Top 5 mistakes entrepreneurs make in the early steps of their startups

Over the years of working in the IT industry, we see the same mistakes founders tend to make in the early steps of their projects. It often amazes us how entrepreneurs step in the same sh*t. Luckily there are super-teams like Moqod to save them from drowning. We hope this list helps someone avoid the facepalms in the future.

#1 Technology

We get a facepalm moment in two cases — it’s either overengineering or usage of the outdated technology stack. In one example, we can recall a client implementing a pile of microservices, NoSQL DB, and super rare APIs for a simple job. As a result, the project took six times longer than planned, and at the end of the day, it has never been launched. In the other recent example, in 2022, we saw usage of the QT platform for a cross-platform iOS and Android app and an on-premise server running on a rack in a data center. We love the 90s, but not when it comes to tech.

Our advice to all clients is to use the appropriate tech stack which can be future-proof, easily supported, has enough resources on the market, and is fit for the business goal with minimum investment.

#2 Wrong co-founder

So imagine you find a co-founder who looks perfect — he talks tech like a native, and you see a money truck pulling up at your office door. We have seen a few main pitfalls with co-founders. So be aware of these.

• Technology usage. Make sure to consult with another person about tech solutions. Yes, there is trust between the two of you, but imagine who would support his beautiful Haskell code if you break up?
• Have a clause about premature share transfer. E.g., if leaving the company within X years, the person only gets the nominal share value. There has been a case with a thriving startup we worked with that hired a CTO and gave him shares… and the person left in 6 months after the next valuation round with x2 money in his pocket.
• Sometimes the affection between the two of you stops, and you find yourself pulling the whole thing alone. Make sure to communicate this properly, both personally and contractually. You are only limited to the productivity of your weakest link!

#3 Obsession with creating another Apple or Tesla

Imitating global tech giants is the easiest way to exhaust the entire financial resource instantly. Clearly, startups don’t have such a budget to do what the industry’s mastodons are doing.

The dizzying success of startups like Instagram, Slack, and others sets the bar high for rolling out a successful business model in the shortest amount of time. Trying to repeat someone’s achievements, startup founders often declare overstated promises to investors and the team. But they should consider that an impossible task undermines the team’s spirit and is the basis for manipulation.

We advise building a unique solution according to the Lean startup principle. Keep processes simple. Do not try to be an “Apple from the banking area” or something like that. We are sure your idea worth being the one and only.

#4 Bad choice of contractors

It is often a wise solution to outsource part of your work. All of the above points are valid when working with an external partner. One that always amazed me was how customers neglect the point about IP rights. We had seen a few cases when the customer either didn’t own his IP after all payments, had to pay extra to get ownership of his IP, or his IP was transferred into a share. We advise our clients to only work with contractors who fully transfer IP to customers.

In addition, when choosing a contractor, in addition to price, terms, and portfolio, always ask how the company works with cyber security. The outsourcer must strive to ensure project security and protect sensitive data. Clarify security policies, data processing methods, and ways to protect against cyber attacks. Ask if the outsourcer is willing to sign an NDA stating the rules for sharing data and restricting access to it by others who work with cyber security.

Read more about How to choose the best software development company

#5 Miscommunication

Do you know why the biblical tower of Babel collapsed? Yes, all of a sudden, everyone started to speak different languages. That’s the first international project in history! The same is true nowadays. Most projects fail due to communication issues. Especially the ones that involve creativity, tech challenges, and international teams. The remote work trend causes the fact that teams often have people from different cultures and living in different time zones.

What’s obvious for you is not for me. We are all different. There is no silver bullet to avoid such miscommunication traps. When sending any message, it is essential to understand whether the recipient has enough information, whether there is an overabundance of it, whether the purpose of the message is clear, and whether the format of the response we expect is clear. Make sure to be wise and polite, document all changes, keep track of updates, and stay cool!

Read more about How to manage hybrid teams with nearshore and onsite developers?