Welcome to the “CEO Series”. Here, we talk about how entrepreneurs learn to become great CEOs, as the greatest technology companies in history, most often than not, are led by people like them.
What doesn’t kill you make you stronger.
In the course of starting a business, some mistakes would cause long-term and irreversible consequences; an entrepreneur should learn about them and try to avoid them before they themselves make those mistakes.
On the other hand, there are some kinds of mistakes, while not causing too much damage, would even teach the entrepreneur and his team great lessons that would benefit them for life. These mistakes could actually be seen as a part of entrepreneurship, lessons that you have to learn the hard way.
Thinking That It’s Just About “Marketing”
You think your product is great; it’s just that the consumers don’t know about it. So the emphasis naturally falls on more “marketing”. Only after you have invested on it, then you realize there are huge problems with the product in terms of its conversion rate, retention rate, repo rate and recommendation rate.
So people come, and they go, rankings rise, and they drop. No matter how much downloads you’ve promoted, the number of active subscribers stay the same.
It’s okay.
You fall for it once, lose a few hundred thousand dollars or even a few millions dollars; the next time you would know that you should first refine your product, wait for its natural growth to happen, then boost it with advertisement.
Thinking That Your Team Can Solve All The Problems
Even though you still don’t have a business model that works perfectly and although the cost is much higher than the revenue (Cost Per Acquisition >> Lifetime Value), as long as you hire bright people, build up your team, the problems would solve themselves.
Finally, you get all the people you need, but soon you realize that you have accomplished nothing but increase your expenses and cost. The runway before you is getting shorter and your business model is not showing any progress.
In the end you will learn that super smart people who can come up with effective strategies and upgrade your business model really exist, but they are occupied with their own businesses and it is almost impossible to join your team at this moment.
Wasting Your Money On Decor
Due to the battle to win talented employees and since Google’s offices are very sophisticated, so I too, have to create a top-notch working environment for co-workers.
After you move into the newly furnished office, then only you realize that the facilities that were carefully planned, for example the bar, are hardly made use of.
Very soon, there would not be enough working space, then there is nothing you can do but to remove the renovation and change it back to an office. And then the same thing will happen to even the conference room, and you may end up moving the office and your initial investment would be money just flushed down the toilet.
It’s fine, you’ve committed the mistake once and you would be more pragmatic the next time round (and you would also discover that salary, location of the office, working culture, employer, and the team are much more important to attract and keep your talented staff, instead of the office decor).
Entering Super Star Invincibility Mode
When your business is on the rise, and things are working well for you, you would enter the Super Star Invincibility Mode, thinking that your company is so great and everything you do will turn into success.
Plus, you have constant incoming flow of cash as your perfect financial support. So you forget about physical constraints and begin to set unrealistic goals, putting your company at great risk.
Later, these new projects will begin to fail one after another, because you’ve made the same mistake that other failing companies have made – having only money but not a leading team that can carry out the work.
What’s worse is your core business will begin to suffer from slowdown, or maybe even start to suffer a loss. This would shift your attention back to your core business, and then you will have learnt the importance of first having a solid foundation and expanding your business with a careful mind.
Not Developing Solid Supply Chains
Just when you have discovered a business model that has a very high potential for scale expansion and you are busying expanding your business model, you treat the supply chains as resources that you can easily replace, or even make profits at their expense.
However, when some other opponents that are more proactive and have stronger capital than you enter your industry one after another, then you will be defeated and those on your side might even forsake you. Having taken that lesson, you would then learn that it is crucial to treat all your partners with more respect.
This article is originally written by Jamie Lin, a well-published author based in Taiwan. The article is translated from Chinese by Loh Sin Yee and is reproduced here with permission. Images were added into the article for visual purposes.