The 6 biggest mistakes you should avoid while building your product

What are the most common misbeliefs people have when starting a business and what can you do avoid them in order to get to success fast?

I am Chris and I am a techie by nature. I worked in engineering and executive roles for the last 10 years. During the past 5 years I spent my professional life building and scaling startups.

I worked at a Corporate Venture Builder which partnered with corporates with revenue greater than $1 billion a year to build startups independent from their main business. After that I was CTO and cofounder in a SaaS startup ($1.4m pre seed round), now I support clients in building new ventures and startups for their own.

Over the years I identified several patterns of misbelief for first time founders or people starting a new business in general and I wanted to share the most common ones with you fellow Indie Hackers. So I compiled this list of six common misbeliefs with solutions on how to avoid them.

BTW: I let AI generate the burning money image above, hilarious how it positioned some Nicolas Cage looking head next to another one on that banknote. 😂

1. Believing that having a great idea is enough 💡

The risk of believing that having a great idea is enough for starting up is that it can lead to an overemphasis on the idea itself, and a lack of focus on other important factors such as market research, customer validation, and execution. A great idea is just the starting point, and the success of a startup is determined by how well the idea is executed, how well it fits into the market, and how well it solves a real problem for customers.

To progress once you have an idea, it's important to validate the idea by conducting thorough market research and customer validation. This involves identifying your target market, understanding their needs and pain points, and assessing the potential demand for your product or service. You can do this by talking to potential customers, conducting surveys, and analyzing market trends and competitor offerings.

Once you have validated the idea, you can then start to develop a business plan and determine the best way to execute on the idea. This may involve building a prototype or minimum viable product (MVP), testing it with early adopters, and iterating based on feedback.

Validation is crucial because it helps to ensure that you are building something that people actually want, and that there is a real market need for your product or service. It also helps to reduce the risk of building something that nobody wants, and wasting time and resources on a product that will ultimately fail in the market.

While having a great idea is important for starting a startup, it is not enough on its own. Validation through market research and customer feedback is crucial for ensuring that your idea has real potential in the market. Once you have validated the idea, you can then focus on executing and building a successful business.

BTW: This is the most common mistake I see: People think their idea is great without validating it. They start building (partially even for months and years) and ultimately end up with a product that nobody wants, realizing that they wasted a lot of time and money.

Solution: Don’t be ego driven! Accept that your idea might be something that nobody needs. In fact, validate your idea with a three step process:

Conduct user interviews: Before you build anything (be it no code or writing your first line of code), you should conduct user interviews with the core market. As a preparation, of course, you should know what your core market and who your user persona is. Goal is, to identify if your initial idea really solves a problem and what exactly the problem is.
Build a prototype: Next step is to build a non-working prototype that gives early adopters the chance to test if your idea solves their problems (the problems you identified in step 1). Only if you know that early interviewees find your prototype would be classified as a viable solution, start writing code. Prototype could be anything from sketches to wireframes to a realistic looking click dummy.
Build a MVP: If you validated your prototype, start building the MVP and build a proper product out of your idea.

In each of these phases, you should assemble hypotheses about your product and your users that you validate (and invalidate!) to sharpen your idea. Be ready to adapt and pivot in each of these steps. Only if you passed the MVP stage, you are on the way to building a proper product and you have enough clarity and should have confidence now that your idea space is viable. In most cases the MVP and its iterations are a very different thing from what you initially had in mind.

2. Misbelief: Building a product without doing market research 📈

One of the biggest risks for a business is having a core market that is too small or not willing to buy. This can result in a lack of revenue, profitability, and long-term sustainability. Some of the specific risks and challenges associated with this situation include:

Limited revenue: If your core market is too small, you may not be able to generate enough revenue to cover your expenses and operate the business successfully.
Limited growth potential: A small market can also limit the growth potential of your business. If there are only a limited number of customers, you may not be able to expand your customer base and grow the business over time.
Difficulty in attracting investment: Investors may be hesitant to invest in a business with a small market, as it can limit the potential for a return on their investment.
Increased competition: A small market can lead to increased competition, as other businesses may be competing for the same limited pool of customers.
Difficulty in achieving profitability: If your market is not willing to buy at a price that allows you to make a profit, you may struggle to achieve profitability and long-term sustainability.

When a startup founder does not properly do market research, they risk running into the above challenges and potentially wasting money and time. Market research helps a business to understand their target market, the size of the market, the needs of the market, and the competition in the market. Without this information, a startup founder may invest significant time and money into building a product or service that is not aligned with the needs and desires of the market. This can result in a lack of revenue and profitability, and potentially even failure.

Having a core market that is too small or not willing to buy can pose significant risks to a business. Proper market research is crucial for identifying and understanding the size and needs of the target market, and for ensuring that the product or service being developed is aligned with the needs of the market. Failure to do proper market research can result in wasted time and money, and potentially even business failure. Finally, we don't simply build to build but to serve a higher purpose: We create added value for the user and this has to reflect in some form of economic viability. There might be some cases that don't involve money, but bear in mind: Every project needs users. Market research enables you to figure out if you can win an audience and how big it can become.

Solution: Do proper market research! Here are some tips for finding and analyzing existing data:

Census data: Census data is collected every 10 years in the United States and can provide valuable information about demographics, income, education, and other factors that can help you understand your target market. The U.S. Census Bureau provides a wealth of information on its website, including demographic profiles of states, counties, and cities. You can also use the American FactFinder tool to search for specific data points. Many geographic target markets have similar services that you can use.
Industry reports: Many industries have associations that collect and publish data on industry trends and performance. For example, the National Restaurant Association publishes annual reports on the state of the restaurant industry, including trends in consumer behavior and spending. Other sources of industry reports include IBISWorld and Euromonitor International.
Market research studies: Market research studies can provide in-depth insights into consumer behavior, attitudes, and preferences. Companies like Nielsen and GfK conduct market research studies on a wide range of topics, from consumer packaged goods to media consumption. Many market research studies are available for purchase, but you can also find free reports on websites like Statista.

When analyzing existing data, it's important to keep in mind that the data may not be specific to your particular business or target market. You most probably need to do some additional research to extrapolate insights that are relevant to your business. You should also be critical of the sources of the data and consider any biases that may be present.

Overall, analyzing existing data can be a valuable way to gather insights about your target market and industry. By combining existing data with other forms of market research, like surveys and interviews, you can develop a comprehensive understanding of your market and increase your chances of success when starting.

3. Not having a clear business plan ✍️

Once you have validated your problem space and your target market, next step is to create a business plan. This one is often conceived as administrative overhead by first time founders, but - if done right - having a defined business plan (that has to be adapted over time, of course) is a huge asset. On the opposite, not having a clear business plan can lead to misdirection and confusion and ultimately many projects are abandoned in this phase. Everyone of us heard of the infamous shiny object syndrome that oftentimes kicks in now.

One of the biggest risks of not creating a clear business plan is confusion and uncertainty. Without a clear plan, it can be difficult to determine what steps need to be taken to achieve business goals. This can lead to wasted time and effort, as well as missed opportunities. Additionally, without a clear plan, it can be difficult to communicate the goals and objectives of the business to potential investors, partners, and employees.

Another risk of not creating a clear business plan is a lack of direction. Without a clear plan, it can be difficult to stay focused on the most important priorities and activities. This can lead to a lack of progress and momentum, and can ultimately hamper the success of the business.

On the other hand, creating a clear business plan can have many benefits. A business plan can help to define the goals and objectives of the business, and can provide a roadmap for achieving those goals. This can help to ensure that everyone involved in the business is working towards the same objectives, and can help to avoid confusion and uncertainty.

A business plan can also help to outline the strategy for achieving those goals. By identifying the target market, competition, and unique value proposition of the business, a business plan can help to identify the most effective marketing and sales strategies. It can also help to identify potential risks and challenges, and develop contingency plans for managing those risks.

Finally, a business plan can help to establish timelines and milestones for achieving business goals. This can help to ensure that progress is being made and that the business is on track to achieve its objectives.

Ultimately the business plan is a summary of your business case and reflects strategic and operational thoughts and measures for the product.

Solution: Write a business plan. This will give yourself some food for thought as well. But: Don’t over engineer in this phase. Keep it sleek and simple:

Start with an executive summary: The executive summary should be a brief overview of your business, including its mission, target market, and unique value proposition. This should be no more than 1-2 pages and should provide a high-level summary of the key points in your plan.
Describe your business and industry: This section should provide an in-depth overview of your business, including its legal structure, products or services, target market, and competition. You should also provide an overview of the industry, including trends and potential growth opportunities.
Define your marketing and sales strategy: In this section, you should outline your marketing and sales strategy, including how you plan to reach your target market and convert them into customers. This should include a description of your pricing strategy, promotional activities, and sales channels.
Develop a financial plan: The financial plan should include a projected income statement, balance sheet, and cash flow statement. You should also include information on startup costs, funding sources, and revenue projections. This section should provide a clear picture of your financial situation, both now and in the future.
Outline your management and organizational structure: This section should describe the key players in your organization, including their roles and responsibilities. You should also provide an overview of your organizational structure, including how decisions will be made and how responsibilities will be delegated. Of course, if you are starting alone as an Indie Hacker, this one can be left out.

There are many tools available to help you write a business plan more efficiently. Here are a few examples:

LivePlan: LivePlan is a web-based tool that provides step-by-step guidance for creating a business plan. It includes templates, financial forecasting tools, and collaboration features to help you create a professional, comprehensive plan.
Bplans: Bplans is a website that provides free sample business plans, as well as a range of articles and resources on how to create a business plan. They also offer a business plan builder tool that can help guide you through the process.
SCORE: SCORE is a nonprofit organization that provides free mentoring and resources to small business owners. They offer a business plan template and a range of online courses and webinars on how to create a business plan.

These are just a few examples of the many tools available to help you create a business plan. Ultimately, the key is to find a tool that works for you and your business, and to invest the time and effort to create a solid, comprehensive plan that will guide your startup to success. This is not bound to toolset and can also be done in Word or Notion or any other writing tool.

4. Relying too much on funding 🤑

This one is coming from the media a lot. If you follow VCs at Twitter or are a frequent reader of TechCrunch, you might be affected by this.

Many founders believe that raising money is the key to success, because for the average person it sounds like it’s a success, if somebody raises $50 million dollars in a Series A round.

In fact, funding comes with risk and just putting in money means nothing to your product - unless done right. In reality, funding is just one part of the equation. Funding doesn’t have an end in itself and whatever money you get from external investors should be bound to an upfront planned objective. Overreliance on funding can lead to overspending and a lack of focus on creating a profitable business. Some facts are:

Funding doesn't validate a product or an idea: Just because you are able to secure funding from external investors, it doesn't necessarily mean that your product or idea is validated. Investors may be attracted to your team, your market, or your potential, but that doesn't mean that customers will be willing to pay for your product. If you rely too heavily on external funding, you may miss out on opportunities to test your product and get customer feedback.
Distraction from product and business case development: When you are focused on raising money, it can be easy to get distracted from the more important work of developing your product and business case. This can lead to delays in product development and missed opportunities to establish a strong product-market fit. It can also lead to missed opportunities to build out your team, develop your marketing strategy, and establish key partnerships.
Loss of control: When you rely on external funding, you may be giving up a significant portion of your equity in the company. This can lead to a loss of control over your business and decisions, which can be problematic if you have a strong vision for your company that doesn't align with your investors' goals.
Pressure to perform: When you take on funding, you are under pressure to perform and show a return on investment for your investors. This can be stressful and can create unrealistic expectations that can be difficult to meet. It can also lead to a focus on short-term gains rather than long-term growth and sustainability.

To mitigate these risks, it's important to focus on developing a strong product and business case before seeking external funding. This can help you establish a strong product-market fit and validate your idea before you invest significant time and resources into raising capital. It's also important to maintain a healthy balance between fundraising and product development, and to resist the urge to prioritize fundraising over more important business-building activities. By focusing on the right things at the right time, you can help set your startup up for long-term success.

Solution: Never try to get external funding, if you don’t need to. This means: If you can fulfill the business plan’s needs without external money, just do it.

5. Trying to do everything alone 🙋‍♂️

For this one the motivations differ: Starting a business is a daunting task, and it can be tempting to try to do everything alone. For others it’s the fear of asking for help or having issues trusting other people with one's business. However, building a team of skilled individuals - and this could be cofounders, employees, partners or any other kind of resource - is crucial to the success of a startup.

Let me name some downsides of doing everything on your own:

Overwork and Burnout: When you try to do everything on your own, you may end up working long hours and neglecting your health and well-being. This can lead to burnout, which can ultimately hurt your productivity and your ability to lead your team effectively.
Lack of Diversity of Skills: No one is good at everything, and when you try to do everything on your own, you may end up neglecting important areas of your business. For example, if you are a product-focused founder, you may struggle with sales or marketing, which can ultimately hurt your ability to grow your business.
Slower Growth: When you are working on your own, you may not have the capacity to take on larger projects or pursue new opportunities. This can lead to slower growth for your business, which can make it harder to attract customers or investors.
Lack of Support and Accountability: Starting a business is a challenging and often lonely experience, and when you try to do everything on your own, you may not have the support and accountability that you need to stay motivated and focused.
Limited Perspective: When you are working on your own, you may have a limited perspective on your business and the market. Working with others can bring fresh ideas and new perspectives that can help you make better decisions and avoid costly mistakes.

Some benefits you get when working with others include:

Access to expertise: When building a new product or startup, you may not have all the skills and expertise you need in-house. Seeking out support from your professional network, service providers, or other external resources can help you tap into specialized knowledge and skills that can be valuable in bringing your product to market.
Access to resources: Building a new product or startup requires access to resources like technology, equipment, and funding. By seeking out support from others, you may be able to gain access to these resources more easily and at a lower cost than if you were to try to acquire them on your own.
Emotional support: Building a new product or startup can be a lonely and stressful process. Having a support system of friends, family, or other entrepreneurs can provide emotional support, help you stay motivated, and give you a sounding board for your ideas and challenges.
Networking opportunities: Building a new product or startup requires building relationships with customers, partners, and investors. By seeking out support from others, you may be able to expand your network and gain access to new opportunities that can help you grow your business.

Solution: Don’t do everything on your own! Ideas on where you can find people to join your mission:

Professional networks: Joining professional organizations or attending industry events can help you meet others who have experience in your field and can provide valuable insights and advice.
Service providers: Working with service providers like lawyers, accountants, or marketing agencies can help you tap into specialized expertise and resources without having to hire full-time employees.
Friends and family: Friends and family members can provide emotional support and may be willing to help with tasks like testing your product, providing feedback, or making introductions.
Mentors and advisors: Seeking out mentors or advisors who have experience in your industry or in building startups can provide valuable guidance and support as you navigate the challenges of building a new product or startup.

Overall, seeking out support can help you build a stronger product or startup, stay motivated, and gain access to the resources and expertise you need to succeed.

6. Not being flexible 🧗‍♂️

This one basically is a summary of all the points above that you always have to keep in mind.

Being too inflexible can be a significant risk for founders and Indie Hackers who build digital products because the path to success is rarely a straight line. If you are too committed to a particular idea or approach, you may miss out on opportunities to pivot, adapt, or refine your product based on new information or changing circumstances.

Here are a few reasons why flexibility and a willingness to pivot are crucial for success:

Finding product-market fit: One of the most critical challenges for any new product or startup is finding product-market fit. If you are too inflexible, you may miss out on valuable feedback from your customers or fail to adapt to changing market conditions, making it harder to find the right fit between your product and the needs of your customers.
Staying relevant: In the fast-paced world of digital products, staying relevant and competitive requires a constant willingness to pivot and adapt to new trends, technologies, and customer needs. If you are too inflexible, you may fall behind your competitors and struggle to keep up with changing market dynamics.
Managing risk: Building a new product or startup is inherently risky, and being too inflexible can increase the likelihood of failure. By remaining open to new ideas, feedback, and opportunities to pivot, you can manage risk more effectively and increase your chances of success.

So, what does it mean to be flexible and willing to pivot? Essentially, it means being open to new ideas, willing to experiment, and responsive to feedback from customers, partners, and other stakeholders. It also means being willing to challenge your assumptions and re-evaluate your strategies as needed, rather than being inflexibly committed to a particular vision or approach.

Ultimately, being too inflexible can be a significant risk for founders and people who build digital products, and a willingness to pivot and adapt is crucial for success in a rapidly changing market. By remaining open to new ideas, staying nimble, and responding to feedback, you can increase your chances of building a successful and sustainable product or startup.

Please don’t get this point wrong!

Being flexible doesn’t mean you have to follow every new trend and you have to constantly look out for new opportunities to adapt to, but it means you must have the flexibility to adapt when you realize you have to.

Solution: Stay flexible and adaptable. It is important when building a product or startup, but it's also essential to avoid getting distracted by every change or movement in the surrounding environment. Here are some possible solutions to help you stay flexible without losing focus:

Set clear goals and priorities: To stay focused while also remaining flexible, it's important to set clear goals and priorities for your product or startup. This will help you to stay on track and avoid getting sidetracked by every new opportunity or distraction that comes your way. This is also what the business plan reflects.
Establish a decision-making framework: To ensure that you're making informed and deliberate decisions, consider establishing a decision-making framework that helps you evaluate new opportunities or ideas in the context of your overall goals and priorities. This could include criteria such as market size, customer needs, or technical feasibility. Examples for these are SWOT analysis, the Lean Startup Methodology, Cost-Benefit Analyses, PEST analysis (PEST = Political, Economic, Social, and Technological), Decision Matrices, Porter's Five Forces).
Conduct regular reviews: To stay on track and adapt to changing circumstances, it's important to conduct regular reviews of your progress and goals. This can help you identify areas where you may need to pivot or adjust your strategy, while also helping you stay focused on your overall objectives.
Develop a network of trusted advisors: Building a network of trusted advisors can be a valuable resource for staying flexible while also staying focused. These advisors can offer guidance and support, while also helping you stay accountable to your goals and priorities.
Be open to feedback: Finally, it's important to remain open to feedback from customers, partners, and other stakeholders. By listening to feedback and being willing to adapt based on what you hear, you can stay flexible and responsive to changing needs, while also staying focused on your overall goals.

Overall, staying flexible and adaptable is important when building a product or startup, but it's also essential to stay focused on your goals and priorities. By setting clear goals, establishing a decision-making framework, conducting regular reviews, building a network of trusted advisors, and remaining open to feedback, you can strike the right balance between flexibility and focus, and increase your chances of success.

Now it’s your turn

I hope this list is helpful! Remember, starting a business is a learning process, and making mistakes is inevitable. The key is to learn from your mistakes and use that knowledge to grow and improve your business.

Now it’s your turn to tell me: Are there facts from this article that you want to have more insights to?