Most common mistakes that start-ups make II.

Most common mistakes that start-ups make II.

In this series of articles about the most common mistakes that start-ups make, we intend to shed light on those areas, where we have experienced repeating patterns or systematic problems. In the first one, we identified inadequate scaling as a crucial issue, which has been associated with focusing only few products or services, or even functions, inadequate amount of human resources, oversized investment and overspending as a consequence, the intention to tap too many markets at once, and the exclusive focus on profit maximisation. 

In the present article we concentrate on one particular matter, which may easily be associated with the inadequate scaling problem, although we decided to have a word on it separately. The reason is that it is so common, that we could not simply pass by without highlighting the detrimental nature of it – on an otherwise good idea, an attractive character and/or a business with a success-potential. 


Similarly to the scaling issues, it can easily be associated – improperly – with immaturity, lack of strategic development knowledge or inadequate project/process management, entailing in human resource related deficiencies, for the first glance. However, when we experience the issue in organisations run by reputable, well-educated personalities with a longer track record in the corporate environment, we must realise that the underlying problem is something completely different. Important to note that although the label suggest that the business is run by one particular person, it is not necessarily literally the case, but means that there is one person dominating the whole business, from strategy to the very operational details. 

Lack of trust. This is something that is not so easy to trace and recognise. Only the long management interviews could reveal the roots. Listening to the stories, we hear failed attempts of partnerships, unstructured arguments, resentment, friendships broken, jealousy or even betrayal. Not to mention more. 

Thinking further, behind the surface, we find impatience, intolerance, bullying, ego fights, lack of openness towards compromises, and we could continue further. All in all, what has to be highlighted here is the root cause of further management and leadership problems. If there is an organisation at all, it shows interesting – though very negative – characteristics, when it comes to operation and business conduct. Some of the major findings are the followings. 

Need-to-know basis. One of the phrases, which we hear, and immediately rings certain bells. Usually, hiring highly educated personnel and not giving them the right information base, authority and space to perform the best of them, leads to high fluctuation, disappointment, toxic working environment, and thus underperforming. Furthermore, such a negative pattern leads to contra-selection, where the ability to adapt to the unusual environment gains priority over the professional skills and capabilities. The very unfortunate outcome, even in the medium term, is the reconfirmation of the ultimately wrong approach, justifying the one-man-show being the only viable option (as noone is cabable to comply and deliver what is expected – silently). And the negative pattern is established and tends to survive. 

Dominance of fear. High level of artificially created uncertainty, lack of information, and thus relatively huge discrepancy between the expected and delivered performance give space to fear, similarly to real crises situations. In such an environment, what can be experienced is that the underlying strategies among employees are related to avoiding certain outcomes, and not to achieving particular ones. This entails in an overall defensive atmosphere, which hardly ever leads to an innovative, inspirational environment. 

Single-eye perspective. This is one of the direct consequences. The whole external market environment is seen through the eyes of that one person, who is the dominant figure, and obviously every detail is filtered through their mindset, thinking, attitude and understanding. Regardless of the confirmation of being correct, reasonable or at least worth considering. Such an approach usually leads to the loss of corporate immunity (the more eyes the more to see), meaning to create a higher risk of overlooking certain threats or delaying proper response. 

Summary and conclusion. Creating or becoming a one-man show is relatively frequent. Interesting to see when certain famous business stories are copied or set as an example. Unfortunately, we see only very few outstanding and successful examples, where it really works, almost exclusively in the short term, and the vast majority of the similar ones are destined to failure. Simply because of the aforementioned lack of corporate immunity, lack of inspiration, management and leadership problems, toxic working environment, underperforming organisation, and limited business scope. Not to go further. 

We do not state that starting alone is automatically wrong, but do state that there is a stage, where smart planning has to bring up the right questions, and committed and determined entrepreneurs must open their eyes, become honest with themselves and make reasonable decisions to give the right answers. Easier said than done, for sure, although we believe that this is what makes the real difference between those who become successful on the long term and who remain in their own traps, trying to escape through a divestment – which will just magnify the underlying deficiencies.  

Do you have questions or need some help right now? Feel free to reach out to us.

Close Menu