Most Common Entrepreneurial Myths

I've been at Team and a Dream for a little over a year now and I've been having a lot of fun working with early stage Internet companies. While involved with these entrepreneurs in their various projects, I've sensed a pattern of classic mistakes they seem to slip into from time to time. I've outlined the top twelve pitfalls I've encountered below:

• "I want to offer it all"

  Focusing is an important aspect of any start up. It allows you to establish credibility and expertise in the product or service you are offering. As Skip likes to say, "When you're all things to everyone, you're nothing to anyone."

  It seems counter-intuitive, but it also reduces costs and enables you to be more efficient. Allow yourself to be the best at what you do.

• "If I build it, they will come"
  

  Launching your site doesn't guarantee success. Let me repeat that -€“ launching your site doesn't guarantee success. Why the emphasis? A lot of entrepreneurs believe if they put something up, that's it. They've done the hard work. In actuality, that's not the case at all. There have been a few exceptions (such as Google) but it's obviously not something you can count on. Your site, including its content, needs to be designed around your users and their needs. Selling widgets doesn't mean much if no one wants to buy them.

  Another important aspect is to be different and unique. Don't look like every other site - it's boring! Also make sure you notify the search engines because your site is not going to market itself. No one will visit  your site if they don't know you exist or if they can't find you.

• "I don't have any competition"
  

  I was recently surprised when a client of ours with an extensive business background said this to me. There is always competition - whether direct or indirect. This particular client had a couple direct competitors and more indirect competitors. What was nice was they were mostly bad competitors which is your best-case scenario. It'll make it easier for you to outshine them and obtain more market share.
  
  If you honestly believe there is no competition to what you're doing - it's because there is no market for your product or service.
  
  Sharing your idea is a possible approach that can help you identify some competitors you weren't aware of. Validate your assumption further with a Google search or by conducting a market and competitive analysis.

• "I shouldn't share my ideas (because it'll be stolen)"
  

  This is something I personally struggled with a lot. I used to be extremely hesitant in sharing my ideas because I was afraid they might be stolen or they'll be told to someone else that would. I've gradually learned that I really have more to gain by sharing them. I can find potential partners, potential vendors, potential advisors, possible competitors – and I can get tremendous feedback to make my idea better. After all, two heads are better than one. Three heads are better than two, and so on...
  
  If you're still not convinced, it's much hard to execute on an idea than it is to hear it. If it's possible, get a patent to protect yourself. If you really think about it, it's actually a good thing if someone "steals" your idea because it validates it. The next step (what you really need to worry about) is preparing yourself for the competition. If it's that good and has the potential for profitabiliy, everyone is going to want to get into the pool as well. 

• "My idea has to be original (to be successful)"
  

  This is something else that I used to believe for a long time. I wanted to launch an online service that no one else has started, a service that was based on a completely original concept.

  Is that really feasible anymore? When I used to share my thoughts about this everyone would say "there are no more original ideas." A classic example is Microsoft - what original ideas have they come up with? Exactly, none!

• "I only need to get 5% of the market"
  

  This statement generally means you haven't done your homework. It also the last thing you want to say when you're meeting with an investor. Getting a percentage of any market is difficult, and you're better off focusing on the methods and approaches you're planning to acquire the market.
  

• "I have a $50 billion market"
  

  You do? How are you going to validate this? What are your methods of reaching this market? That's what needs to be emphasized – not the numbers you found.

• "My site has to be perfect before I launch"
  

  This is something that so many of our clients have uttered that Skip wrote a blog post about it back in November. (See "To Launch or Not to Launch?") To summarize, you can launch anything - a blog, website, forum - and let the market provide you with what to do next. Validation for your product/service should come from your users. In turn, this will ensure more success. Afterall, they're purchasing your product/service. Again, the key is to be agile. Make sure you're able to adjust and change plans if necessary depending on what your users say.

  What are they resonating with? What are they asking for?

• "I can do it by myself"
  

  From my experience, these are the kind of people that have the "build it and they will come" mentality. They know it all – or at least they think they do.

        "No, I don't need to conduct a focus group. I know this will work."

  "Hire a consultant? Why? I don't need any help."

  I feel sorry for these types of people. They will spend 12 to 18 hours a day doing everything themselves.

  There are immense benefits on getting someone else involved. Not only does it cut back on the number of hours of work, but it also results in better ideas, it prevents burn-outs and mistakes, it allows you to launch your site sooner, etc.

• "We made sure our projections were conservative"
  

  The basic rule in creating financial projections is to overestimate expenses and underestimate revenues. 

  Despite the rule, every business plan I've seen DOESN'T include conservative projections – even if they say they do. I highly doubt these numbers are ever achieved. At the same time, it's hard to determine these numbers because you don't really know what they will be until you start selling your product/service. You're left to play the guessing game.

  Prove you know your market - one alternative is to talk to a financial advisor that can help you develop more realistic projections. There have also been some samples of online financial models floating around. The most popular one I've seen is "Financial Models for Underachievers: Two Years of the Real Numbers of a Startup."

• "Being the first mover guarantees we will succeed"
  

  I love it when I work with these kind of companies. They're exciting and eager to set a precedent in their industry. While being the first mover has it's advantages - e.g., you can build economies of scale and set the standard for customer expectations – it doesn't mean you're guaranteed success.

  Some people advocate you're better off building a second version of a better mousetrap. As A. Gary Shilling states in this Forbes article, "Microsoft has a history of succeeding by not being first. Digital Research developed the first desktop operating system, called CP/M. But Bill Gates upstaged it in the competition to supply an operating system for ibm's pc. Gates didn't even develop the original DOS; he bought the program from Seattle Computer Works for $50,000."

  Remember, being first also means being the first one to make mistakes.

• "My site will be ready in 2 months"
  

  I've seen a few sites that add counting widgets to their site announcing when they will launch. Don't do that! Your developer may promise that you'll be ready to launch in 2 months, but guess what? You probably won't! There is always one problem or another that comes up and it always takes longer to launch than expected.

  I highly advocate not setting expectations that you're not fully in control of -€“ it diminishes your credibility and it turns users off.

I hope you've found these useful! Have you fallen for one of these myths? Are there any others you've encountered that we haven't mentioned?

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By: Yasmine Mustafa

Comments

[Denny K Miu]

I truly enjoy this article. It echoes a lot of my own experience. I like to share with your readers a summary of what I have learned (the hard way) as an entrepreneur. I hope it is of some value. Thanks again for a great post.

Survival Guide for Bootstrapping Entrepreneurs - http://www.startupforless.org

[Akemi - Yes to Me]

This is outstanding! I stumbled.

"I can do it by myself" I hear this all the time. And even when the entrepreneur know the benefits of outsourcing, there is such an emotional wall. It's like the business is their baby and they just can't let others take (partial) care of it. I guess this is one of the reasons why a coach like you and me can be helpful.