The concept “startup” has grown so big that the very essence has been mystified by industry norms, stories and media.
The word “startup” which simply means “first used” can be very misleading. 25 years and counting in business, I have witnessed first hand the ups and downs of starting a business from scratch and nurturing it to maturity.
In my years of experience I have come to realize that most conventional wisdom about startups are myths and counterproductive.
About 472 million entrepreneurs, and 305 million startups are created a year. 1.35 million businesses out of those startups are all tech related. Irrespective of the industry, most of them fail.
The question is,
why do 90% of startups fail to pull through?
Many have been convinced to believe that a startup is a young company that has developed a unique business idea, aims to make an instant impact, and take over the market.
StartupMyth – 1
This is a serious myth.
I think founders believe this misconception due to the fact that startup successes are generally modeled after unicorn stars like Mark Zukerburg, Larry Page, Elon Musk, Jack Ma, and so on.
However, we fail to uncover the main reason behind their success which lies in their business model, product positioning, and customer experience and not actually the uniqueness of their idea.
Facebook was not the first social network.
It was a clone of HouseSYSTEM and myspace.
Google was not the first search engine. Google did not invent search monetization. Overture did.
Zynga did not invent Farmville, Zynga copied the game from Farmtown.
Farmtown was in turn a copy of the Chinese game HappyFarm.
Microsoft Windows was not the first GUI OS. In fact it was technically inferior to its competitors, but won the market share war between IBM and Apple.
This was simply because Microsoft understood what the consumers really wanted more than IBM and Apple.
Takeaway: Consumers want your offering to be unique and your execution to be flawless. Success has nothing to do with your business idea.
Startup Myth – 2
The second common mystery about startups is the “if you build it they will come” controversy.
I call it controversy because it is a Startup myth that slowed me down in my journey as a young entrepreneur, and the statistics speak for themselves.
21.5% of startups fail in the first year,
30% in the second year,
50% in the fifth year, and
70% in their 10th year, (Investopedia 2020).
Many have built startups for years, invested their time, energy and life savings believing that their sponsors will notice their hard work and come for them to no avail.
Most people notice the tremendous success of companies like Yahoo, Google, Facebook. After all, these are just free websites where people flock to.
This gives a false sense of confidence to entrepreneurs who think building a technology and putting it out there is all you need to do to attract the users.
They fail to realize that Google floundered for years before getting noticed.
Facebook was barely popular in Harvard University where it was started – and took several pivots to gain the traction it did.
The point is we only see the tip of the success iceberg.
90% of the hard work, sweat and tears that go into building a startup is not known to the public. It is not talked about in the mainstream media.
Only when you read memories and autobiographies of the founders years later,
you find out the actual journey they had to take to build a successful startup.
In this world, it is not the best product that wins, it is the best known product.
As an entrepreneur and startup founder, the majority of your time needs to be invested in spreading the word about your idea.
Talking to people whom you intend to serve.
Understanding their problems. Their hopes and dreams.
Find out why they will say no to your solution and address those objections.
Takeaway: In this world, it is not the best product that wins, it is the best known product
Startup Myth – 3
You need to raise money first before you start,
This is the most dangerous myth responsible for killing millions of unique business models in the world.
There are millions of young entrepreneurs with delicious ideas like the next Amazon, Facebook, TikTok, cooking in their heads.
Unfortunately, they are out there hustling for investors as the first thing to start implementing.
Most are not even ready to invest a dime in their own business, or their own personal growth; yet they dream of millions from top-tier venture capital firms.
You see, business is all about people.
If you can understand people’s problems and solve them in a meaningful way – then your startup will flourish.
Whether you have investors or not.
The good news is you can actually start implementing
your business model by investing your time.
Talking to people. Getting feedback about your idea.
Refining it. Prototyping it.
If founders stay consistent, they experience their ideas gradually come into the limelight.
In fact I wanted to market my Strategic Advisory services to Fortune 500 executives back in 2017.
But I never had the resources to build an international consulting company, worthy of these global giants.
So, I did what I have done with tens of other successful startups.
I decided to start small before going after the big fish.
I launched a podcast with just $100.
The aim was to help others learn from the success and failure stories of leaders in the field of business while increasing my visibility.
And today, I get to do business with some of the most recognized names on the planet.
C-suite executives of multi-billion dollar companies, champions, celebrities, government officials.
I got the opportunity to sit down with the former director of the CIA, stars of the business show Shark Tank,
The inventor of the wildly popular board game Pictionary, and the list goes on.
Takeaway: The first and best investment you need for your startup is in yourself. Second one is your time invested in understanding your prospects.
You can do something different.
I have a burning desire to uncover similar myths plaguing the startup industry.
I want to help promising entrepreneurs in their exciting journey or starting and growing a business from ideation, validation to execution.
Differentiating what actually works in the startup world – from the antiquated theories taught in the four walls of high-priced business schools.
Revealing the end-to-end strategies and implementation techniques is the reason.
I have decided to launch an online training program called Startup Myth Uncovered aka SMU.