False Assumptions on part of Entrepreneurs
When we were initially presenting our business case to investors, we generally assumed that we needed to break even as soon as possible and show them the most exciting profitability margins mankind had ever seen. I today realise that it’s much more important to have a clear understanding of what you want to achieve with the funding in the next phase of your venture and what your most pressing problems are that need solving. I realised that setting targets for key metrics, developing testing strategies and coming up with a budget for such activities was much more important. At the same time, focusing on the potential of sales is much more important than trying to provide a crystal ball forecast on gross margins and EBIT.