Here are 18 of the most common mistakes made in the start-up process :

1. Lack of focus on the best application of the technology and the needs of customers

   It is far too easy to get excited about all the potential applications and additional features that are technically possible. It's necessary to have a laser targeted focus on the customer's requirements for whatever is the best application for the technology. Lack of focus will scare away investors and kill a startup.

2. Delaying finding a Food and Drug Administration (FDA) expert

   The FDA regulatory path and navigating it successfully is a whole topic unto itself and cannot be adequately addressed here. Suffice it to say that it is important to find someone who is highly regarded to guide you through this area. If you do not, then this can cause problems later.

3. Delaying considering reimbursement issues and the economics for the relevant physicians

   Again, individuals with experience in epilepsy therapy reimbursements should be consulted early on.

4. Expecting to keep control of the company and over 51% of the equity ownership (or wanting to remain CEO when it is time to find a different role).

   One of the most common mistakes is failing to grow the company because the original founder was obsessed with retaining control and unwilling to share equity or control with anyone else.

5. Not having a short elevator pitch

   Communication is key. If you cannot communicate the idea clearly, quickly, and with enthusiasm for why it is important and who will care, then you don't have anything.

6. Being inflexible

   Sometimes you have to be flexible with the direction of the start-up or with how the IP can be used.

   This is related to the first point, but often a scientific founder will bring in cofounders, but then handicap them by being unwilling to consider other applications or paths to commercialization. This is also why sharing a vision with your cofounders is important.

7. Not understanding the competition

   A good entrepreneur should look into this almost immediately, but nonetheless, it is worth saying again that it is vitally important to understand where you fit among all the other competitors in the field (and there are almost always competitors). Do not fall into the trap of thinking that you have no competition.

8. Not talking with enough people about your idea

   A much greater risk than having your idea stolen is simply not talking to enough people about the idea.

9. Never getting started or trying to perfect the technology

   Commercial technology does not have to be perfect. It simply has to meet the requirements of the target customers.

10. Not being careful about selecting entrepreneurs and co-founders

    One of the great difficulties that investigators face is that they often simply do not have business people in their networks. Do the hard work necessary to network and identify the highest quality people possible to help commercialize your ideas.

11. Not being careful about selecting investors

    They are doing due diligence on you, but are you doing your due diligence on them as well? Having intelligent investors who have experience in your part of the industry is invaluable. Pursuing investors that do not fit your market size, technology stage, or industry can be disastrous.

12. Pursuing a market that is too small

    For every scientist out there with a game-changing, market driving technology, there seem to be 10 with a minor modification or a brilliant technology with a market of 10 other people. The general rule of thumb is that you should be targeting problems with a billion dollar market. There are important exceptions to that rule, but in general, aim for the biggest market you can.

13. Thinking that you can handle the business AND the technical issues (or thinking you can do it alone)

    Scientists and engineers often seem to think initially that the business side is easy in comparison to the technical side. It may be true, but it is better to bring in people who have already made and learned from their mistakes, then to have to reinvent the wheel and learn the business side along the way.

14. Not bringing in enough co-founders

    Studies of entrepreneurship show that, on average, having more cofounders is associated with a higher likelihood of funding, growth, and success. Up to 5 cofounders can be beneficial. Studies also show that teams that are more balanced between sales and marketing founders and scientific founders do better. Starting a company is a lot of work, so you will need help!

15. Hiring low quality people (or not vetting people enough)

    This is probably one of the most common reasons for startup failure or lack of growth.

16. Not checking for dominating patents
17. No agreement on ownership or role by founders

    Many founders attempt to just split the equity evenly. Down the road this often causes problems when one founder is doing much more of the work. The more you can agree on roles and ownership before significant money is at stake, the easier life will be and the greater the chances for succeeding.

18. Agreement on terms with VCs prior to obtaining a
    license from the university

    There is no benefit to taking chances unnecessarily, so go through all the proper steps to obtain and negotiate a license to the technology from the university before pitching to venture capitalists.

References