Every year, more entrepreneurs move into the tech space, hoping to build the next big ‘thing.’ The Kauffman Foundation points out that the U.S. averages 20 companies founded per year that reach 100 million in revenue. Sadly, the tech start-up industry also has the highest failure rate at 63%.

The rapidly-shifting digital market space makes it hard for a tech entrepreneur to navigate. Start-up founders often fall for common entrepreneur mistakes that ruin the business. Here is a detailed look into four pitfalls that you may need to be wary of:

tech entrepreneur

1. Scaling Pre-maturely

Potential tech entrepreneurs can, at times, get swept up in the excitement of their product or service. The founders lose sight of the bigger picture. If you find yourself spending too much cash than the essentials of your growing enterprise, you may hit some hard bumps down the road. Take time to think through each approach and validate consumer behavior towards your product or service. Success isn’t achieved overnight but through deliberate, well-planned strategies. However, you may need to be careful about taking too long to launch the ‘perfect’ product.

2. Going All Alone

It’s easy for a tech entrepreneur to hoard their business idea, often failing to ask for help. With the cut-throat competition within the tech-space, start-up founders create an unhealthy attachment to their idea. They become too rigid; wanting to prove to the world they can figure out everything on their own. Find a mentor or coach that can help you avoid costly entrepreneur mistakes. Admit that you don’t have all the experience and bring in a tech entrepreneur partner. Finding a business partner that can warn you of red flags in the business model is vital for your start-up’s success.

3. Hiring the Wrong Talent

As many as 69% of U.S. entrepreneurs start their businesses at home. While you may have to be the jack-of-all-trades for a period in your start-up, it may not be sustainable in the long run. However, you may need to be careful about the staff that you bring on-board. A survey by CB Insights shows that 23% of start-ups fail due to an inadequate team. You may feel the pressure to hire aggressively to build a team that accelerates your product launch. However, the mad rush may lead to choosing employees that do not fit the company’s culture or have the wrong skill-set. Take time to get the right talent to support your business goals and vision.

4. High Cash Burns

The Small Business Administration points out that 22.5% of all start-ups fail during their first year of operation. Eighty-two percent of these are due to poor cash flow management. Without the right business plan in place, a tech entrepreneur may struggle to bring their products to market. It may be hard to get your tech idea funded. It is even harder to channel the money to a concept that works. Align the spending of your start-up to key strategic goals to control costs during your formative years.


As a tech entrepreneur, you may need to be wary of these four common pitfalls that ruin businesses. Raffy Pendery, a successful tech entrepreneur, VC, and public speaker, is willing to hold you by the hand as you take on the entrepreneurship journey. Follow this blog for more entrepreneur tips for business success.