building a startup

10 Fatal Commandments Of Building A Startup

Before we begin… Did you check out last weeks article on the Internet Of Things?

Let’s get straight into it.

There’s always a lot of conjecture about what a startup actually is.

To put things into perspective, let’s take a look at the following hypothetical scenario.

I have a friend. His name’s Bob and he’s just started his very own maintenance business.

Is Bob’s business considered a startup? I wouldn’t think so.

Eric Ries, author of ‘The Lean Startup‘ defines a startup as:

A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.

An extension, that I like to add to this definition is growth.

The aim of a startup is to grow, grow, grow and… did I say grow?

If we apply this definition to Bob’s maintenance business, let’s see what we get…

Is Bob’s product or service a new innovation? I wouldn’t say so. People have been conducting maintenance for 1000’s of years already.

Is Bob’s business operating under conditions of extreme uncertainty? No. There’s already a need and want for maintenance…

Bob should be able to find work easily if he looks in the right places.

Building A Startup

We were a startup once. Just like you.

Some might even still consider us a startup, depending on their own definition of the word.

For the past few years, we’ve made some good decisions and we’ve made some bad decisions.

How did we survive the startup phase?

We learnt, very quickly what would be fatal for our company and what would help us grow.

Here’s the lessons we learnt along the way – the 10 fatal commandments of building a startup:

1. Thou Shall Not Build A Unicorn

building a startupSource: TechCrunch

What? You must think I’ve gone completely mad…

“You can’t build a unicorn, they don’t even exist in real life”

I know you just said that or something along those lines…

Startups are real life… They aren’t a fantasy!

As such, no comparisons should be made between beautiful fantasy creatures and startups.

A ‘unicorn company’ is the latest buzz word which refers to a $1 billion startup.

Investors are now asking entrepreneurs to explain how their new company will become the new unicorn startup.

The aim and goal of building a unicorn startup could not be more meaningless for entrepreneurs.

It’s purely a vanity metric and therefore, should never be the goal of starting a company.

The goal of your app startup should be to have a point of differentiation. You need to find an innovative solution to the problem your target users are having.

Do you think Mark Zuckerberg aimed to create a billion dollar company? No, he had an awesome idea that helped people connect and communicate in a unique way.

His aim was to build a long lasting company that would have an impact over the long term.

Facebook’s wealth creation was a side effect of their hard work and determination.

This point leads to our second fatal commandment.

2. Thou Shall Not Focus On Revenue First

building a startupSource: Our Crowd

Surprisingly, the majority of mobile app startups focus primarily on generating revenue.

This mentally is very surprising, considering the reason you went into business in the first place was to develop and promote an amazing mobile app…

If that’s the case, shouldn’t you spend more time focusing on developing the product, ensuring it meets the needs of its users?

Making an app and something people actually want is a lot harder than making money from it.

The startups that win and make money are the ones that focus on growth first and revenue later.

Let’s take a look at Google. They made search work first, then worried about how to make money from it later.

Making money came easy in the end, given that they hold 84% market share.

Instagram and Waze also focused on their users first. Both companies were then acquired by Facebook and Google respectively.

It’s irresponsible not to think about monetisation. It’s even more irresponsible not to think about the product.

3. Thou Shall Not Lack The Ability To Pivot

building a startup

Source: Tech

Would LeBron James be the player he is today if he was unable to pivot and change direction…?

I wouldn’t think so… This isn’t Netball…

You’re not just stuck in the one place! You need to be constantly moving forward or pivoting in either direction to continue moving forward.

Every startup at some stage faces the challenge deciding when to pivot and when to persevere.

You need ask yourself the question…

“Are we making sufficient progress towards to the believe that our original idea and strategy is correct, or do we need to make a major change?”

Let’s use Nokia as an example.

At one point in time, Nokia was actually a paper mill and also made rubber boots… Today, they’re a telecommunications company.

You could also make the argument that it’s time for Nokia to ‘pivot’ again… Time will tell.

There’s no bigger destroyer of creative potential than a misguided attempt to persevere.

Startups that are unable to pivot in a new direction on the basis of feedback from their marketplace can get stuck in the land of the living dead…

They neither grow or die.

This consumes valuable resources and commitment from their employees and other stakeholders but doesn’t enable you to move ahead.

To become a successful startup co-founder, keep a backup plan for every worse-case scenario.

You need to be flexible, pivoting if the original proposal isn’t going to work.

4. Thou Shall Not Be A Lone Warrior

building a startupSource: TopMBA

How many startups have been a success with only one founder…?

With the exception of Oracle, not many, that’s for sure.

Even geniuses like Mark Zuckerberg needed the help of others to make Facebook a success.

Along with the highs and lows that accompany at startup, there’s few tasks that can be undertaken alone.

After experiencing a setback, it’s often difficult to keep going without another persons encouragement.

In most cases, it’s extremely daunting tackling all this alone.

But what defines a real co-founder? In my mind there are 5 universal criteria:

  • You genuinely feel that the person is irreplaceable and is a requirement for success.
  • You both believe that building a startup is the best thing you can do with your lives now and into the future.
  • When defining success, you both have the same definitions.
  • You’re both keen to put the startup ahead of your personal life and other priorities until success is achieved.
  • You genuinely like each other as people.

If you do decide to go it alone, it would be useful to rent space at a co-working facility.

90% of people working in a co-working space said they felt more confident whilst working.

62% felt it increased their standard of work and 70% said they actually felt healthier.

Even if you don’t feel like it will increase your standard of work, who doesn’t want to at least feel healthier?

Some benefits of working in a co-working space include:

  • Collaboration – They’re a hub of creativity. Individual workers can draw and gain for each others experience and ideas.
  • Community – Even though you’re going it along, it still feels like your part of a exciting company culture.
  • Develop Ideas – Co-working spaces are a great place to inspire and develop ideas from professionals in your own field or in related industries.

5. Thou Shall Not Hire The Wrong People

building a startupSource: Recruitment

When building a startup, the last thing you want is to hire the wrong person.

This drains your startup financially and may even hinder your startups progress and future successes.

I know many startups that have folded due to hiring the wrong people.

There’s many reasons for this. Perhaps you hired a friend who lacked the necessary skills for the role.

Or, you hired someone who didn’t fit in with the team and startup culture because of a personality mismatch.

We all know that person… They appear to amazing in the interview. Next minute, once they start working, you realise they’re totally nuts!

Make sure you’re continually tweaking the hiring process so you’re hiring the best quality people.

Cash flow in the early startup days is always tight. Any leftover funds are usually funneled into growth areas of your business.

This doesn’t leave much for wages. And as a result most startups can’t afford to hire rock star talent…

“To build a great business, you must bring aboard great people.”

The problem is the best people are often attracted to large companies with large salary packages.

Here at Buzinga, our challenge wasn’t how to get more money to pay staff

Our challenge was, “how can we create something here, that they can’t get over there?”

That’s when we realised building a positive and inspiring company culture would be our number one growth strategy.

Buzinga has the belief that technology will change the word for the better.

This value’s ingrained in our company DNA.

As a result, we look for this same value when hiring.

A candidates vision and values should always align with those of your startup.

It’s important at Buzinga that every team member contributes to manufacturing happiness in some shape or form.

6. Thou Shall Not Launch At The Wrong Time

building a startupSource: Command Partners

Timing is everything when launching a startup.

Did I mention that timing was everything?

Yes, yes. I know I’m repeating myself by I cannot emphasise this point enough.

Whilst there are some circumstances outside of your control, launching at the right time can be arranged.

Never mind following some exhaustive scientific approach. Just make sure your startup doesn’t launch to early or too late.

Launching your app too soon can put your entire startup at risk.

There’s many questions so consider such as whether your application is really something that your users want or if it’s ready to be marketed to those users.

At the end of the day, there’s nothing worse than rushing the release of your product to beat your competition or even worse… to start making revenue.

Here’s 4 ways to ruin the launch of your app (counterintuitive I know, but you need to know what they are):

  • Ignore your competition.
  • Gather input from developers only.
  • Rush to release the app to market
  • Rely on your first customers for QA testing and debugging.

On the flip side…

“If you’re not embarrassed by your first product then you’ve launched too late”

It’s a fine line isn’t it?

Don’t wait to long. Otherwise your competitors will be first to market with their product or you will use up all your finances before even launching.

Make sure that everything is good to go but don’t procrastinate on it.

It’s helpful to establish deadlines for releasing your minimum viable product to the market.

This will keep you and everyone on your team stay motivated and working at a steady place to release your app.

 7. Thou Shall Not Startup Without A Plan

building a startupSource: Business Wealth

The importance of your business plan should never be under estimated.

Going into business without a plan is the same as crossing the road with your eyes closed. Extremely dangerous…

When building your startup, the business plan is your foundational pillar upon which everything will be built.

Your business plan will be your startups road plan. At least for the first couple of years.

It will also serve as a ‘first look’ for potential partners and investors.

Finding the right answers to the right questions is critical if you want to lay a stable foundation to business and attract interest from investors.

The 6 critical answers that your business plan must answer are:

  • What problem is your startup solving?
  • What’s your point of differentiation/your unique selling proposition?
  • Who’s your target user?
  • How will you generate revenue?
  • How will you market your business?
  • What do you need to get started?

Answering this questions isn’t just a one time process.

Your business plan should be ever evolving, changing along with your startup.

For your startup to survive, you’re going to have to continually revise your answers to these questions and update your business plan accordingly.

8. Thou Shall Not Mishandle Finances

building a startupSource: Cloudinary

One of the biggest problems when building a startup is raising funding and capital.

Having money to spend is a big deal for a startup and as such, it needs to be handled properly.

The biggest mistake startups normally make is hiring people too quickly.

You’ve suddenly gained all this money and you’re eager to expand through hiring extra staff. As an entrepreneur, you may believe that all the new employees are needed.

This means though, you will burn through your startups finances quicker than pouring gasoline on a fire…

Only hire those who are truly needed. Always reassess your new hires to ensure maximum ROI is being achieved.

What if your business has to make a very costly change? Do you have sufficient funds in reserve to cater for this?

Pivoting is vital for a startup. The problem is, pivoting can cost major money.

What happens if the original plan must be scratched in favor of a backup plan? What if an investor backs out or a client doesn’t pay?

What if a vital element for the business costs too much? Is there money to handle such scenarios?

So many questions… But these are all very realistic scenarios that you must have the finances for, should they occur.

Without proper management and use of its finances, your new startup will fail to grow.

Be sure that someone good with numbers can help you out with this.

9. Thou Shall Not Think Too Small

building a startupSource: The Drum

It’s possible for an entrepreneur to think too outside the box.

What does this mean?

If the market your targeting is too small or ‘niche’ then your success may be elusive.

Many startups belief that it’s ‘safer’ to target smaller markets to avoid competition.

“You can only avoid competition by avoiding good ideas”

If you make anything great, then you’re going to have competitors, so you may as well face them sooner or later.

You should’ve already done your research into your market and know who your competitors are.

When building your mobile application, it should be taken into account what your competitors are doing. What they’re doing well and not so well.

This should be factored in when building your application so once you’re ready to launch your app, it should already be a step ahead of your competitors.

10. Thou Shall Not Ignore Hunches

building a startupSource: Inc

Entrepreneurs are a savvy bunch. And as such, you should always trust your instincts.

It’s probably the reason many get far with their startups.

So don’t ignore that hunch. Use it to your advantage.

Be smart about it though.

Make sure this ‘hunch’ is thoroughly’ investigated by crunching the numbers and conducting the appropriate research as opposed to just blindly acting upon it.


Building a startup is not an easy task. By avoiding the 10 fatal commandments, it will give you every possible chance of succeeding.

You’ll make some great and not so great decisions along the way.

If you can make more good decisions than bad and apply these lessons, you’ll be well on your way to building a very successful startup

Once you’re on your way there’s always more room to grow, grow, grow.

Do you have any lessons learnt from your own startups? Please let me know by commenting below.

Where to go next

5 Steps To Becoming A Key Person Of Influence In Your Startup Niche

10 Fatal Commandments Of Building A Startup

The 2 Forgotten Secrets To Startup Success

5 Lessons Every Startup Entrepreneur Must Learn

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Logan Merrick is the co-founder and Director of Buzinga, as well as one of Australia's most recognised entrepreneurs, keynote speakers, investors and mentors. His writing on startups, technology and mobile marketing has been featured in The Australian, Business Insider, Startup Smart, Smart Company, and more.
  • Sushrut Padhye

    Once again, some really actionable advise and excellent use of images.