Rookie errors and how to avoid them

With Appster co-founder & co-CEO, Mark McDonald

icecreamPhotographer: Eldad Carin via Stocksy


Everyone makes mistakes. In many cases, it’s the mistakes we fail to avoid that allow us to succeed. At the end of the day, the only person who never makes mistakes is someone who never does anything.

In a start-up, a lot of the situations entrepreneurs go through are brand new because if you come up with an innovative product or enter a new market, there are often no benchmarks to match against.

However, there are common mistakes start-ups make, which are completely avoidable.



This is a classic first-time entrepreneur mistake mostly for the fear of someone stealing your idea. You see first-time entrepreneurs walk around with non-disclosure agreements and sometimes, they go as far as filing a patent for something completely trivial. But consider this: Instagram, Twitter, PayPal, Shopify, Yelp, Groupon and even Facebook started as completely different concepts. In the start-up world, ideas are a commodity; everyone has some. So it’s the execution that really matters, even when business school and management gurus can teach otherwise. In 99 per cent of cases I have encountered, the initial idea fails to survive the first contact made with the market. People don’t steal ideas. If they do, it’s when they’re already a proven success. Thus, it’s better to focus on execution and validating the idea early because chances are, it is going to change anyway.

At Appster, we publicly revealed our intensive hiring process, our revenue per month and even what our product lines looked like six months before they launched. We believed it would cause some competitors to copy (and it did), but it also allowed us to attract staff, media attention and build a brand. Nobody ever built a brand by never talking about their idea.



When myco-founder, Josiah, and I first started Appster, we didn’t focus on a particular customer – we served everyone and as they say: “He who tries to please everybody, pleases nobody.” Many entrepreneurs build products for broad appeal only to find out that most people aren’t willing to buy something new. Mainstream customers like established brands and are usually risk-averse.

The key is to focus on a small market of early adopters. Facebook started with a target of Harvard students, Uber in San Francisco, PayPal targeted the eBay community and Instagram targeted foodies.

As soon as we discovered start-ups were our fastest growing market segment, we decided to build a company that would be a leader in this space. It is important to pick a market where you can solve a single problem and make the users love your product. Word of mouth will eventually spread it to the masses and make it mainstream.



That would be the first step to an entrepreneurial nightmare. The reality is, most people aren’t suited to be entrepreneurs and even if they are, they are likely to have conflicting views with their co-founders sooner or later. This is what co-founder agreements and vesting are made for. You want to make sure your responsibilities are clear and if things don’t work out, you have a way out without losing equity to someone who isn’t going to execute. Likewise, you want to be able to resolve deadlock situations and if you are working part-time, to determine at which point you should leave your paid jobs.

For us, Josiah and I knew we wanted to commit to building Appster over multiple decades. So, we agreed that as per the agreement, neither of us could own more than a five per cent stake in another company, which allowed us to align ourselves 100 per cent to the success of Appster.



A sure way to fail is to run out of cash. There’s an extensive history of both start-ups and public corporations that booked a lot of future revenue without realising they were too broke to even get there. The moment you create a start-up, you are burning cash. As a founder, you must have a clear idea of how much runway (time to revenue) you have left, as you may find yourself going broke sooner than you think.


There are other mistakes entrepreneurs make, such as overcomplicating their product or not seeking or using customer feedback, lack of focus or quitting too early. The best advice I can offer in avoiding common start-up blunders is to surround yourself with valuable mentors and advisors, people who are experienced and willing to help you out because of their passion, not necessarily for any monetary gain.

Still, even with valuable mentors, you will make mistakes. And that’s okay as long as you’re quick to adapt and learn from them, so you don’t make them again.

*Catch Mark speaking at Kick.Start.Smart. Brisbane & Melbourne*



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