Unfortunately this article is extracted from my personal experience, and I can tell that I could hardly have done things worse, so do not hesitate to do the exact contrary if you are creating your company!
1) Choose the worst timing
For example, useless to say that if you are in 1st year of a master in management, president of two associations and treasurer of another one, and if in addition you work part time in a consultancy, it is definitely not the right moment for you to create a company, even if you think that your idea is amazing… Because all your partners will have strong doubts about your ability to keep a company on track while doing so many things, and will immediately think that you are trying to minimize the risk: it is exactly not what an entrepreneur should show.
Besides, having no single penny to invest (precisely because you are still a student) and believing that business angels will see the potential of your idea right away is also a wishful thinking…
Having absolutely no money (I was investing my part time wage in my company!) leads you to make all the tasks half way, without being able to show all the potential of your idea. Of course you do not need to have a lot to start a company, but more is definitely better than less especially if you have no network to help you concerning the basic starting costs.
2) Keep your amazing idea really secret
One day I wanted to take advice from Frederic Iselin, manager of HEC-startup, and I started my speech by “I expect you not to repeat my idea”, and I remember the kind of look he gave me. At the time I thought that he did not understand the huuuuge potential of my idea, implying that a lot of people would want to steal it. If only it could have been that! If you read this, please forgive me Mr Iselin!
I have understood that if the simple fact of letting people know your idea could endanger your project, you should definitely reconsider it.
First, because if the concept is so easily reproducible, you will not be able to protect it forever (unless you do not communicate on it and therefore do not have any clients!). Loic Le Meur explains in a famous article that the value of a project is in the execution and not in the idea, and he is perfectly right. Despite the big failure of my company creation, I keep thinking that the idea was interesting, but the execution was…crap.
Then, because you cannot start a project without challenging its viability with more experimented people. However, I totally agree with this article of Guy Kawasaki: confronting your project to different point of views must help you improve it but not drop it; we expect entrepreneurs to have convictions! And the ones who criticize the most your idea are never the ones who make things better than you but just people who do…nothing at all.
3) Believe that having a concept that fill a need will be sufficient to have customers
First: how to make people know that you are here to fulfill their need?
People often acknowledge having a need if other people acknowledge having the same: so how to get your first clients without any money to invest in basic advertising, and no time?
Secondly: again, is the execution good enough to make people use your tool rather than keep an unsatisfied need?
My company creation which provided a tool for small businesses or associations to interact through a blogging platform seemed to fulfill the need of small businesses to go out of their isolated situation thanks to easier and convenient tools.
Perfect on paper, but what if the blogging platform does not look corporate at all, precisely because you have no money to invest in design?
4) Enlarge your target with no limits
That is exactly what happens when you start feeling that you are falling behind results. You try to enlarge your target to see if other prospects should be interested by your product, and finally you loose all the consistency of the core concept. That is how I ended up by having “Le Club des boules de Satolas” (in English: the petanque club) as a client on my blogging platform: not such a prestigious reference when selling your product to IT start ups…
5) Hire no accountant or lawyer
Linked to the “no money problem”, you think that you have can do everything by yourself. It is true to a certain extent: if you start delegating all the administrative work because “it is too complicated”, you must think about doing something else.
But there are definitely tasks that you are not entitled to do, even as an entrepreneur. Being you own accountant is so hard that you start thinking that it is better not to make profit just to have less forms to fill (personally, it was not even a question, as I had no profit whether I wanted it or not!).
And if I had hired a lawyer when I have wanted to sell my company, I would have made a juicy operation: indeed, a potential acquirer told me that he was buying my company for 14K for sure (with no clients, no design, and an investment of 1K). I was delighted and I gave him the logins to verify the code of the website. Three days after having copied everything, he told me that he did not want to buy my company anymore. A lawyer told me after that a simple signed preliminary sales agreement would have prevented me for that kind of experience… So think twice when trying to save money!
After reading that, you may think: my god, what a looser! You are not so wrong, but knowing what NOT TO DO is often what makes winners after… Let’s hope so!