Top 10 mistakes of entrepreneurs (by Guy Kawasaki)

I recently watched a video, featuring Guy Kawasaki delivering tips and suggestions for entrepreneurs.

If you have one hour and half to watch the full video, jump below. Otherwise, here there are my notes about it.

The ten top mistakes that entrepreneurs make (plus one bonus)

1. Multiplying big numbers by 1%: it is a mistake claiming “there is a huge market there, how hard can be take the 1% of it?”. In fact it is harder than expected, while at the same time no investor will put money on something that will obtain only 1% of the market
2. Scaling too soon: when you expect to sell a huge amount of goods in the first month (see #1), you will invest in production facilities, in human resources, etc most of the money you obtained via the fundraising. Then you discover that #1 was wrong and you have an incredible amount of sunk cost to take care of.
3. Being obsessed in partnering: It is bullshit, being a big group will not make you valuable. Only sales figures matters.
4. Pitching instead of prototyping: If your idea is really good, you should create a first prototype. Nowadays is virtually free to access to resources to create a working prototype and to create some buzz around it.
   The cost structure shifted from fixed costs to variable ones:
   1. The infrastructure scale on demand, with Amazon Webservices, Microsoft Azure or Rackspace
   2. The marketing tools are free (compared to other media): Facebook, Twitter, Pinterest, Google, your blog
   3. Teams can be organized all around the world, you can create virtual teams, virtually match competencies and so on. (Read how Buffer works as a distribute team)
   4. Open sources systems enable every team to have the last technologies for free
5. In a pitch, too many slides, too small fonts: follow the gold rule 10-20-30: 10 slides, 20 minutes presentation, font 30pt or larger.
6. Doing things serially: launching a company is not a serial process but a parallel one. That means that fundraising, software development, shipping, collecting money, customer supports, etc. needs to be done in parallel.
7. Believing 51% means control: when you will start taking money out from the company you’ll lose control.
8. Believing patents means defensibility: it is not true, it work only in some fields like biotech, pharmaceutical.
9. Hiring people like you: you need to balance skills and reduce weaknesses. You need to seek for complementary skills in the hiring process.
10. Believe your VC is your friend: They are in the business of making money, they are not going to be your friends. Angels investors maybe, venture capital no.
11. Don’t assume that VC can add value: You will get access to money and a couple of hours per month, maybe some contacts but no more.

Interesting, right? If you want you can look at the full video below: