As outlined in this post, what we look for is founders that are resilient, can execute fast and know how to communicate. So many of the red flags we look out for are just the opposites of those traits. Red flags
1. Slow progress: One of your top advantages as a startup is your ability to move quickly. If you don't move quickly, you're toast. A competitor will beat you to it, and the team morale will be hard to keep up, so early employees/co-founders will likely quit or lose excitement. If a week has gone by and there is no notable progress or update, it's probably not a good fit. If the founders have been working on the idea for 2 years and there is no significant progress or traction, the founders should have been able to make a judgement call to pivot or scrap the idea and start over. If you've been working on an idea for 3 months and haven't launched yet, that's not a good sign. If you apply to our program and don't have a landing page up (or a demo), that's ok. But if we ask you to have one up in a week and you can't do it, that's not a good sign.
2. Lack of communication skills: By no means do you have to be an expert communicator or a world class public speaker. However, as a startup founder, you're always selling. You're selling your product to customers, your company to investors or an opportunity to potential co-founders or early employees. If you aren't able to convince any of your friends to join your team, that may be a red flag. If you can't explain what your startup does clearly and concisely (in 30 seconds or less) then you either need to improve your communication skills or rethink what you're working on. There are definitely exceptions to this rule. Some deeply technical startups may take longer than 30 seconds to explain. But most should be able to explain what they do in 1 or 2 short sentences.
3. Lack of commitment: It's reasonable and quite common to have another job when you first start a startup. However, if you're not dedicating time everyday (or almost every day) to build your startup, there may be a lack of commitment. If you're not thinking about when you'll be able to quit your job and focus on your startup, you may not be serious enough about the startup. In the early days of any founder's journey, many mistakes will be made. I decided to outline some of the most common ones I've observed from very early founders. These would also qualify as red flags.
These are just a few of the most common mistakes that we've seen inexperienced or early founders make.
Greed: Spending too much time trying to negotiate their valuation with investors. Not wanting to compensate early employees with equity. Not wanting to give co-founders a big enough piece of the pie. If you're not willing to give a co-founder a sizable share of the company, you should question whether you even want that person to be your co-founder (I first heard this from a YouTube video with Michael Siebel, co-founder of Twitch).
Being too secretive: Not sharing your "idea" with anyone because you're afraid they'll steal it. Making investors sign an NDA before sending a deck or speaking with them. Being scared that large corporations are going to "steal" your idea. This is not a completely irrational fear, it does happen, but it's extremely unlikely. And even in the off chance it does happen, you still have a pretty good shot at winning. Large corporations such as Google and Facebook would struggle to replicate your idea and execute properly on it. I would explain why, but it would take an entire essay and Paul Graham has already written about it here (section 4. Fear the Right Things..)
Spending a lot of time "planning": I know this sounds repetitive, but it's one of the most common mistakes and I think it's really important to hammer the point home. The real learning starts when you launch, because then you can start getting feedback from users. If you've spent 6 months preparing for your launch, it's likely you've just wasted 6 months, since you're going to have to keep iterating either way after you launch. Reid Hoffman, founder of Linkedin, said that "if you're not embarrassed by your version 1, you launched too late." Facebook's internal motto in the early days was "move fast, break things".
It's important to note that making these mistakes is often part of a founder's journey. If you wanted to be a doctor, lawyer or engineer, you can't just get a job and start practicing in the field without ever stepping foot in a university. As a startup founder, you can step into the field from day 1 without any prior experience or qualifications. But you can't expect your first product to blow up like Facebook, Airbnb or Uber. This is why having a long-term perspective is critical - because if you spend 3 years working on a startup, fail and quit then you wasted your time. You should view mistakes and failures as learning opportunities, take as much as you can from them, and continue to move forward. Those mistakes are stepping stones - with each one, you get closer to success. Eventually, you'll completely avoid beginner's mistakes and you'll make a different kind of mistakes that lead to higher quality problems. A founder who thinks long-term understands that their success rate is increasing more and more with each failure.