Stephan Schmidt - January 15, 2026

The Biggest Startup Mistake

Startups.

Now I coach founders and CTOs as a CTO coach - again mostly growing startups from 5 to 100 engineers. Startups have dominated all my working life.

And I found the biggest mistake startups make.

No really.

The mistake: Founders confuse a product idea with a vision.

A product idea is not a vision. A vision is never about you, but outwards towards your users, customers and the world (your strategy to get to the vision is inwards, about your company). A vision shows a golden place in the future which changes the life and work of users and customers. Steve Jobs vision was to create a “bicycle for the mind”. In the 1970s he probably would not have thought that that product would be the iPhone. A bicycle for the mind changes the life of users. Bill Gates said, “a computer on every desk”. What would the computer be? Not what was possible in the 1970s. What would the software look like that everyone - and your mother - could use?

A product idea is not a vision.

And this mistake creates problem after problem after problem for the startup.

Two major consequences:

1. What do you do after you’ve launched your product?
2. How to move forward as founders?

What do you do after you’ve launched your product?

If your vision is a product idea, what do you do after 6 months when you have launched? Congratulations, you’ve implemented your vision. But now what? The only way forward is “bigger”, become the “market leader”. Sounds great, but it does not give any direction to the company - where should we move, what should we do?

You hire more people and everything explodes. Everyone goes in a different direction for this “growth”. Marketing, sales, product, engineering, everyone is going somewhere else. Everyone has their own ideas on how to create that “growth”.

Everyone is competing for the same resources. The company is in chaos. The roadmap is flip flopping from quarter to quarter.

The biggest impact is in product development. And how to align the company if there is no vision? Millions of ideas, but which one to build? Competing ideas, diametrically opposed ideas. Companies fall back to ROI, opportunity driven development. Which gets you to 10% YoY growth, but doesn’t make you the next Google or Apple. In my CTO coaching, CTOs and CPOs struggle to decide what to do, how to move forward.

And only because the founders - or CEO - confused a product idea with a vision.

How to move forward as founders?

You’ve founded the company on a product idea. Pre-Launch was great, moving toward that one goal everyone had: Launch! Perhaps the second common goal was “Get VC funding”. Now what? You’ve launched, you’ve got VC funding, now what?

Founders get into bitter fights on what is the next step. There is no vision or direction to guide them. The vision was the product idea, achieved after 6 months, done.

How to grow? Move into B2B? Add more product lines? Add more features? Internalize? New markets? New segments? New business model? Every founder has a different idea - because they didn’t talk about what would happen after a successful launch and funding round. They should have had that discussion before they signed their life to the startup with two other people.

Bitter infighting between founders happens. The company is without direction.

Either founders leave and move on or they split respnsibilities and don’t talk to each other. Everyone doing their own thing inside one company.

What to do?

Find a strong vision that changes the life and work of users and customers.

Hire on that vision.

Determine the strategy to get to the vision.

Decide on what you need to do: Does this help our strategy and vision? Go! Is it a nice idea but a distraction? Drop it.

Everything becomes easier with a clear and strong vision.

Thank me later.