By Olanrewaju Oniyitan
Why is making mistakes like a taboo especially in Nigeria?
Growing up in Nigeria where all our parents were the best student in their class and failure was met with either serious spanking or grounding, is one of the factors that I think is responsible for the current perception of making mistakes by most adults. Don’t get me wrong, making mistakes can be costly but there is something about making “good” mistakes especially when we are relating it to entrepreneurship. The fear of being called a failure or making a mistake is the major reason why most ideas never see the light of day. In my entrepreneurship journey over the years, I have this understood this much about mistakes:
◦Mistakes can be a source of learning and opportunity…..remember to learn and not make the same mistake over again
◦If you do not make mistakes, you are probably not taking enough risks
◦One person’s failure can be another’s success
However, recently I had the opportunity of listening to a very intelligent Professor of Entrepreneurship from IE Business School, Spain – Prof. Peter Bryant at a Breakfast Seminar held at the Wheatbaker Hotel, Ikoyi, Lagos, NIGERIA. I was able to attend by virtue of being a alumni of KPMG Professional Services. IE Business School ranks number 2 worldwide in finance schools, according to the 2012 ranking of Master’s in Finance degrees, published by Financial Times. It is also recognised as a leader in Entrepreneurship.
So back to what I learnt from Prof. Bryant……….. Based on his many years of experience, there are some mistakes that should be avoided because so many entrepreneurs have made the same mistakes and it will be outrightly s****d for any entrepreneur to fall into that same hole. I have modified some of Prof. Bryant’s points to suit the Nigerian context.
So what qualifies as the 10 Top mistakes entrepreneurs make and how do you avoid them?
Mistake #1: Ignoring the Competition
Some entrepreneurs claim to have no competition, or that incumbents are not a threat while others analyze the competition once, then ignore future threats until it´s too late.
Avoiding Mistake #1: Savvy entrepreneurs must learn to search widely to identify current and potential imitators. Check often – competitor initiatives and startups may be difficult to see. Ask yourself: Does the market really exist if there is no competition?
Mistake #2: Customers will Come
This is a statement that I hear a lot – “Our product and service is so compelling that customers will automatically want it“. What a mistake….. My other favourite “We know that customers want our product because we talked to a few friends about it“
Avoiding Mistake #2: Get out of the building or even the state or the country (depending on your target market) and speak to potential customers often. Do not assume that customers will change their behaviour. Culture plays a lot in their decision making. Do not ignore customer feedback and subversion of your products
Mistake #3: Winning 1% of a N1billion Market is Easy
In our review of business plans over the years, we see entrepreneurs that optimistically aim for 1% of a huge market and think this should be easy and conservative. This suggests a shallow analysis of market realities and niches.
Avoiding Mistake #3: You need to recognise that any share of an attractive market is difficult. Develop a deep understanding of market niches.
Mistake #4: We Need to be Certain
Some entrepreneurs often develop detailed plans and do too much research before making decisions. This is what I call “Analysis Paralysis“. This is a state where entrepreneurs refuse to make decisions while their assumptions are not proven. They seek certainty and avoid uncertainty.
Avoiding Mistake #4: In dynamic markets, try to act fast. Gather information quickly and look for evidence of high risk and reward. Learn by doing and experimenting. Remember that the worst decision can be making no decision. To learn more about avoiding this mistake read our article “Get It Right The First Time” Is Not Your Friend.
Mistake #5: No One Will Find Out
In Nigeria, the word “Ethics” has become a relative term. Some entrepreneurs make unethical decisions, hoping no-one will discover them. They compromise their values because of pressure and blind ambition
Avoiding Mistake #5: Make your core ethical values non-negotiable. Recognise that a good reputation and trust are important assets. In times of crisis, a moral compass supports wise choices. Do what is right.
Mistake #6: Investors before Customers
Many start-ups always make this mistake. They put investors before customers. They chase capital, not revenues
Avoiding Mistake #6: Make customer acquisition part of your funding strategy. Strong revenues improve valuation and reduce financial pressures. Smart investors want to see real customers, not just a business plan.
Mistake #7: Our Website Looks Great
Some entrepreneurs think that a web site and Facebook page are a marketing strategy. They focus on media impressions, page views and facebook likes, not real customer contact and acquisition.
Avoiding Mistake #7: Get close to your potential customers early and often. Drive marketing and sales through channel management and deep customer relationships. Use entrepreneurial marketing strategies such as buzz events, social networks and free media.
Mistake #8: Not Managing Cash
Some entrepreneurs burn cash too fast, without understanding their runway to revenues. Others raise money, then think of ways to spend it.
Avoiding Mistake #8: Understand how long your cash must last to achieve revenues. Don’t seek too much cash – it can make you careless and complacent.
Mistake #9: Waiting Too Long To Adapt
Some entrepreneurs commit to a plan and refuse to change it. They are so bent on doing it the way they planned it or wait for so long to obtain conclusive evidence before adapting their strategies.
Avoiding Mistake #9: In dynamic markets, assume you will need to adapt quickly. Look for early signs of change and threats, then get ready to pivot. Remain flexible in your decision making processes and routines.
Mistake #10: Not Learning From Mistakes
Some entrepreneurs refuse to admit mistakes – they see it as a sign of weakness or shame. Therefore they do not learn and are more likely to make the same mistake again
Avoiding Mistake #10: Take responsibility for mistakes and acknowledge them. Establish processes that allow fair mistakes to be diagnosed without blame or punishment. Accept and welcome good mistakes, while avoiding stupid ones.
So there we have it. The 10 top mistakes entrepreneurs make and how to avoid them adapted from the seminar by Prof. Peter Bryant. Have you made any of these mistakes or there are some mistakes you think should be on this list? Please share your experiences or comments.
To your accelerated success!