I spoke with Michael Baynes, Co-founder and lead investor at Clarify Capital. Unlike a traditional venture capitalist, who focus on fly-by-night tech startups, Michael has been funding the “masses of small businesses”. The trucking companies, the contractors, the medical offices — you know, the ones that make up the bulk of the 30.2 million businesses in the United States.
Michael, and his partner Bryan Gerson, had just conducted a large-scale study with 500 companies in their portfolio. It turns out they regularly conduct research studies which they can leverage to help the businesses they fund. In this case, they asked the business owners a simple question:
What was the biggest mistake you made running your company and how can other entrepreneurs avoid doing the same?
Before we get into the infographic, here is the quick rundown:
- Not understanding your customers fully and lack of empathy for their needs.
- Thinking success will come overnight (spoiler: on average it takes 2-3 years to reach a point that the owner might view as a “successful” business).
- Not doing small tests with your marketing budget before trying to scale campaigns.
- Not scaling the team properly once there is revenue momentum.
- Hiring the wrong team (this one should be #1 in my humble opinion)
- Not having a website (do note that most of these businesses are not tech startups)
- Not having enough cash flow to grow (this is the problem that Clarify Capital solves for business owners)
- Charging too little for your product or service (new SaaS startups are often guilty of this as well)
#6 above made me wonder about the market opportunity here. The things we take for granted in our space, having a website, is still a challenge for these local businesses. While “point and click website builders” like SquareSpace and Weebly have made the process easier, they’ve clearly only scratched the surface of their potential. Especially if 47% of small businesses still don’t have a website in 2018. In a future post, I plan to dig up research on the market size and opportunity in that space.
The infographic below is based on Clarify Capital’s study. It details the top 8 mistakes owners made with actionable advice on how to fix them:
Now It’s Your Turn
What is the biggest mistake you’ve made in the past with your organization? Send in your responses on Twitter and Instagram.