Last month, start-up generator and early stage venture capital firm Antler launched in New York, its seventh global location. It’s aiming to launch 160 new companies in the U.S. within the next three years – and needs people to head up those firms.
The company selects candidates to lead new tech businesses, helps them build a strong founding team and business model, and then invests in the startup to help it grow.
Among its portfolio of start-ups are southeast Asian cooking app YoRipe and Cognicept, a platform designed to handle errors made by robots.
Magnus Grimeland, Antler’s founder and CEO, believes that if new businesses are led by a passionate founder with the right skillset, the chances of success would be higher.
In an interview with CNBC, Grimeland outlined the four most common mistakes start-ups make, claiming that avoiding just one of them would reduce a start-up’s odds of failing by about 30%.
“Most mistakes start-up founders make are around basic things that if you knew in the beginning you’d just avoid,” Grimeland told CNBC.
“The number one reason start-ups fail is because people are not committed enough. Running a business isn’t a part-time job – we want people to think: ‘I’m going to do whatever it takes to make this a success.'”
He told CNBC that entrepreneurs could only build a great business if it was the focus of their working life.
“Anyone who isn’t willing to put five to 10 years into building their company up (won’t succeed),” Grimeland said. “If you took away start-ups with leaders who aren’t focused, the fail rate would go way down.”
According to Grimeland, many of the start-up failures he’s witnessed have been sparked by incompatible leadership teams.
“They didn’t have the right team building the business,” he said. “And that can be because the founders start disagreeing or because they’re too alike.”
Business founders needed to find the right balance between having a team whose vision aligned with their own and getting people onboard who could fill the gaps in their own experience and skillset.
“You need to put a serious amount of effort into deciding who you’re going to build your company with,” Grimeland advised.
“Unfortunately, there are some great teams out there who are just working on the wrong business model,” Grimeland told CNBC.
One of the top mistakes entrepreneurs make at the very outset is developing something that’s not solving a problem, he said.
“Go and talk to the people who are going to be your customers,” he advised. “Something might be a problem to you, but if you’re the only one who wants it solved there’s going to be no one to sell your idea to.”
Founders could often get caught up in developing new technology and distract themselves from their business model, Grimeland added, emphasizing that investing in the technology itself doesn’t solve a problem.
He also flagged that business founders should monitor the market they want to enter to ensure they aren’t rolling out their product too early or too late.
Candidates vying for a position as a start-up founder with Antler must show they have “grit” to be considered. That tenacity is a vital leadership trait that increases the chances of a company’s success, according to Grimeland.
“These things are pretty basic – if you have the right team who are fully dedicated and not going to give up, the likelihood of success is pretty high,” he said. “You might still fail now and then, and that’s ok – fail and do it over, and next time you’ll (know what to do). Don’t waste three or four years by getting it wrong at the outset.”