The startup industry is flourishing, with brilliant innovative ideas reaching the market and changing the course of the world. When you look back at the origins of huge companies today like Amazon or Facebook, all of them started as a small startup built out of a garage or dorm room. However, it is also important to know that this industry is certainly not an easy one. In fact, 9 out of 10 startups fail. Even though the numbers are scary, it is the ugly truth. To make your startup successful, there are several factors you need to adhere to. One of them is not falling for common startup myths that hinder the growth and success of your startup. You might have created a great team, been smart with funding, validated your idea, have created the perfect business model, and also been a great startup CEO. However, none of these would matter if you fall for common startup myths. Let’s take a look at these.
You need a big round of funding to start or launch
This is one of the most common startup myths revolving around the industry. Founders assume that they can not reach the market without a huge round of investment, hence they end up sitting around waiting for the opportunity to knock on their door. Well, in reality, they should remain true to the spirit of entrepreneurship and create their own opportunity.
Not every startup gets funded, not every idea catches the eyeballs of the investors. But that does not mean that you should abandon your idea. Instead, you should try get your idea off the ground by yourself. Work out creative ways of surviving the cash problems. The time that you spend doing nothing apart from reaching out to investors, should be utilized in working on the idea.
TechCrunch is the perfect example of a venture succeeding without major funding. TechCrunch became one of the most-read tech websites in the world. When AOL purchased it in 2010 for ~ $30 million, its founder Arrington reportedly owned 85% of his bootstrapped company. Behance is another great example. The company bootstrapped for six years before it raised money through funding.
You can get funded on just an idea
This is one of the most common startup myths you will find founders of startups stuck on. Let’s put this debate to rest once and for all. There is no such thing as getting funded on an idea. Millions of people all over the world have ideas, that does not mean everyone gets funded based on just that. You need idea validation and proof. That means you need traction in the form of revenue and service. Investors do not just invest in an idea. They need to see that there is a market for the idea and that the team behind it can actually sell their vision.
Read: Creating a Startup Team
If you are starting a startup, do not assume you will get funded just because you have a brilliant idea. You will need to prove that the idea is actually worth something. If you keep slacking off waiting for the capital to trickle in for you to begin working, then you might as well be waiting for the rest of your life.
So what should you do? You should self-fund your startup. Bootstrap, ask friends and family for loans, and use any other means necessary. But do create your Minimum Viable Product (MVP) through self-finance and try to gain some solid traction.
Incubation is necessary for a startup to be successful
This is one of the most thrown around assumptions when it comes to startups. Founders find what incubators have to offer very lucratively. Hence, they spend their time daydreaming and applying to incubators and accelerators. In the case that they do not get accepted, they lose hope and give up on their startup.
It is true that incubation offers you the resources, networks, guidance, and mentorship that people see as a shortcut to success. However, if you are smart and know your idea well, you can do better by not getting incubated. In fact, most founders are more successful on their own as they invest all of their time into the startup, and not on training programs, workshops, and various people. Above all, by not getting incubated, they avoid giving away valuable equity. So you should really re-evaluate your standing, and try to grow on your own.
The idea should be 100% unique
People have this idea built in that they can only succeed if they have an innovative completely new and original idea. They believe that the first-mover advantage is absolutely necessary for a startup to be successful. They think it is impossible to work on an existing concept and competing against big companies. Well, nothing could be further from the truth.
You do not need to be the first mover, or have an idea that is completely unique and new for the industry. A groundbreaking idea does not define a successful startup, nor would it determine your breakthrough. If you are working on an existing idea or concept, you can very well be successful. However, you do need to stand out. There should be some core differentiator or addition of value in some way that persuades the market to go for you. Analyze your competitors and see what they are doing wrong. Or what problems you see in their product. Then use that knowledge to do better with yours.
Slidebean is a perfect example of this. Caya, the founder realized that existing presentation design platforms were difficult and boring to use. So he came up with Slidebean, an easier, faster, and cooler AI-powered presentation design platform. The company is competing against the likes of Microsoft PowerPoint and Google Slides. They have a much better product, a significant customer base, and are profitable as well.
Another great example is Facebook. Before Mark Zuckerberg launched Facebook, MySpace and Orkut were already around as social networks. However, Facebook became immensely successful, and now is the most popular social network and website. What these examples reflect is that you do not need to be the first player in the market, you need to be the best player. Even if your idea is not original, if you innovate and add value to the existing concept, you have a great chance of being the market leader.
You don’t need a company culture in the start
Founders usually ignore the importance of company culture in the start, assuming that it is a huge waste of time since the team is small. However, that is one of the gravest startup mistakes ever. Defining a startup culture right at the beginning is very important. It helps every align with the vision of the company, and the code of the company laid down. It also helps to work professionally and follow the company culture as the team expands. You do not have to spend an eternity defining and explaining culture. Just a basic understanding and earliest implementation would be sufficient.
Not sharing your idea with people due to fear it might get stolen
Are you one of those startup founders and entrepreneurs that has people sign Non-Disclosure Agreements (NDAs) before they hear your idea? Well, this is for you specifically then. Founders these days fear that someone might hear or figure out their idea, hence they avoid discussing it and keep it in secrecy. For me, this is a big mistake. Why? Well for two reasons.
Firstly, you need to understand that is easier talking about an idea than building it. What that means is that it is not that easy to steal an idea. There is a lot that goes into getting an idea to work and up from the ground. You need to put in countless hours everyday for months or even years perhaps. There is a lot of behind scenes going on, things you only realize and understand through experience.
Secondly, by not discussing your idea you are missing out on valuable feedback. Before you get your idea ready, you need validation and idea proof. You need to be sure there is actually a market to what you are building. It is stupid to create something based on a whim. Therefore, you need to share your idea with people around and gain feedback and insights. You need to see if your audience is willing to accept and buy what you are selling. If you do not do this, you are most likely to fail.
You should be dedicating all of your time to your startup
Working hard, putting in all the hours, and being all about the hustle is great and resonates with the entrepreneurial spirit. However, following a misguided notion that the more time you put in your work the better it will be is absolutely wrong. This is one of the most important startup myths to address and avoid.
Entrepreneur burnout is actually real, and in order to be successful, you need to prevent it from happening. This is because it not only puts your health and well-being at risk but also the company as well. If you are not mentally and physically well, you are only jeopardizing yourself and the business, and putting everything at stake. You can not make smart decisions and function properly if you do not ease down and take care of yourself. Not only should you avoid burnout for yourself, but also for the team.
The startup industry is a really tough one to survive in. You need to make sure that startup myths like the ones mentioned above are not holding you back. You need to define your own paradigm and not let imaginary boundaries dictate you. Be critical and creative with your thinking.
Have you ever been held back by any of these startup myths? Did you embrace it or did you see past it? Did this article provide some clarity? Share your valuable thoughts by commenting below. PACE Business would love to hear from you!