We’ve all heard the expression, “You only have one chance to make a first impression.” While you may be lucky enough to have more than one chance to succeed with a start-up, things will clearly go more smoothly if you avoid the most common pitfalls new company managers fall prey to. In a recent blog post at VC Deal Lawyer, Chris McDemus has assembled a list of 15 mistakes commonly made by start-ups. Here’s a look at four of the most deadly:

Not having a clear business plan. “The mantra here is focus, focus, focus,” advises McDemus. “If you try to become all things to all people, you will likely end up being nothing to nobody.” Investors, he says, back business plans that are clear and show some rational path to acceptable returns.

Failing to identify a market for your product/service. Having and developing a product or service is one thing, but finding someone to buy it is a whole different story, says McDemus. “Unfortunately, some entrepreneurs make the mistake of investing time and money into building the product or service before they’ve even considered who is going to buy it or how you are going to market and sell it to them,” he says. “Inventors that most often suffer from this mistake are the founders themselves, friends and family and, sometimes, angels. Very often it is the technical entrepreneur who may get caught up in this problem as their skill set tends to focus them on product capabilities and features, and maybe not sufficiently on the need for those capabilities or features by the potential customer.”

Not being able to re-invent as you go. McDemus cites as a positive example the movie Heartbreak Ridge, with Clint Eastwood starring as a gunnery sergeant in the U.S. Marine Corps. “Anytime his soldiers would run into an obstacle or an unexpected problem, he would tell them ‘improvise, adapt and overcome,’” says McDemus. “This is the perfect mantra for an early-stage start-up.” Even the “best laid” plans run aground, he notes, and you need to be able to turn the ship on a dime and possibly take a different route to address a problem.

Failing to build a sustainable business around intellectual property. “Intellectual property is only one leg of the stool; you need all of the legs if you want the stool to stand and not wobble or fall down,” says McDemus. “The only way to monetize intellectual property is to build a sustainable business around it. This is the gap that technology transfer offices at the university level try to overcome on a daily basis.” IP, he notes, is created as part of the academic or research and development process, and the university or professor desires to realize some value from that IP. “However, the university lacks the other legs to the stool and has to seek the private sector’s help to fill in the gaps,” he notes.

Source: VC Deal Lawyer

Posted December 15th, 2009 under Intellectual Property Marketing

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