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6 Bad Investment Ideas Entrepreneurs Should Avoid

Derek Lotts



6 Bad Investment Ideas Entrepreneurs Should Avoid

Becoming an entrepreneur is not simple math; you cannot just calculate and combine all of the parameters so that the result boils down to guaranteed success. It would be as if you are able to avoid every single cause of failure, which is, truth be told, impossible.

However, when you look at things from a different angle, you can definitely develop a recipe for prosperous outcomes by making a list of all the things you should not do.


6 Bad Investment Ideas to Avoid

This list is actually more useful in practice, so let us delve a little deeper to learn what moves, ideas and circumstances are a ticket to a business downfall.

Here are 6 bad investment ideas that entrepreneurs should avoid.


1. Being a Single Founder

There are not a lot of successful start-ups where just one person is at the helm.

Many globally renowned companies have more than one founder. Why is this usually the case? Well, first off, being alone in such endeavors is a vote of no confidence. If you cannot include other people in your project, than how can you expect it to flourish?

On the other hand, even if you do have a good bet, you are still at a disadvantage, because you need colleagues to exchange ideas, brainstorm, avoid stupid decisions and get things back on track should things go awry.

Remember, esprit de corps is what holds things together.


2. Choosing the Niche

There is one common problem many inexperienced entrepreneurs are afraid to tackle head on and it is called competition.

That is why they choose a niche that is small and obscure. If you want to aim higher, than you, definitely, have to get out of your comfort zone and face the challenges ahead.

Marginal projects will not get you anywhere in particular, even though many people unconsciously refuse to pursue grand ideas.

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The solution would be to think about such ideas without involving yourself directly, so you can include someone else to help you with your start-up. Once you feel surrounded by other competitors – that means you are actually doing something right.


3. The Idea

Many of them are just imitations of some existing companies.

Yes, there are many sources for copying and adapting previously developed ideas, but not a lot of people have to knack to invent something new and unique. Frankly, it is hard to be innovative, yet there are a few people who have not imitated some other start-up.

How did they do that?

Well, it turns out that the best problems are the ones that affect you on a more personal basis.

This approach has prompted many successful people to find effective solutions – Apple’s Steve Wozniak wanted a computer, Larry and Sergey made Google because they could not find stuff online and YouTube founders actually could not find the video of the 2004 Super Bowl incident with Justin Timberlake and Janet Jackson.


4. Obstinacy

Many people claim that having a precise vision of what you want to accomplish is the key component to achieving success.

Well, knowing what you want is fine and dandy, but this is not something like sports where you precisely know what the problem is and how to overcome it.

Investing in a business has a much more scientific approach that compels you to follow the current trends, rather than to have a higher score than your opponent.

Original ideas can go wrong and changes will definitely ensue, so the best thing in the world of business is adaptability. Discard old ideas if necessary, be open to new ones and be ready to seize every recently developed chance.


5. The Programmers

You cannot live without them, but if you hire the bad ones, they can be your end.

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Many e-commerce businesses lost their position on the market, because their programmers just could not get the job done properly. However, are you capable of telling which one is good and which one is bad to begin with?

Unfortunately, no one is exactly sure, but the only thing that can help you is to establish a sense of trust with one programmer who can help you hire the others. Friendship wins.


6. Dealing with money

You simply have to invest in your business, so knowing how to deal with money is crucial. If there are more than one founders, than you get a good bet statistically to raise enough for your future endeavors.

However, every start-up funding is not initially profitable and once money runs out, how will you stay on the scene long enough to make some more?

You constantly have to advance to a visibly higher level: if all you have is an idea, you need a working prototype; if you have a prototype, focus on launching; if you launched, aim for significant growth.

It depends on investors, because until you are profitable that is who you have to convince to support you.

So, too little money means that you will not even get the chance to get airborne, spend too much means you’ll run out of time soon enough; and raise too much means that you are all grown up have less room for mistakes and flexibility.

On top of it all, when it comes to personal finance, the question is – should you invest in gold or silver bars due to their rising prices? This way you can actually help yourself on the long run and keep your business and life intact.



One way or the other, you have to get your hands dirty without a half-hearted effort.

Learn how to manage your investors, also learn from them, too, because they always have useful insights. Do not get to pushy, listen to other opinions and make educated guesses and estimates. The key is to play your cards smart and safe.

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Once again, there is no recipe that will guarantee you success. However, knowing how not to do things will save you a lot of trouble.

Keep your eyes peeled, do all the necessary research about the market, the demand, and your client’s preferences; and never stop adapting to the ever-changing competitive business world if you are eager to survive.


Do you have any other bad investment ideas that entrepreneurs should avoid? Leave a comment below.

Derek Lotts is a Sydney based writer and researcher, a regular contributor at Smooth Decorator blog. He writes about décor, gardening, recycling, ecology and business. He thinks all of these topics fall under the self-improvement category. He believes in the power of sharing ideas and communicating via the internet to achieve betterment. Follow him on twitter.