The Sixteen Mistakes Entrepreneurs Do Not Have to Make by John Osher
For the course "Entrepreneurship in Technology Ventures" I came across a paper prepared by the Harvard Business School, talking about Dr. John's Products, Ltd.
Basically it explains the situation between 1999 and 2000 in the automatic toothbrush industry. John Osher, an already well known entrepreneur, tried to get into the automatic toothbrush industry with a revolutionary price of $ 6.00 per toothbrush in times where automatic toothbrushes were around $ 50.00. This saturated market was run by big competitors like Braun and Colgate. What I didn't know was that John Osher was the same man who invented the SpinPop, which is a spinning lolipop (I definitely had one of these, good stuff.), so he already had a little knowledge in the "handheld spinnners" industry.
During the creation of Dr. John's Products, Ltd. John Osher wrote "The Sixteen Mistakes Entrepreneurs Do Not Have to Make" and I thought it would be really nice to share them with the world (if not already well-known, anyway). I think we can definitely learn something from these points, although we work in a totally different branche.
Wrong Expectations Mistakes (1-6) and General Mistakes (7-16):
Miscalculate size of market, timing and ease of entry, as well as potential market share.
Underestimate financial requirements and timing. Run out of money.
Over-project sales volume and timing. Fall short of sales projections.
Cost projections too low. Costs are higher than budgeted.
Hire too many people and overspend on offices and facilities. Overhead too high.
Lack contingency plan for shortfall in expectations.
Have too many unnecessary partners.
Hire for convenience rather than skill requirements.
Lack continuous overview of company, manage in parts.
Accept "not possible" too easily rather than "find a way".
Too much focus on sales volume and size of company rather than profit.
Seek confirmation of one's actions rather than seeking the truth.
Lack simplicity - create too complicated business that requires too much talent to execute and manage.
Lack clarity of ones long-term aim and business purpose.
Lack of focus and identity. Too many distractions at once.
Lack exit plan and strategy.
I think the miscalculation mistakes are useful, but more important to people actually selling a physical product with a huge production industry behind, etc. Nonetheless miscalucating important numbers can be deadly for startups. I especially like mistake No. 5, I mean how many people overspend on offices before they actually make ANY money? They hire a VP for this an Executive for that, but forget the real business model. mistake No. 9 is really hard, especially when you grow fast and get big in a short amount of time. But here comes organical hiring into the play. Hire as you grow. Lack of simplicity (what up, 37signals?) is so true, John Osher built a rolling lolipop, man!
The general mistakes are definitely useful for all entrepreneurs. When it comes to learning from entrepreneurs, I don't select by branche, I try to learn from everybody, real-life work experience trumps theory everytime, true story.
When doing a little research I also found this:
17 Mistakes Start-Ups Make
