7 Deadly Startup Mistakes

By John Foley

Sun Microsystems drew some 300 entrepreneurs to a startup “camp” in New York. The event was full of advice on things emerging companies can do raise their chances of success — and a reminder of flubs to avoid.

Sun hosted the get-together as part of its outreach to early-stage companies. Sun launched its Startup Essentials program in the United States a year ago and has engaged some 1,000 companies since then. Sun extended the program a few months ago to India and China and plans to offer it in other parts of the world, according to Sanjay Sharma, Sun’s director of startups and emerging markets market development. Sun helps startups with free software, services, discounted hardware, and hosting in hopes the small fries will turn into larger customers down the road.

A lot of good advice was presented. Saeed Amidi, president of Plug And Play Tech Center in Sunnyvale, Calif., talked about the benefits an incubator can offer. Since opening its 175,000 square foot facility last year, Plug And Play has become home to 112 startups backed by a total of $350 million inventure funding. Companies there have ready access to venture firms, data center hosting, tech vendors, and fellow innovators.

Other presenters included Jason Hoffman, founder and CTO of Joyent, who gave a primer on how to architect Web applications for scalability; Alan Sutin, an IP lawyer with Greenberg Traurig, who talked about patents and trademarks; and Jed Katz, managing director of DFJ Gotham Ventures, who went over the dos and don’ts of working with VCs.

The venue also served to demonstrate what to avoid if you’re an up-and-coming company. The following list is drawn from my observations at the day-long affair. Here’s what not to do if you’re a startup. Don’t…

1. Bungle the napkin pitch. Several of the startups I met were anything but concise in getting their ideas across. That’s a missed opportunity. Entrepreneurs must be able to articulate big ideas in a few seconds.

2. Dress like a scarecrow. Old shirts, baseball caps, and sandals are great for the weekend, but they don’t make a great first impression at a business event.

3. Spill the IP beans. Attorney Alan Sutin warns that you have only a year to file for a patent after your idea has been publicly disclosed. Once you start blabbing, the clock starts ticking.

4. Go it alone. Veteran investor Amidi of Plug And Play Tech Center says entrepreneurs need to find one or two partners who share their passion for the business. If you can’t convince one or two others this is a great idea, it probably isn’t.

5. Set up shop in Timbuktu. You’re much better off in Silicon Valley or some other center of entrepreneurship and funding. “If you move to the Bay Area, your chances of success double,” says Amidi.

6. Call your investors dopes. One speaker said his startup got its initial funding from “friends, family, and fools.” He was kidding — I think.

7. Snooze during brainstorming. The guy next to me began snoring more than once during presentations. There are diminishing returns to those late nights working out a business plan.

I can’t guarantee your startup will be successful if you avoid these gaffes. But it’s good bet it won’t be if you don’t.



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