Startups encounter many obstacles on the way to success, from small mistakes to industry disruptions that prompt full pivots. While some mistakes are unavoidable, that doesn’t mean you can’t prepare for the worst and get the smoothest possible start.
Check out the 10 things I wish I knew before launching an engineering startup.
1. The Business is the First Priority
Many startup founders are driven by their passion, such as fashion, culinary, web development, PCB design. Because of this, one of the first “reality checks” is when they realize running the business isn’t all passion all the time.
Your day-to-day operations will take up most of your time. Running the business is the first priority, whether that’s developing your marketing strategy, handling administrative work, or networking. The time you spend on your actual passion is minimal, at least in the beginning.
2. You May Fail
No one wants to think about failure, but it’s the unfortunate reality of many startups. Of course, this doesn’t mean your startup is guaranteed to fail – just that you have a lot of odds stacked against you.
While you’re creating your startup, build an emergency fund and hold onto side gigs. If you fail, you’ll be thankful for the safety net.
3. Customers Drive Your Business
If you think the main goal of your business is revenue, you’re missing the big picture. Businesses don’t succeed when it’s all about profits. They succeed when they create products or services that address customers’ pain points.
For example, the market is saturated with 2-layer circuit boards, but the quality varies. Customers are still looking for enhanced heat resistance and conductivity, so if you could satisfy that need, you can differentiate yourself from competitors.
4. Count on Yourself
Employment at a company has its downsides, but it also offers a sense of community and a group of like-minded people. You can learn from others and ask for help when you need it.
Startups are different. You founded it, so all the responsibility falls on you. If you have a small team, you can delegate some tasks, but you’re still relying on yourself.
5. Keep Your Part-Time Job
Launching your startup will take up a lot of your time, but it’s best to keep your day job as long as you can. If your responsibilities become too much, switch to part time instead of quitting.
Keeping part-time work gives you the stability, security, and peace of mind of knowing you have money to handle your financial responsibilities.
6. Engage with Customers
Customers are savvier than ever. They want to support companies that have a human element and align with their values. Startup founders tend to put this on the backburner and focus on the product first, losing the customers in the process.
You can engage with your audience and show your prospective customers who you are as a brand and how you’ll solve their problems. Taking this extra time early on can pay off in future loyalty, retention, and conversions.
7. Manage Your Cash Flow
Cash flow is the money you have coming in and going out. No matter what industry you’re in, managing your cash flow ensures that you have the money to keep operating without considerable debt.
Even if your business grows quickly, keep careful watch over your cash flow and budget carefully. You never know when an unexpected expense or market turn can impact your revenue.
8. Outsource When You Can
You may have the skillset to handle every aspect of your business on your own, but that can lead to burnout and mistakes quickly. Many tasks that are vital to your business, such as accounting, web design, and branding, can be outsourced to free your time.
If your budget is tight, many of these tasks can be handled by contract workers as needed, such as writing, web design, marketing strategy, and graphic design.
9. Watch the Competition
Even if your product is superior to the current market, your competitors have a strong impact on your brand. Customer service, pricing, marketing, and audience all indirectly influence your business, so you need to watch the competition.
Look at your competitors’ websites and social media to see how customers perceive them and what they think could be better, then use it to improve your own business.
10. Have Fun!
The early stages of a startup can be mentally and physically draining, so make sure you don’t let it consume your life. Whether you take a full day or just put work aside early a few nights a week, be sure to spend some time with hobbies like reading, exercise, or socializing.
Even with the best planning, mistakes can happen. When you’re prepared for some of the common pitfalls, however, you can prepare yourself and manage disruptions to keep moving forward.
About the Author: Justin Ou
Justin Ou is one of four Co-founders and Marketing Manager of Gerber Labs, an Orange County based engineering startup that is currently rolling out a platform that makes custom printed circuit boards (PCB’s) accessible to electrical engineering students, hobbyists and small businesses.