1st October, 2018

The 10 mistakes entrepreneurs make – Guy Kawasaki

Over the span of his career as an evangelist with Apple, Google and now Canva, Guy Kawasaki has seen entrepreneurs make these mistakes over and over again – and he wants you to avoid them.

Guy Kawasaki presented the below advice to a large audience of startups and entrepreneurs at PauseFest last year.

In the lead up to the inaugural Startup Grind APAC Conference, at which Kawasaki will also be speaking, we thought now would be the perfect time to share his invaluable thoughts again.

1. They focus on the pitch

“The purpose of the company is not to create a great pitch. The focus of the company is to get a prototype up,” he told an audience at PauseFest last year.

“I would much rather see a prototype than a PowerPoint.

“Powerpoints are easy. If you were to allocate your attention and effort, it should be 95 percent prototype and five percent pitch.”

2. They multiply a huge number by one percent

To make an addressable market ‘sexy’, entrepreneurs will often multiply a huge number (for example, China’s population) by one percent and say ‘if we can get just one percent of that market…’

Kawasaki sees right through the trickery.

“It’s not that easy to get one percent of anything, and the flip side of that … is that it’s not only not easy to get one percent, you also don’t want to invest in a company that only wants one percent,” he said.

“I guarantee when you [do that], your projections are going to be off by two or three orders of magnitude.”

3. They scale too fast

Kawasaki said startups often get ahead of themselves and try to build infrastructure for scale which never ends up happening. Instead, he said, entrepreneurs would be well advised to take baby steps – although he put it another way.

“Eat what you kill, which means that you don’t plan this grand banquet and dinner in advance of you killing something to eat,” he said.

“I’ve never seen a company die because they could not scale fast enough.

“I’ve seen many companies die because they scale in advance and it just never happens – so they were burning through cash before they finished their software.”

4. They form ‘partnerships’

Entrepreneurs will often focus on building partnerships to attract early buzz. Again, this is something savvy investors see through.

“I think ‘partnerships’ is a bullshit term, and you use this bullshit term because you can’t use the real terms … which is sales or revenue,” said Kawasaki.

Instead, he advised startups to focus on building sales or revenue – so they can brag about that instead of a partnership.

5. They focus on ‘domination’

Kawasaki said entrepreneurs had a tendency to say ‘we’re going to dominate the market’ – which he said is off-base.

After all, Mark Zuckerberg and Bill Gates didn’t focus on ‘dominating the market’ when building their companies – they ended up doing so after years of work.

Instead, he said startups should focus on niches.

6. They use too many slides

As someone who has sat through thousands and thousands of slides, Kawasaki said he has slide fatigue.

Sick of seeing reams of text on a massive slide pack, he’d instead prefer people that stuck to the 10-20-30 rule: 10 slides presented in 20 minutes, with 30-point fonts.

“If you simply did this in your presentation, it would be better than 95 percent of the people in the world,” said Kawasaki.

READ MORE: How to avoid death by PowerPoint

6. They proceed serially

He also noted that too many entrepreneurs were comfortable doing one thing after another and assumed a company’s progression was a straight line – which isn’t true.

“If you accept the entrepreneur lifestyle, you accept that you need to proceed in parallel,” said Kawasaki.

“You need to push about 10 carts down the road at once. If you can’t wrap your mind around this, you’re going to have a very difficult time being an entrepreneur.”

8. They want to maintain control

The dream of maintaining 51 percent and ultimate control of your company is a fantasy, according to Kawasaki.

“It’s delusional,” he said. “The moment that you take outside money, you’re working for the man, and this is the outside man.”

Instead, he said entrepreneurs should focus on growing the pie instead of the share of the pie they have.

“I’ve never seen a board meeting where a decision came out 51 to 49 – it’s almost always unanimous,” he said.

“What you should focus on is making a bigger pie. It’s way better to own 0.5 percent of Google than it is to own 51 percent of a little crappy company that goes broke.”

9. They believe patents make them defensible

Kawasaki said a common mistake was to assume IP meant your company was defensible – when it’s really a company’s size which dictated the defensibility of the company.

“Quite frankly, you probably don’t have the time or money to defend the patents if it comes down to defending your company,” he said.

“If some large company copies you, you’re not going to have time or the money to win that trial.

“Success breeds defensibility. I’d rather be Facebook with no patents than a little company with a bunch of IP that has no market share. The best way to make yourself defensible is to succeed.”

READ MORE: When do you need a patent?

10. They try to befriend their investors

Finally, Kawasaki said that for some bizarre reason, entrepreneurs thought people investing their their company were now their friends and had their back on a personal level.

“If you ever have that feeling, once more you’re in a delusion,” he said.

“You are a means to an end for an investor. An investor wants to give you a dollar and get back 20. That’s what you represent.

“I’m not saying you should hate your investor or despise them, but it’s not about friendship.”

Instead, he advised the best way you could form a close relationship with your investor is to exceed their expectations.

Bonus: they hire the same as them

Despite the plethora of discussion around diversity in tech, Kawasaki said he still saw entreprenuers who fell into the trap of hiring people just like them.

“I think that leads to weakness. We need different genders, enthicity, sexual orientation, races, creeds, colours…you name it,” he said.

“Instead, hire to complement.

“If you’re good at engineering, hire someone who can sell. If you’re good for selling, hire someone who can make the product.”


If you want to hear more from Guy Kawasaki, make sure you get your tickets to Startup Grind, proudly sponsored by MYOB.