1. Don't spend all your money on ads early
It's so alluring. You have a day where your product becomes real. You have a marketing team, and they're excited about that day. You're excited about that day. Everyone is excited about that day.
Your customers don't care about the day. Let's be honest: You'll launch with something that's at least 99 iterations from a conversion machine. Don't spend money marketing it. You will end up having to defend your awful cost per acquisition in venture capital pitch court months later.
2. Don't do service for equity models
You meet a strapping VC/angel investor with a pocketful of cash. He will sell you on the fit of his expertise and what that means for the market opportunity that lies ahead. It seems great.
Maybe, if you're like most startups, this individual is the first "yes" you've heard in a while.
It was from someone who also took a pretty big chunk of equity at an insane premium, for "services." It could make you feel like an idiot.
3. Don't forget to spend lots of time with customers
Your customers are everything. If they're happy, they'll reward you with business.
Figure out what makes them happy. Use services like inspectlet to creep their on-site experience. Focus test them. Offer them gift cards to interview them one by one.
They have all your answers.
4. Don't focus on a single growth channel
It's very, very easy to get hyper-focused on a specific channel at the expense of other opportunities. If you follow e-commerce, you know how this story goes.
You realize you're profitable on Facebook. You spend hundreds of hours testing and honing in on a great return for that channel. You focus your team on that channel. Everyone gets excited about unit economics that are about as stable as Kim Kardashian's hair.
Suddenly, one day, it just stops working. Facebook changes the math, or a competitor comes in and raises the ad unit equilibrium price (especially common in the Google pay per click game), and next thing you know, you just lost your damn growth engine. Don't do that.
5. Don't spend money on scale in advance
"If you build it, they will come."
Not true.
Startups who have founders who are from the Silicon Valley cognoscenti or are just rich kids of instagram can occasionally raise large amounts of money with a pitch deck and a dream.
These companies burn fast out front of growth prior to having an established brand. The issue becomes one where balance sheet value and traction or income statement value are at odds. It can create a tough environment to raise additional money.
I have never had this problem.
SOURCE: INC
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