What is the biggest mistake that startups make?

I was asked today my opinion on what the biggest mistake startups make is. I work in online advertising and meet with a large number of new startups. The most common problem I have observed is a lack of solid business plan and/or revenue model. Often theses startups will come in and ramble on about their idea and how it will change the world but they haven’t really thought about it from a business standpoint. How are you going to produce the product? How are you going to market it? How are you going to make a profit? What does the competitive landscape look like? How will you attract investors?

Sadly, many of theses startups are already into their business and haven’t answered these questions. Many of the founders have quit their jobs and began burning their life savings. Money goes fast in a startup, especially if there is no practical revenue model. My suggestion is to throughly vet your idea internally. Figure out how you will make money and come up with a good plan for getting to market. I would also suggest finding some experienced advisers and mentors, people with business experience to review and provide feedback on your plan before you get started.

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