don't keep an eye on the bank balance. This happens
more often than you might think. You can run out of money even if
you have revenues and profits. Your cash balance and rolling
~ 40 ~
projections for the next quarter and half year outlook should be on
your desk every day and viewed with the same regularity. Cash
Flow is more important than your mother.

124 You spend money on the wrong things. Cash should be

spent only on 1) customer acquisition 2) hiring and 3) employee
productivity. The classic way to burn through cash is by hiring a lot
of people too soon; they come with overheads space costs,
infrastructure costs, management time costs. This bites you twice: in
addition to increasing your costs, it slows you downso money
that's getting consumed faster has to last longer, but it is finite and
runs out early. There are three general suggestions about hiring: (a)
don't do it if you can avoid it, (b) pay people with equity rather than
salary, not just to save money, but because you want the kind of
people who are committed enough to prefer that, and (c) only hire
people who are either going to write code or go out and get users,
because those are the only things you need at first.

~ 41 ~
 10 Mistakes with the rest!
125 You believe that a visit by the accounts lady every
quarter is enough intelligence. In any high-growth start-up it is
imperative to keep one's house in order and for you, the CEO, to
have visibility of what is happening on all fronts. This requires
systems and controls. This is not just restricted to the product
development cycles, engineering resource utilization, and product
releases. You need to have a handle on your outgoings. You need to
understand your unit cost and your overheads, your service costs per
customer. Find out how much it costs you to support one more
customers on average. Make sure you are charging your customer a
lot more than their unit cost; otherwise you are a charity, not an
investible business. You cant start calculating unit cost too early. It is
key to understanding cash flow and profitability.

126 You are not calculating your cost of user acquisition. Cost
to Acquire a Customer (aka CAC) is one of the most important
metrics an online or traditional business has. To calculate CAC, you
will need to know your business numbers inside and out, which you
should already know. If you dont, then figuring out how to calculate
CAC will get you asking the right questions. Hire an accountant to
help you double-check your work and assumptions. Dont try to
skimp here, you will be grateful for the investment in information in
the future. Like unit cost, you cant start calculating CAC too early.

127 You create a complex capital or legal structure. You must

apply a KISS model to how you set up your company, both legally
and financially. Get advice from your lawyer and your accountant,
but stress with them, you want simplicity. You don't need an offshore
legal entity or a Delaware corporation if you're a solopreneur, and
you don't need three or four different kinds of stock if you never
expect to have more than a couple of shareholders. However you
start out, you can always change it. When it's simple to start with, it's
easier to accommodate change.

~ 42 ~
128 You avoid the underpinnings of a data room. When it
comes to bringing in serious investment, you will be subjected to
intense due diligence. At that point you will need a data room with
every agreement, contract, commitment, and share ownership details.
Keeping you legal documentation, accounting, etc. in order and in
place from the outset makes this a relatively simple task and it is good
discipline. It's easy for a high-growth start-up to let this slip, but if
your goal is to list your company or sell to a larger company, it's
easier to keep things tidy than to put things together after the fact.

129 You try to save on lawyers. Stop trying to get around paying
lawyers. You are running a business, maybe a complicated legal entity
that may, in time, take funding from individuals and VCs, and could
eventually IPO or be acquired. This is not a mom-and-pop business.
Do it right. Dont even try to out-smart yourself here. Expensive in
the short term? Yes. Worth it in the long term? ALWAYS. You will
regret it if you try to save too much money here.

130 You choose a bad location for your business. If you want
the best chance to succeed, you need to surround yourself with the
best community of advisors, investors, entrepreneurs and potential
hires. Start-ups prosper in some places and not others. In the USA
Silicon Valley dominates, then Boston, then Seattle, Austin, Denver,
and New York. In Canada it is Toronto and Vancouver. In Europe it
is London, Berlin, Paris, Amsterdam, Barcelona, Madrid and
Stockholm. Outside Europe it is Tel Aviv, Singapore, Sao Paulo,
Moscow, Sydney. Start-ups prosper in these cities because it is
probably the same as it is for any industry: that's where the experts
are. Standards are higher; people are more sympathetic to what you're
doing; the kind of people you want to hire want to live there;
supporting industries are there; the people you run into in chance
meetings are in the same business. If you are not already there, do
you move? Well it depends where you are. Can you get the skills you
need; if you need to bring them to you, do they want to live in your
neighbourhood. Where are your customers? In retail there are only
three rules to where you should be: location, location, location. At
some point, for your start up the same rules will apply to you.

END

~ 43 ~
I recommend that you now
read Midas and 1000 Cows

Go to www.midasand1000cows.com

~ 44 ~
About Bill Lewis
Bill Lewis is a writer, speaker, mentor, and motivator,
who helps transform businesses and people. Bill is an
experienced Corporate Executive, Non Exec Director,
and a serial entrepreneur. He is rated as an outstanding
leader with the mind of a seasoned high-level performer.
He has been referred to as a Start Up Guru.
He has served on the Boards of five companies,
including the Global Board of a major system integrator. He has also led
major businesses in Fortune 200 companies, and was the CIO at one of
the worlds largest Aircraft Maintenance organizations. He is a
consummate influencer and decision-maker at Board Level.
Prior to becoming an entrepreneur, he spent over a decade delivering
turnarounds and substantial profit improvement programs, as well as
consulting for blue-chip companies.
He co-created, with another business partner, a successful and disruptive
digital technology start-up, and has in-depth experience of the demands
of start-ups, from idea to exit, including: strategy, business creation,
execution, talent management, governance, fund raising, and exit.
Bill has worked in visual communications, digital technology, and major
enterprise-level application deployment. He has held senior positions in
airline operations, airline maintenance, airline in-flight service, and the
automotive, engineering, and maritime service sectors.
His international experience is vast covering a significant part of the
globe, with extensive experience of difficult geographic locations.
He was educated at Harvard Business School (AMP), and Lancaster
University (UK) where he was awarded an MA with distinction.
His current interests include sailing, cycling, reading, and writing; past or
occasional interests include: golf, scuba diving, skiing, and display
skydiving.
Bill has a small claim to fame (his words) for being a volunteer
emergency medic in New York, building houses in Mexico, and being an
expedition leader in Tar Desert, India, and western Nepal.

~ 45 ~
Contact
Author@thisisbilllewis.com

~ 46 ~