John Osher has developed hundreds of consumer products, including an electric toothbrush that became America’s best-selling toothbrush in just 15 months. He also started several successful companies, including Cap Toys. He built sales to $125 million per year and then sold the company to Hasbro Inc. in 1997. But his most lasting contribution to the business world just may be a list of screw-ups he jotted on the back of a piece of paper.
“After I sold my business to Hasbro, I decided I’d make a list of everything I’d done wrong and [had] seen other entrepreneurs do wrong,” explains the 57-year-old Jupiter, Florida, serial entrepreneur. “I wanted to make a company that didn’t make any of these mistakes. I wanted to see if I could come up with the perfect company.”
He came up with an informal list of “16 Mistakes Start-Ups Make”—since expanded to 17—that has been used in a Harvard Business School case study, has been cited in many publications, and has become a part of what he teaches budding entrepreneurs in his frequent university lectures.
- Mistake: Failing to spend enough time researching the business idea to see if it’s viable.
- Mistake: Miscalculating market size, timing, ease of entry and potential market share.
- Mistake: Underestimating financial requirements and timing.
- Mistake: Overprojecting sales volume and timing.
- Mistake: Making cost projections that are too low.
- Mistake: Hiring too many people and spending too much on offices and facilities.
- Mistake: Lacking a contingency plan for a shortfall in expectations.
- Mistake: Bringing in unnecessary partners.
- Mistake: Hiring for convenience rather than skill requirements.
- Mistake: Neglecting to manage the entire company as a whole.
- Mistake: Accepting that it’s “not possible” too easily rather than finding a way.
- Mistake: Focusing too much on sales volume and company size rather than profit.
- Mistake: Seeking confirmation of your actions rather than seeking the truth.
- Mistake: Lacking simplicity in your vision.
- Mistake: Lacking clarity of your long-term aim and business purpose.
- Mistake: Lacking focus and identity.
- Mistake: Lacking an exit strategy.