When entrepreneurs ask me for help, the two things they always want is A) to raise money, and B) to get publicity. While both fundraising and PR are important, I think entrepreneurs focus way too much on them, and not enough on perfecting the product and reaching out to customers.
Funding and press are the two most visible components of hype in the startup ecosystem. Every financing is reported, and every TechCrunch/Mashable/GigaOm story is breathlessly forwarded to potential investors. Yet funding and press are means, not ends. They only matter inasmuch as they help you win customers and generate revenues.
When entrepreneurs focus too much on raising money or seeking publicity, they are making the mistake of trying to win the news cycle, rather than the market.
In politics, it's very tempting to try to win the news cycle. The pundits chatter away 24/7, and the question they're always debating is simple: Who won?
The problem is, winning the news cycle guarantees nothing. Color won plenty of news cycles when they launched...but they failed to win over users and customers.
Dropbox recently announced their data store API. They didn't even bother with a press release, just a brief blog post. Yet the news led tech headlines everywhere. Focus on winning the market, and eventually, your success will let you win the news cycle.