People usually misunderstand what it means to be an entrepreneur (read: The Meaning of Entrepreneurship). One of the most difficult issues that they face is their own motivation. The first time entrepreneur usually believes that his primary motivation is commercial. Their actions usually prove that commercial goals are low priority. This schizophrenia causes unnecessary stress to the entrepreneurs and value destruction to the company.
Probably the biggest mistake that entrepreneurs make is to launch a company to develop products and services that they think are worthy of the market. People have great ideas of what would make a great restaurant, magazine, medical clinic, etc. They then go launch it. The problem is that the market does not just look at quality of the product or service, the price is also important. Building the best is not commercially viable if the price point is not acceptable to the market.
The next mistake is that entrepreneurs build a company to create a work environment that they are comfortable with. Although this is an admirable goal, it cannot be a primary goal. The primary goal is to develop a commercially viable company. Leaving an established company and raising equity that is burned so you can avoid the career challenges of the successful company is not acceptable.
What do I mean by this? The best example is the employee in a sector that is rife with politics who tries to escape it, but keep the trappings. The world of finance is an example. The top financial institutions will often provide perks that are not normally handed out in other companies: traveling first class, staying at 5-star hotels, paying for expensive dinners and so on. These perks are provided specifically because of the crappy culture prevalent in the firm, it is a balm for putting up with a low quality professional life. If you agree with it, go ahead and work there. If you disagree with it, walk away, but don’t you dare try to keep the perks. If you want Goldman Sachs perks, then you better be consistently delivering Goldman Sachs returns.