9 Common Mistakes Tech Startups Make According to Investors at Arabnet

Some of the region’s top investors, during their panel discussion at Arabnet Cairo, shared their experiences of the most common mistakes tech startups make:

  • Not thinking through the practicalities of executing an idea. Giving even a little thought to possible implementation challenges will save a lot of headaches later on.

  • Thinking of the investment process as money only.  Founders need to discover what value possible investors will add to the project, as this is at least as important as a cash injection.

  • Overlooking the chemistry of the team.  How the team, including the investment partners, works together is most important, so make sure visions are shared and everyone involved is a team-player.

  • Having a bad or non-existent employee ownership scheme.  Greedy founders only shoot themselves in the foot if they’re not willing to share possible future wealth, as employee ownership is a fundamental motivation tool.

  • Not having a business plan. Financial plans are always wrong, but that’s no reason not to have them.  Writing a financial plan teaches the founders the key financial concepts they will need to know to make their company successful.

  • Lacking knowledge about revenue and cost streams.  Bad cash flow is the biggest killer of startups, so founders must always be clear where the money is coming in and going out.

  • Having founders who are not well-rounded.  It’s true that founders’ skill-sets should complement each other, but each founder should have a reasonable working knowledge of all of the core facets of running a business.

  • Simply copying an idea that works abroad.  The environments are structurally different, so something that works well abroad may not work well in this target market, and vice versa.

  • Not thinking big enough.  Too often local founders, especially Egyptians, limit their thinking and target market.  If a local startup idea works globally, then it must plan to target a global audience at some stage.

 The VCs were Ziad Mokhtar,a principal at Ideavelopers; Karim El-Sahy, founder and CEO of Genius Ventures; Gideon Simeloff, head of twofour54 Ibtikar; Feroz Sanaulla, regional director at Intel Capital; and Ahmed El-Alfi, founder and CEO of Sawari Ventures.


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