Entrepreneur

Exposing the Prime Three Myths About Profitable Startups

Why success would not rely on what you are promoting concept, the standard of your product or your startup capital.


5 min learn

Opinions expressed by Entrepreneur contributors are their very own.


The idea of “startup” has grown so massive that its very essence has been mystified by trade norms, tales and the media. About 472 million entrepreneurs and 305 million startups are created every year. Of these startups, 1.3 million are tech-related. Regardless of the trade, most of them fail. Why do 90 % of startups fail to tug by means of? Listed here are the highest three startup myths revealed:  

Fable #1: Startups want a novel concept to succeed 

Many assume {that a} startup is a younger firm that has developed a novel enterprise concept, goals to make a right away influence, and takes over the market. This can be a severe fantasy. Many imagine this false impression as a result of startup successes are typically modeled after unicorn stars like Mark Zuckerburg, Larry Web page, Elon Musk, Jack Ma, and so forth. 

Nevertheless, this fails to uncover the primary purpose behind their success which lies of their enterprise mannequin, product positioning, and buyer expertise, and never truly the individuality of their concept. Fb was not the primary social community. It was a clone of houseSYSTEM and Myspace. Google was not the primary search engine. Google didn’t invent search monetization; Overture did. Zynga didn’t invent Farmville; Zynga copied the sport from Farmtown. Farmtown was, in flip, a replica of the Chinese language sport HappyFarm. Microsoft Home windows was not the primary GUI OS. The truth is, it was technically inferior to its rivals however gained the market share warfare between IBM and Apple. This was just because Microsoft understood what the customers actually needed greater than IBM and Apple. 

Takeaway: Customers need your providing to be distinctive and your execution to be flawless. Success has nothing to do with what you are promoting concept.

Associated: 3 Highly effective Pillars of Entrepreneurial Success

Fable #2: For those who construct it, they’ll come 

The second frequent thriller about startups is the “if you happen to construct it, they’ll come” controversy. I name it controversy as a result of it’s a fantasy that slowed me down in my journey as a younger entrepreneur, and the statistics converse for themselves. Analysis asserts that 21.5 % of startups fail within the first yr, 30 % within the second yr, 50 % within the fifth yr, and 70 % of their tenth yr. Many have constructed startups for years, invested their time, power and life financial savings, believing that their sponsors will discover their arduous work and are available for them to no avail. Most individuals discover the super success of corporations like Yahoo, Google and Fb. In any case, these are simply free web sites that folks flock to. This provides a false sense of confidence to entrepreneurs who suppose constructing know-how and placing it out there’s all you have to do to draw customers. They fail to comprehend that Google floundered for years earlier than getting observed. Fb was barely common at Harvard College, the place it was began — and took a number of pivots to realize the traction it did. The purpose is we solely see the tip of the success iceberg. 

Ninety % of the work that goes into constructing a startup shouldn’t be recognized to the general public. It’s not talked about within the media. Solely while you learn reminiscences and autobiographies of the founders years later — you discover out the precise journey they needed to take to construct a profitable startup. On this world, it’s not the most effective product that wins — it’s the best-known product. As an entrepreneur and startup founder, most of your time must be invested in spreading the phrase about your concept. Speaking to folks whom you plan to serve, understanding their issues, their hopes and desires. Discover out why they’ll say no to your answer and tackle these objections. 

Takeaway: On this world, it’s not the most effective product that wins — it’s the best-known product.

Associated: If You Construct It, They Will Not Come 

Fable #3: It’s essential increase cash first earlier than you begin 

That is the parable that’s liable for killing thousands and thousands of distinctive enterprise fashions every year. Tens of millions of younger entrepreneurs have scrumptious concepts like the following Amazon, Fb or TikTok cooking of their heads. Sadly, they’re on the market hustling for buyers as the very first thing to start out implementing. Most aren’t even prepared to speculate a dime in their very own enterprise or their very own private development, but they dream of thousands and thousands from top-tier enterprise capital companies. 

Enterprise is all about folks. For those who can perceive folks’s issues and remedy them in a significant manner — then your startup will flourish. Whether or not you could have buyers or not. The excellent news is you may truly begin implementing what you are promoting mannequin by investing your time. Speaking to folks. Getting suggestions about your concept. Refining it. Prototyping it. If founders keep constant, they expertise their concepts progressively come into the limelight. For instance, in 2017, Manuj Aggarwal needed to market his Strategic Advisory providers to Fortune 500 executives. However he by no means had the sources to construct a world consulting firm worthy of those international giants. So, he launched a podcast with simply $100, and right this moment, he will get to do enterprise with among the most acknowledged names on the planet. 

Takeaway: The primary and finest funding you want on your startup is in your self. The second is your time invested in understanding your prospects. 

Associated: Ought to You Pitch Your Startup to Early-Stage Buyers?

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