The journey of launching a tech startup is often marked by rapid iteration and a sustained struggle to differentiate a product or idea in the face of intense industry competition. While the drive to innovate can propel a fledgling tech business forward, certain missteps in the early stages can lead to significant setbacks—or even derail a venture entirely.
Awareness and avoidance of potential pitfalls can mean the difference between winning market share and losing the battle to survive. Below, industry experts and entrepreneurs from Forbes Technology Council share their insights and experience on common mistakes tech startups make and how to avoid them.
1. Expanding Scope Too Early
A big mistake startups make is expanding their scopes too early without first achieving their primary goals. Optimism is crucial for startup growth, but it should be balanced with a clear, focused vision and a realistic view of what is possible. Ideally, each step in the product roadmap builds on the previous one to create a virtuous cycle of success, driving steady progress toward a well-defined goal. – Chock Karuppaiah, Ohmium International Inc.
2. Prioritizing Development Over Validation
Based on my experience with startups, a key mistake many founders make is wrongly prioritizing product development over understanding their target market in detail and getting critical feedback and validation early on. It’s important not to fall in love with an idea so much that you’re not able to fine-tune your business plans and strategy based on market research and early feedback. – Mariam Sorond, NextNav
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3. Failing To Verify They’re Solving A Real Problem
You can create the “perfect” product, but it might still flop. Many startups fail by rushing to build without validating if they’re solving a real problem, falling for the “if we build it, they will come” myth. Without user interest or understanding, this leads to wasted resources and low (or no) adoption. Focus on validation over vanity to build scalable growth and a product people actually need. – Greg Brunk, MetaRouter
4. Expanding Without Understanding TAM Limits
Founders often err by expanding without understanding their total addressable market limits. Not every tech company is destined for unicorn status; many thrive profitably in niche markets. Overexpansion beyond TAM capacity can lead to failure. Founders must assess TAM before scaling, and if growth plateaus, focus on cost-cutting to ensure profitability. – Lisa Loud, Secret Network Foundation
5. Relying Too Heavily On ‘Experts’
A big mistake many founders make is trying to outsource tasks to “experts” instead of doing them themselves. This is particularly common when it comes to less “glamorous” parts of the job (such as marketing, sales and so on). Apart from not having a close feedback loop, an even bigger problem with this approach is that the founder doesn’t learn best practices themselves, making it hard to assess the performance or weaknesses of the “experts.” – Ori Eldarov, OffDeal
6. Taking Institutional Capital Too Early
Be willing to invest your own sweat equity. With venture capital, you tend to overspend, thinking overly optimistic sales plans will materialize. When they don’t, you wake up and realize you no longer control your own destiny, and your equity may be worth far less. It’s better to starve a little and break even as quickly as possible. – Lori Schafer, Digital Wave Technology
7. Ignoring Product-Market Fit
Ignoring product-market fit is a major mistake. Many entrepreneurs fall in love with their solutions and fail to validate whether what they’ve created solves a real problem for customers. Early research and iteration based on market feedback can prevent wasted resources and lost momentum. – Chandler Barron, Parathon
8. Not Putting The Market And Customers First
One mistake is diving too deeply into technology, spending all your time building an ideal product instead of investing in marketing, trying to find clients and getting early traction. The right move is to validate an idea—or many—and ensure that the product solves problems or creates value for a customer. In a nutshell, it is all about the customer, market and market size—only after those is it about the product. – Pavlo Pechenyi, OneNotary, Inc.
9. Striving For ‘Perfection’
One big mistake many tech startups make is focusing too much on building a “perfect” product instead of solving real customer problems. This often leads to over-engineering, wasted resources, and launching a product that doesn’t meet market needs, or, by the time the product is ready, finding that customers’ expectations have changed. – Shreesha Hegde, Fractal Analytics
10. Neglecting To Test Ideas With Real Customers
A common mistake many tech founders make is focusing all their development efforts on their own understanding of what a prospective customer needs rather than testing their ideas with real customers early in the process. This often results in a solution seeking a problem to solve rather than a solution to a real problem that the market is willing to pay for. Startups could spend years and a lot of money on a product that no one needs. – Peter van der Made, BrainChip LTD
11. Trying To Boost Sales With Marketing Shortcuts
The most common mistake tech startups make is seeking marketing shortcuts to boost sales in the early stages. There are no shortcuts—haste makes waste! The best formula for success is to focus on product or service quality, build a solid reputation (such as on review platforms like Trustpilot), and let growth come naturally. – Hristo Rusev, ScalaHosting
12. Underestimating The Need For Scalable Processes
Launching your product without the right systems in place—whether for hiring, operations or support—sets the stage for major setbacks. Don’t wait until things are breaking to invest in scalable processes. Strong processes from the start give you the flexibility to grow smoothly, which is critical for long-term success. – Nacho De Marco, BairesDev
13. Losing Sight Of Customer Needs
Startup leaders must be relentless visionaries. To succeed, they must be hyper-focused on solving the biggest challenges facing their customers while ensuring they can quickly deliver the underlying solution. By prioritizing the needs of their customers and working closely with partners who deliver their solutions, they can overcome the obstacles that occur as a new entrant in the market. – Shane Buckley, Gigamon
14. Remaining Too Fluid
The biggest mistake I see in startups is allowing the business to be too fluid for too long. “Startup vibes” require the ability to grow and shift organically, but at some point, the organization must formalize. This is especially true when it comes to identity and ways of working. Failure to do so often leads to too many conflicting priorities among too many different people. – Joe Way, University of California, Los Angeles
15. Accumulating Too Much Debt
Tech startups that take on debt to accelerate growth, rather than focusing on solid planning, put themselves under intense pressure to not only grow the business, but also pay down the debt. A startup without private equity, artificial intelligence or outside investors should have clear goals and an understanding of what it will take to achieve them. – Robert Giannini, GiaSpace Inc.
16. Targeting Incorrect Or Too Many Buyer Personas
Startups should identify not only buyer personas, but also the market size of each persona when determining product-market fit. Getting feedback from the wrong group or from too varied a group of buyer personas will lead to undifferentiated products and lower revenue. – Vivek Bhaskaran, QuestionPro
17. Prioritizing Funding Over Revenue
If a tech startup has a viable product that solves a market problem, then there are only three things it should focus on: revenue, revenue and revenue. Activities like pitching venture capital and private equity firms to get overfunded or trying to position the company as an M&A target are going to be much more successful once you have a product that has an actual paying customer base. – John Linkous, Phalanx Security
18. Focusing On Too Many Things
One major mistake many tech startups make is trying to do everything at once—building too many features, targeting too many markets or chasing every opportunity. Founders must master the art of prioritization and focus on solving one core problem exceptionally well. Validate your hypothesis, iterate relentlessly and scale only when your foundation is solid. – Christoffer Bouet, Contribe
19. Overcomplicating The MVP
A big mistake is overdoing things and failing to design a simple, viable architecture. For a minimum viable product, it is essential to reduce the interface, product or communication to only its most essential elements. The last problem a startup needs is technical debt! – Sireesha Chilakamarri, AdMedia
20. Quickly Becoming Dependent On Cloud Providers
Cloud providers often attract startups with generous grants, but this can lead to costly dependencies as expenses surge once the grants expire. For data-heavy tasks like training AI models, overreliance on the cloud can quickly drain investor funds. The solution? Plan ahead, balancing cloud resources with in-house infrastructure to ensure long-term cost efficiency and scalability. – Ihar Kliashchou, Regula
