Now that we’ve covered the basics, let’s take a look at some commonly held myths about Entrepreneurship and what to expect when starting a new venture.
5 Commons myth about startup
1.If my product or service is good, I’ll be successful?
No, not necessarily and this can be very frustrating. Many entrepreneurs have made the incorrect assumption that if they were able to create a great product, success would arrive naturally. Why is this wrong?
– First, because creating a great product and figuring out how to market it are completely different things.
– Second, because relationships and connections can make a huge difference, particularly if you haven’t built a brand yet and need some help in that area.
– Third, it’s VERY common to overestimate the demand for your services.
2.Entrepreneurship will give me back complete control over my schedule
Well, yes and no. While startup founders may not have to punch a time clock, they often work many more hours than what they used to in their previous corporate working experience. This might be out of passion, but also because if you want to be successful, you have to treat your client like a king and respect his/her deadlines.
3.Never give away your product or service: It’ll dilute your brand.
Not always true. Early on in an entrepreneurial venture, there may indeed be strategic opportunities for providing product or service pro bono. Sometimes, the value of getting in front of your target audience to showcase your abilities or products can outweigh the opportunity cost of the missed revenue.
That said, any time you’re providing a product or service for free or at a cost, you must be careful not to have an overall deleterious impact to your bottom line.
Our advice here is to provide a customized version that truly is a “sample” so that potential clients don’t devalue your service – make sure that what you offer for free is limited in time and/or scope.
4.Early on, I need to do it all myself
It’s usually true but not always. If you’re starting with limited capital, you’ll need to roll up your sleeves and wear many hats.
However, it often becomes more cost-time effective to outsource key functions in areas you aren’t an expert in, when the function is critical to your business’ success and/or the costs to outsource are minimal. For example, if you know that your business needs a sophisticated website, it’s risky to anoint yourself your own IT Director if you can’t spell Java, much less use it.
Of course, hiring, even of freelancers, can be very expensive and risky. What we recommend here is a very simple rule of thumb: NEVER hire somebody until you have tried to do the job yourself. You will realize that maybe you can quickly learn it and you are not that bad, and you will be in a position where you will know better what to expect from your future hire when you realize you really don’t have the time or skills. If you respect this rule, you will better manage your cash burn.
5.The more clients, the better.
Not really. Again, early on it’s tempting to take on any client that shows interest but spreading yourself too thin can be risky.
This is particularly true for early-stage startups who need quick cash and when the startup idea is not clearly defined. The danger is that when you don’t clearly define your products or services, you can lose focus and confuse the marketplace in your areas of expertise.
Also, let’s face it: All clients aren’t good ones. Some are extremely high maintenance, unrealistic, unreliable or price hagglers. You definitely want to be selective enough to weed out clients that may become more of a problem than they’re worth.
Another mistake entrepreneurs make is taking on too many clients too soon. By trying to juggle too many responsibilities, you could end up decreasing your credibility, quality and overall brand, which could have longer-term consequences.
It starts with heart — having the inspiration, passion, and mindset. Being an entrepreneur requires confidence, resilience, work ethic, and adaptability. While it’s practically impossible to have the perfect mindset at the outset of starting a new venture, being in an environment that allows you to have idols can provide much needed inspiration and the reminder of how to engage with your passions.
Next is learning the knowledge. This includes how to identify opportunities, business skills, and how to sell and pitch. MIT has an integrated, comprehensive, and proven process to crank out successful companies called the Disciplined Entrepreneurship process. Some things cannot be learned just by doing, and this process breaks it down and makes it manageable.
Once inspired and passionate, and equipped with knowledge, the next piece is about getting out there and DOING STUFF. It’s not enough to write a fancy business plan, but important to realize the value of interviewing customers, developing a prototype, pounding the pavement to sell to customers, and pitching your company.
Finally, having the people around you to be able to pull it off. These people include co-founders, peers, mentors, instructors — all the people for feedback, potential customers, and moral support.
What Should You Expect?
“A journey of a thousand miles begins with a single step”
– Lao Tzu, Chinese philosopher
The path is clearly not linear and you will go back and forth until you reach market validation, and then demonstrate that you can repeat, scale it, and make profit.
Like for hedge funds in finance, don’t let the survivor bias trick you into being overly confident. Survivor bias tricks many founders and investors as they obviously read more about successful companies than failed ones.
(by Michael Skok, Partner at _Underscore, VC, EIR at Harvard Business School)