By nature, entrepreneurs are intelligent, passionate and ambitious people. But all that intelligence and drive doesn’t always mean that every business owner makes all the right decisions all the time. Hopefully the mistakes that are made are not big enough to cause the business to fail.
We caught up with tech billionaire and Dallas Mavericks owner Mark Cuban to find out the things entrepreneurs do that drive him crazy. As a longtime investor on ABC’s hit TV show Shark Tank, along with Daymond John, Robert Herjavec and Lori Greiner, Cuban has encountered his fair share of entrepreneurs who have made some mistakes serious
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Whether you’re looking for investment money or quietly growing your business, Cuban says to avoid making the following mistakes at all costs.
Not understanding the basics of business.
One thing that drives billionaire Mark Cuban crazy is when entrepreneurs don’t have the basics down. A good example, he says, is when entrepreneurs “don’t know the difference between a product and a feature.” Before an entrepreneur starts looking for investment money, starts producing a product, even before research and development, he must have this fundamental understanding.
In other words, if a competitor only sells blue shirts and your shirts are blue and red, you’ve just created a feature. Products or services solve problems and people want to buy them. Features are features that add value to products.
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Successful companies are built on products, not features, Cuban says.
Thinking that competition equals validation.
Creating something from nothing is not an easy task. Convincing people that you are providing a valuable service and that they are buying your products sometimes takes a lot more. The Indiana University alum says it’s a big mistake to think that a big competitor moving into your market validates your business.
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What it does, or should do, is make smart entrepreneurs extremely anxious. “It means you’re in deep trouble unless you can innovate and outsell them,” Cuban says.
Pinning your success on a “star” employee.
As the old saying goes: Don’t put all your eggs in one basket. The same goes for recruiting and team building.
Too often, employers believe that “their next hire is going to solve their biggest problem,” says Cuban. Hiring the best salesperson in the industry doesn’t mean you’ll magically figure out how to sell your stuff and everyone will live happily ever after, he says.
If your star employee leaves or fails, so will everyone else. Growing a successful business requires all hands on deck, which means everyone on the team must pull their weight together.