You may know Mark Cuban as the Owner of the Mavericks, perhaps your exposure to him may be as a technology company billionaire, or you may be more familiar with him as an investor on the hit show Shark Tank, where entrepreneurs pitch their business ideas to a panel of investors in an attempt to get one or more of them to invest their expertise and money into their venture. Along his career, Mark has seen many entrepreneurs who have made some serious missteps. This article accurately identifies three of those.
Not understanding some of the basics of business.
A prime example, according to Mr. Cuban, is when entrepreneurs “don’t know the difference between a product and a feature.” Before an entrepreneur begins looking for investment money, starts producing a product, even before research and development, they need to have this fundamental understanding. For example, if a competitor sells only blue shirts, and your shirts are blue and red, you’ve merely created a feature. Products or services solve problems and people want to purchase them. Features are characteristics that add value to products.
Thinking competition equals validation.
Falling under the spell of believing that just because you have competition, or that competition moves into your space, that your business idea is valid, is a mistake and tempts one into a false sense of security. As difficult as creating something from nothing is, convincing people that your service is valuable and that they need it, or your product, often requires much more effort. What you should do when you have competition, is to embrace the feeling of uneasiness. “It means you are in deep trouble unless you can out-innovate and outsell them,” Cuban says.
Hinging your success on one “star employee”.
Too often, business owners believe that “their next hire will solve their biggest problem,” Cuban says. “Hiring the best marketer in the industry doesn’t mean you’ll magically figure out how to sell your stuff and everyone will live happily ever after.”
Don’t put all your eggs in one basket. If your star employee leaves or fails, then so does everyone else. Growing a successful business requires all hands on deck, meaning everyone on the team needs to be pulling their weight—together.
What would you add to this list? A useful exercise might be to sit down and think of your own list of top five or so mistakes entrepreneurs make, put it aside, then come back to it and make a brutal, honest assessment of your own company’s operations, practices, and philosophies regarding the items on your list. You may be quite surprised by where this exercise takes you.