Top Ten Mistakes Startups Make Building Technology

Have been thinking about startups and technology, for the obvious reason that Amazon Web Services seem to serve Startup needs so well. That led to some discussion, followed by more thinking, and finally an inevitable “top ten” list.

But rather than just saying “these are the top ten mistakes that Startups need to avoid”, it seems like the perfect opportunity to ask all of you what YOU think the top pitfalls are. Feel free to share your actual experiences, or those of your "friend." What do you think? Love to hear your comments. Just asking that you restrict your list to technical reasons: we’ll save the business reasons for another list.

There’s a zillion ingredients in startup success. The purpose of this list is to identify ten technical pitfalls to avoid in a Web startup.

1. Failure to anticipate success, and failure to architect for it. (You can’t anticipate all the bottlenecks in advance, or at least you can’t afford to out-engineer them.)
2. Failure to plan for failure (a.k.a. over-investment in hardware leads to inability to exit one idea and move on the next one.)
3. Bad Location (Internet Alley instead of Internet Highway means that your bottleneck is bandwidth, latency, and second-tier operational environments).
4. Technology Religion: (The louder someone’s opinion on a particular technology, the smaller the chance that their opinion is well reasoned.)
5. Late adoption (Contrary to the "bleeding edge" cliche, early adopters are able to use technology as a differentiator that accelerates them out in front of the competition.)
6. Failure to use technology as a strategic weapon. (Viewing technology as overhead or strictly as an operational expense is the fastest road to making decisions for the wrong reason.)
7. Failure to plan results in an urgent care center rather than an online business. (You can’t just throw stuff together and expect success.)
8. Selecting the wrong bank, and the wrong payment gateway. (There are many anecdotes about gateway horror stories)
9. Staying in the closet too long. (Startups are about success, and they thrive on new business. It’s better to iterate on what works rather than hide behind a beta, because success never finds your plan, it just finds you.)
10. Adding audio to your home page. (Doh!)

-- Mike

Comments

[John]

Um, I think you need to enumerate some of this stuff. Like which payment gateways suck . . .

[UrgentCareDoc]

Fascinating! Having worked as an owner in both an urgent care center (definitely does not result from a failed tech startup) and in a technology startup (www.practicevelocity.com)
1. "Failure to plan for success." Actually, our company was blindsided by success. Success just hit us out of the blue. But most startups lack one thing--cash. Without cash they can not deliver on the best possible plans. Success gives you that one thing that you need. So planning for success is not near as important as working your tail off and making sure that success happens.
2. "Failure to plan for failure." Agree that if you overspend up front you will fail. But to some degree every startup makes mistakes and spends money on things that fail. The key is to realize that something is not working before you go to far down the wrong path.
4. "Technology Religion:" Agree. Success rarely comes from doing what following the crowd. If everyone thinks something is a great idea, then someone else will be better funded or will execute better. Success comes to the contrarian not the
9. "Staying the closet too long." Absolutely! Get the product into production. Nothing forces strategic development more than the need to serve customers now.

[Colin Percival]

I'd add another point to this:
10.1. Adding Flash to your home page. The only thing which drives me away from a website faster than audio is having to watch a 10 second animation before I can do anything.

[pwb]

Disagree with #1. Scaling is much, much easier than finding paying customers. Over-engineering at the beginning is actually a recipe for failure.

[Bryan Johnson]

Mike,

Great post. I couldn't agree with you more on #8 in choosing the wrong payment gateway (I would add merchant service provider as well). I have my own payment gateway application (braintreefinancial.com) that took years to develop and run into merchants everyday that are struggling because they chose the wrong provider. It can get a company in trouble quickly.

Regarding #10 & 10.1, I ended up putting a video of myself on my home page, but not before going back and forth forever.

I too really dislike flash websites that will not let you get to the content that you want immediately. However, having said that, I am in the payment processing industry (credit cards, checks, etc.) and most people just go to my site to check the legitimacy of the company, not necessarily for content.

The reason why I included a video on my site was because my industry is fraught with shady people and companies and I needed to make a personal connection with prospective customers who are located all around the country. It's difficult to establish trust with someone over the phone, and especially in an industry that requires sharing sensitive personal information.

Thoughts?

[Mike]

Bryan -

Great points!

For a true bank nightmare (more than a gateway horror story), look at http://www.yarnharlot.ca/blog/archives/2007/01/11/freakin_muggles.html. Should be sufficient to keep most any small business awake at night.

My point about #10 (audio) was meant for sites that launch audio upon loading. If you have a video on your home page, but don't start it automatically then there should be no issues.

And to the other comment about Flash on your homepage; couldn't agree more when the home page is mostly 100% Flash. And have you ever noticed that those sites turn out to be content free (after you load the multi-megabyte annoyance)?

-- Mike

[Andy B]

I agree with John's comment. Question #8 is really begging for more details - which gateways and banks should be avoided? I'm in the process of setting up a web based application with a monthly subscription. I've found payment gateways to be the most opaque part of the process.

To be specific - right now I'm leaning towards Paypal Merchant Services, but I have the nagging feeling that there is a better vendor hiding out there. Any good or bad experiences with Paypal Merchant Services? Any recommendations on other vendors to consider? I'm looking for a gateway and a merchant account.