There are plenty of signs when your startup is catching on and beginning to thrive. But often, entrepreneurs don't know their startup is failing until it is too late. Why? Because the early warning signs often come pre-revenue, during early adoptions, and before the company begins its swift downward spiral into early death.
Starting a new company is fun. There are endless brainstorming sessions with your smart, creative co-founders where you shape and reshape a market in your image. You're on the top of the world because you are convinced that your team is more visionary and creative than any of the existing competition, big or small.
The startup graveyard is full of companies that enjoyed initial success - call it beginner's luck. But often, good news can become the worst enemy of a growing company. We call this paradox "the plateau effect." Everything we do in life follows this familiar pattern - love, playing music, learning how to swim.
An important factor for new entrepreneurs is the ability and willingness to change your business model or product mid-stream. Most successful startups have pivoted, but it's not as easy as it sounds. It's a humbling experience to admit your original vision and product was off or something went wrong.
iPhone application of Swedish music streaming service Spotify Jill Krasny | Inc.com staff The streaming music business is getting more crowded and competitive. Get ready, start-ups: A shake-up is coming soon. Jonathan Nackstrand/AFP/Getty Images Tweet Stereomood CEO Eleanora Viviani doesn't mince words on how she plans to make money off her start-up: "We want to get acquired."
Here's a lie that feels like the truth: "A mother is a person who, on seeing only 4 pieces of pie for 5 people, promptly declares, 'I never did care much for pie.'" That's a lie that turns moms into martyrs, which is not what moms are supposed to be.
Startups and bad predictions One of my favorite reads this year was Nate Silver's The Signal and the Noise which has the subtitle "Why so many predictions fail, but some don't." It covers a ton of different topics, from weather to politics to gambling, and I couldn't help but read it with a startup/tech point of view.
You have probably heard plenty of times that being an entrepreneur is a risky business, and investors talk all the time about reducing the risk. Yet everyone seems to have their own view of key risk drivers for startups, and I'm no exception.
