9 Mistakes of First-Time Entrepreneurs
1. Not Planning
Many people believe that if they build a business, customers will naturally come. However, this is not "The Land of Dreams." Regardless of the type of business you are running, for it to operate smoothly, you need more than just offering a product or service. Business requires you to truly enter the market and build relationships with target customers.
2. Misjudging the Abilities of Co-Founders
If your co-founders cannot complete their assigned tasks, or worse, are unreliable, your business is sure to fail. Evaluate those co-founders as you would a potential employee. And once you find the right person, make sure to give them certain authorities.
3. Working with Friends
Business and friendship are two things that should not be mixed. Working with friends can lead to a lack of mutual respect among colleagues, and moreover, your personal relationship will be affected when conflicts arise at work. Therefore, instead of choosing friends you are too familiar with, seek talent at social events you attend to build your team.
4. Being Overly Arrogant at Work
In a startup environment, "If you don't do it my way, get out" is not a work principle; instead, it should be "How do we need to collaborate to achieve better results?" You are the founder, but you are not the most important person in this business. The vision for the company's direction and the corporate culture are much more important aspects.
5. Not Testing the Market
If you do not test beforehand to see if your product is a viable option, you may waste months or even years of time and money. Therefore, test and gather feedback from the market even before you start establishing your business.
6. Trying to Reach Every Customer
When you cast a net into the sea hoping to catch every creature below, they will break the net to escape. In the end, you return empty-handed. Refine your messages and target each group in different campaigns.
7. Starting a Company Alone
When you are the sole founder, you will be overwhelmed with a mountain of work. Every responsibility weighs heavily on your shoulders. Instead, learn to delegate. Assign responsibilities to those who respect your weaknesses.
8. Putting Business Expenses on Your Personal Credit Card
Many experts suggest that when you invest, only invest what you can afford to lose. Otherwise, you will get caught in a pile of debt and sooner or later end up bankrupt and lose everything.
9. Delusions About Your Business
No business can be that wonderful. No idea can "change the world," except for hard work and decisive action. Be humble about your ideas and don't act like they are revolutionary because they are not. Now that you are fully aware of the potential mistakes and how to avoid them, focus on what you can do to turn your ideas into reality. Aim for a single outcome, which is the pinnacle of victory.
What Do Young Entrepreneurs Need to Do to Build a Brand?
Initially, when "coffee king" Howard Schultz proposed to buy Starbucks, the brand only had 3 stores, and today Starbucks has over 22,000 stores. In 2016, Schultz realized his lifelong dream by opening the first store in Italy – a country famous for its coffee enthusiasts and notoriously resistant to the American "take away" culture. Similarly, when Leslie Wexner – the mastermind behind the billion-dollar brand Victoria’s Secret – opened the first The Limited store, he only hoped to develop 3 or 4 more stores. Currently, Wexner owns 3 famous lingerie brands (Victoria’s Secret, Pink, and La Senza), capturing 41% of the U.S. market share, creating over 10,000 stores, and generating $8 billion in revenue annually just from the Victoria’s Secret brand.
Among the successful entrepreneurs in building and developing brands, we cannot forget Brunello Cucinelli – the king of the cashmere world – the rarest natural fiber often used for sweaters, scarves, etc. When Cucinelli chose to buy his first 24 kg of cashmere, his goal was merely to make money from knitting sweaters, then get married and live a normal life. However, as of now, Cucinelli has 125 stores located in the wealthiest urban areas of the world along with a company valued at $1.5 billion. The common point of these three entrepreneurs is that none of them had a clear vision of their business destination in the future, but in return, they had energy, curiosity, courage, and the ability to adapt quickly to circumstances. Their business stories are valuable lessons for entrepreneurs in building iconic brands, analyzed and introduced by Silverstein on the Harvard Business Review page.
Customer Orientation
From the beginning, Schultz, Wexner, and Cucinelli all saw themselves as serving customers in various roles: founder, supervisor, brand manager, financial director, employer, and customer psychologist. They knew that many potential customers do not know what they want, so they do not seek definitive feedback from these individuals. Of course, every leader wants to see clear reactions from customers regarding the products or service quality their company provides, but they know that user preferences always change based on what users can see, touch, or feel. In reality, customers do not spend much time coming up with new ideas themselves. They cannot predict their own behavior and often compare everything with the current situation for reference. Therefore, in many cases, entrepreneurs often choose to develop new content based on what already exists. If in the creative phase, entrepreneurs should seek truly novel ideas that can attract even the most indifferent individuals. You need to create reasons for customers to buy the product and reasons for them to show it off to their friends.
Ability to Adapt to Circumstances
In the brand development phase, entrepreneurs need to deeply embed the brand content in consumers' minds. This is not an easy task, requiring the creator to know how to tell stories and convey brand content through that story. The purpose of this is to identify customers' hopes, dreams, dissatisfaction, and fears to understand them better, thereby devising appropriate strategies to meet specific and unique needs corresponding to each customer group. Wexner shared: "Entrepreneurs are those who understand better than anyone the difficulties in building a brand. They understand that brand value is fragile and easily destroyed, and competition is inevitable if they want to succeed in business. Additionally, in sales, even the most loyal customers only 'stay' with a product for about 32 seconds. That is why you cannot and should not trust consumer loyalty, because in life, everything can change." It is known that besides being the Chairman and CEO of L Brands – the parent company of Victoria’s Secret, Leslie Wexner is also famous as a master in the retail industry. He has achieved many successes in his career, from opening stores, designing, selling, pricing, promoting, engaging employees, to creating visual excitement, and especially in the field of creativity. He has a natural marketing skill, quickly identifying customers' latent needs, and is sharp in attacking niche markets. "If you do not quickly familiarize yourself with changes in the environment, you will lose the ability to adapt to them. Either you will be eliminated from the game, or you will rise to a new height," Leslie Wexner shared.
To Succeed Even If the Brand Is Not Leading?
According to Mark Di Somma – a branding expert and a regular contributor to Branding Strategy Insider magazine – many companies cannot resist the temptation to simply chase after a brand they think is leading the market, their biggest competitor, at all costs. In reality, there have been many such races in various markets, from beverages, fast food to smartphones, airlines… with the ambition to dominate the market and "crush" other competitors. Di Somma warns that what is noteworthy is that such battles often drain a lot of energy from companies but hardly change consumer sentiment towards brands. So what should a business do if it is always in second place? According to Di Somma, the best strategy is to maintain your second position while creating differentiation. Once you are in the top 3 in an industry, your brand has been established as "having a long-standing operation and reputation" in the eyes of consumers, and therefore needs to leverage its strengths in scale and technology to maintain that position, while also creating differentiation from the number one competitor.