Suicide entrepreneurs have good intensions of creating great companies, but when realities of launching a successful start-up hit, these well-intentioned entrepreneurs are often responsible for their own demise. Their good intensions of creating a viable company jeopardize their company.
Sometimes it is difficult to spot a suicide entrepreneur, for the trained observer (read: savvy investor), however, the traits are obvious. Suicide entrepreneurs:
• are so in love with their technology that they cannot get out of the lab to develop the business;
• will not share any technical information about their product for fear of it being stolen;
• do not listen to advice from experts who are trying to help them,
• lack customer validation to show that anyone wants the product;
• create companies that are way too insular; everyone involved is a family member which is a red light for investors; and
• have companies that are not focused on one product, but many which dilutes their ability to bring any one product to market.
Unfortunately, I have way too many stories to tell about the suicide entrepreneur. A classic example involves a married couple that licensed a technology. They were passionate about the technology, however, neither one of them was an engineer nor did they understand their potential customers’ needs. They thought they had the solution – hire an engineer to develop the technology and let the customers come running. An important fact to note is this was the first start-up company for both of them, and being a husband and wife team made it difficult to raise capital.
Their biggest mistake was executing their plan exactly as envisioned. They took the product to an industry show after the designs were complete and prototypes were manufactured. The prototypes received positive feedback from potential customers, but there were no purchases. The technology was too difficult to install. However, customers said if the product could be installed another way they would purchase it. By that point, the company ran out of their seed money, was not able to raise any additional capital and was unable to redesign their device. Had they met customers before designing the device, they could have avoided this costly mistake. Sadly, they were forced to close their doors.
Most entrepreneurs go into business because they believe their product can make a difference.
I am willing to mentor any entrepreneur who wants to make their vision a reality, and work at it. It all goes back to three things: 1) being self-aware, 2) being willing to take risks, and 3) avoiding ALL suicide entrepreneur tendencies in favor of doing what is necessary to make your company a success.