Many Founders Waste Time and Money Solving the Wrong Problems. Here Are 3 Big Ones

Startups often fail because intelligent people spend enormous effort trying to fix the wrong issues.

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When a startup struggles, founders usually assume the solution is obvious: more marketing, more hiring, or more capital. But in my experience advising founders, the real issue is usually something else entirely.

Startups rarely fail because founders don’t work hard enough. They fail because intelligent people spend enormous effort solving the wrong problem.

Here are three of the most common ways startups and founders solve the wrong problems, and where they should focus instead.

Fixing retention with acquisition

A SaaS founder came to me with a clear ask: help him raise more money. Sales were slow, attrition was high, and he was convinced that a longer runway and more marketing would turn things around. He was a smart guy who had done extensive research. He had designed a product to solve one of the most painful problems his customers faced. The product he imagined would have been a sure hit. The product he was actually selling was a total miss.

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They had launched a bare-bones beta, and customers were patiently waiting for phase two to deliver the features they needed. What those customers didn’t know was that his engineering team had already determined those features could never be built. More investment couldn’t solve that. More marketing was just bringing in more unhappy customers faster. Once we recognized the real problem, we pivoted to a different market whose needs could actually be satisfied with the tool his team had built. Sales grew immediately.

Building features customers don’t want

Another founder had the opposite problem. His engineering team was incredibly productive and releasing new features almost every day. By the time the product launched, it was far more sophisticated than anything else on the market, and he priced it accordingly. Sales were disappointing. The founder assumed customers simply didn’t understand the value. So he lowered the price and increased marketing, describing the product as “Mercedes quality at a Kia price.” Sales improved slightly—but not much.

When I spoke with customers, the real issue quickly surfaced. The task the product helped with simply wasn’t very important to them. They didn’t want advanced features. They wanted the task to stay simple and effortless. What the founder saw as powerful differentiation felt like unnecessary complexity to customers. The competing product was popular because it allowed the task to be performed at a “no-brainer” level.

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