I spoke with seasoned founders and reviewed statements from iconic entrepreneurs who have built billion-dollar companies or survived catastrophic failures.

These are the top ten mistakes first-time founders make (and many times second time founders forget to remember) and the hard-earned truths from those who have been there - p.s i’m certain there are a few here you haven’t heard before.

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1. Underestimating Time & Capital

“We are willing to be misunderstood for long periods of time.”
- Jeff Bezos, 1997 Amazon Shareholder Letter

First-time founders typically underestimate how long momentum takes to build. A founder of a fintech unicorn once said “double the time, double the money” - hinting at first time founders’ natural predisposition to underestimate how long everything will take, and how much it will cost.

Lesson: Double Your Time, Double Your Money. If you think it’ll take a year, make it two, if you think it’ll cost 100, make it 200.

2. Not Resolving Co-Founder Misalignment Quickly

“A founder breakup is like a company death. You’re not just splitting from a person, you’re splitting from a vision.”
- Brian Chesky, Masters of Scale interview

This was a common thread and the founder who I asked what she would do differently said - paraphrased “I’d move much more quickly than I did. If it isn’t working, i’ll be direct and have the conversation, if it still doesn’t work, i’ll move quickly, instead of hoping endlessly it gets better”

Lesson: Misalignment compounds. Waiting costs you years. Act quickly, give feedback quickly, decide quickly.

3. Raising Too Much Money Too Soon

“More startups die of indigestion than starvation- David Packard, The HP Way

Overcapitalization leads to waste, distraction, and unrealistic expectations. A common mistake in the same thread is also doing too much too soon.

Success is about ruthless and accurate prioritisation. This is especially true when you are early and you are seeing some market pull, but it is in different directions.

As a startup, you have limited resources and time, every decision on what you do, and don’t do will define your potential success or failure. A founder I spoke with recently who had a failed, highly funded first startup highlighted this beautifully – “now, i’m more strategic – making sure the tyres work before pumping the gas”

Lesson: Money magnifies what already exists. If you have no discipline, more capital accelerates the crash.

4. Hiring Credentials Over Capability

“There are no silver bullets in hiring. Only lead bullets.”
— Ben Horowitz, The Hard Thing About Hard Things

Founders often assume someone from a famous company will automatically succeed. Horowitz warns that there are no magic hires—only hard, thoughtful decisions. One of the founders we spoke with who had raised over $60m for a fintech company said

“Don’t over-hire and don’t “over-title”. In other words, don’t go mad and hire lots of people - you’ll be amazed how much you can deliver with a small, focused team. And don’t immediately call everyone C-something. A good number of those people won’t be the right ones to scale with you, but they might be solid foot soldiers. You will need the C-titles for later in your growth story and if you allocate them now, it’s really hard to tell someone they are no longer C-something and you are bringing in someone above them”

Lesson: Pedigree does not equal performance in a startup environment.

5. Obsessing Over Product & Neglecting Distribution

“First-time founders focus on product. Second-time founders focus on distribution, third time founders focus on margins”.”
— Andrew Lee, Partner at a16z Speedrun

Distribution is half the battle. Andreessen argues that most failed startups had decent products but zero traction because they didn’t prioritise go-to-market early enough. Some who did prioritise both, didn’t take enough about margins.

Lesson: Distribution is not a stage. It is a core pillar of company design. Second time founders are strategic about figuring out distribution, sales and margins, many times before there’s even a product.

6. Overestimating Investor Value Add

“Your investors are not going to build your company for you.”
— Elad Gil, High Growth Handbook

As a founder you must operate independently of investor intervention. You’re the driver. Yes, it helps to stay open minded to quality feedback, but don’t overestimate investor value in the process. The myth of the “value-add investor” is often overstated. Many investors actually erode value, and the best ones either don’t interfere and know exactly what they are good at.

A founder i spoke with who is building his second company said to me “i’m doing it differently this time, i am being very deliberate about who joins our journey as an investor”.

Lesson: Investors are accelerators, not operators. Be careful who you bring on the journey and also, it helps to know exactly what your investor expectations are, and ensure you’re aligned, before you enter into an investment relationship.

Bonus Tip: Ask every investor who is looking to invest in your company what their expectations are for their investment.

7. Not Balancing Optimism and Reality.

“You have to be willing to see reality. Growth is the oxygen. Without it, you die.”
— Reed Hastings, Netflix Culture Deck Discussions

Hastings emphasizes data-driven realism, not ideological optimism. Passion is critical, but without market opportunity it is not sustainable.

This climate tech founder essentially said

“I was too idealistic. As a founder, I could see this enormous existential problem for humanity, and I could see that we clearly had an amazing solution and we went to market with that solution using language all around solving the climate crisis.

And unfortunately, that just doesn’t resonate with most people. And so what we have had to do in recent years is flip our messaging hierarchy and not sort of bang on about the climate, but instead we talk about. Sort of what’s in it for you”

Lesson: Market reality is non-negotiable. Optimism is important, but translating it to reality is how things get built. Feedback is oxygen. You cannot impose your will on the market, your job is to find out what is true, and scale it into repeatable value creation that is commercially viable.

8. Mistaking Passion for Market Demand

“The market is the ultimate judge. Not your passion.”
— Mark Cuban, Inc. Interview

Cuban consistently warns founders that passion is meaningless if it is not tied to customer demand. In Mark’s interview he says “ Sales Cures All”. Hinting at the fact that ultimately commercial viability is the true litmus test of a successful business.

Lesson: Passion fuels you, but only demand funds you.

9. Ignoring Instinct

“The more I trusted my gut, the more successful I became.”
— Sara Blakely, How I Built This interview

Many founders have highlighted this, however hindsight is 20-20. Sometimes as a founder you overestimate how much you don’t know, and underestimate how much you know to be true. There is an element of trusting yourself, and knowing which feedback to take vs which to ignore. I talk about “How to Choose Which Advice To Ignore” on my Linkedin Post HERE

Lesson: Advice should inform you, not override you.

10. Misunderstanding Venture Capital Dynamics

“We need one investment that returns the whole fund.”
— Fred Wilson, AVC Blog

Wilson explains that VCs do not optimize for singles and doubles. They optimize for fund-returning outcomes. Founders who do not understand this dynamic misread investor behavior. Not fully grasping what taking venture money would mean in terms of control, direction, and expectation is also a huge problem. This is echoed with first time founders who felt in retrospect, they didn’t fully understand investor dynamic

Also, there are so many things about VC that have nothing to do with you/your startup, but impact you directly. It helps to know them, so you can navigate them better.

Lesson: You are not just pitching individuals. You are pitching institutional math. Understand the math and patterns that guide investor decision making, and the journey is less hard.

Related Article: 10 Reasons Investors Say No, and Won’t Tell You

Finally,

The difference between first-time founders and repeat founders is not intelligence. It is pattern recognition. The mistakes above are not random, they are predictable and even when you know them you have to be very careful. When you understand the forces at play, you make decisions from strength and strategy, not just hope and optimism.

Till next time.

Maria Rotilu

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