I’m a football fan. In fact, in a past life, I used to write a Green Bay Packer blog. The four do-or-die games of the Divisional Playoff weekend are the highlight of the season for me, particularly when the Packers make it through to the NFC Championship game and before the sport transforms into the spectacle that is the Super Bowl.

As happens almost every year, and every regular season game for that matter, the team that wins the turnover margin tends to win the game. In the Packers-Seahawks game and the 49ers-Vikings game, the turnovers were equal, and the statistical favorite won both games, as you would predict. The Titans, however, were 10-point underdogs going on the road to Baltimore, but blew out the #1 seed Ravens thanks to 3 turnovers. Similarly, in the Chiefs-Texans game, the Texans got an early turnover on a blocked punt on their way to a 24-0 road lead. Then, gave up a turnover on a kick return to catalyze an epic drubbing by the Chiefs, 51-31.

Teams that win the turnover margin over the course of a season have almost twice the winning percentage. That equates to 10 wins instead of 6 wins. Making the playoffs instead of watching them on TV. And players and coaches getting fat contracts instead of getting fired.

As in football, “turnovers” or other unforced errors in business are equally devastating — particularly for a startup. It doesn’t seal your fate. A mistake of that magnitude can be overcome, but the statistical likelihood decreases dramatically. And usually you need to be a clearly better (and more experienced) team to pull it off.

Rarely in business does your company’s misfortune directly benefit your opponent as it does in football. But, in the world of startups, you also don’t face just one opponent. Typically you face dozens, if not hundreds of opponents. Making the consequences of a mistake all the more perilous.

What are the “turnovers” of a startup?

Just as there are interceptions, fumbles, muffed punts and other forms of turnovers, there are several different foot-shooting errors that one can commit in a startup. Here are the ones I see most often:

Wrong Team — Just because someone is your friend or roommate, doesn’t mean they’re necessarily the right person to be your CTO. Picking the wrong people as your founding team or top executives can be an error that is hard to overcome. Hire deliberately and rectify poor hires quickly. If you don’t want to burn a bridge with a friend or family member, don’t do a startup with them in the first place.

Not Solving a Real Pain — Just because something can be done doesn’t mean it needs to be done (looking at you, Zume Pizza). Make sure you’re solving a true pain. That you’re an aspirin not a vitamin. If you aren’t intimately familiar with the market and buyer pain points, talk to as many customers as you can until you are. Quantify that customer pain in dollar terms. Iterate on your solution until you are indispensable. Most companies fail because their product is a nice-to-have, not a need-to-have.

No Sustainable Advantage — Most startups are copycats of other startups. Not only do they lack a sustainable advantage but they lack differentiation of any kind — even the kind that is just words in a presentation before you’ve built any real product. Now more than ever, you must structure your business to give yourself a shot at a competitive advantage. Define it clearly and focus on it obsessively. It’s better to have sought differentiation and failed, than to be a sheep following the herd with failure guaranteed.

Poor Customer Retention — Winning customers is hard, but winning enough to fill a leaky bucket is practically impossible. Soon enough, you’ll churn through your addressable customer base and start losing altitude. Particularly for subscription businesses, if you even suspect you have a retention problem, stop, drop and roll. Get it fixed before you spend money on anything else.

Of course, there are many, many more ways one can shoot themselves in the foot, but these are the ones I‘ve seen the most — and the ones that don’t really require massive capital or technical expertise to avoid. With some focused strategic thinking, most can be addressed easily before wasting your investors’ money or your time. Today, it’s more important than ever to avoid self-induced mistakes, because I believe (in spite of the fact that I am in the midst of founding another company) that we are entering an era in which it is harder than ever to successfully build a startup. Consider the following:

Venture capital investment in the U.S. by year (billions USD). Source: Statista

There is still way too much capital funding way too many startups - about 5X what it was 10 years ago. Any idea you have is likely being done already by a dozen or more well-funded companies.
It is less expensive than ever, particularly for software companies, to get to market, which means there are no barriers to entry for even more competition.
Markets are increasingly global. Two dudes in Latvia can knock your product out in a weekend and start selling against you head-to-head by Monday.
We are not in the midst of an architectural sea change (e.g. client-server to SaaS) that makes it hard for incumbents to cannibalize their revenue and adapt to new opportunities.
The market for talent is more competitive than ever. Anyone good with the risk tolerance to join a startup is probably already doing their own startup. Anyone good who is risk averse is pulling down such a fat salary that you can’t afford them.
We are in a new age of monopolies. The tech ecosystem is dominated by a half dozen companies who control a huge percentage of the market. They can turn your company into a feature overnight. Their scale gives them potentially permanent advantages in data, capital, talent, distribution, etc. And our government is not only abetting them but doling out tax breaks to entrench their monopoly power even further. This won’t change soon. A Ma Bell-style breakup is not on the horizon.

The point is not to discourage you from pursuing your entrepreneurial dreams. After all, I’m not following that advice myself. The point is, do everything you can to minimize those unforced errors. Be as strategic, disciplined and organized as possible. By moving just a little more thoughtfully and keeping two hands on the ball, you just might be able to double your winning percentage too.

Turnovers Kill