Entrepreneurship Thrives on Mythology
Karl R. LaPan, President and CEO of The NIIC
No doubt, Shark Tank and reality TV have over-sensationalized entrepreneurship. Call them myths, misconceptions, half truths and lies. Entrepreneurs of all stripes hear their share of misinformation when it comes to their pursuits. During Global Entrepreneurship Week, let’s ponder a few of the most common ones:
1. Being an entrepreneur is glamorous
Too many people want the glamour of being their own boss, but not the work that comes with it. Being an entrepreneur goes beyond the 9-5. And when you’re not working, you’re thinking about your business. In short, you’re always “on”—and that means lots of sacrifice. It takes blood, sweat and tears and a little luck to navigate the choppy waters of starting a company.
2. Do what you love and the rest will follow
Just because you love doing something doesn’t mean a successful business is the natural outcome and you will be in the money. In fact, often times, an entrepreneur’s passion becomes a liability because instead of running their business, they just focus on delivering the service they personally enjoy and overlook other factors that drive growth, scaling and profitability. It takes a lot more than a product or innovative business model to create a successful company. At the Northeast Indiana Innovation Center, we promote the entrepreneurial “grit” model of: Passion + Perseverance + Push.
3. Bigger is better
Green entrepreneurs sometimes think greater volume is the answer to profitability. This is not always the case. If you’re losing money on your widget when selling 5,000 of them, think how much you will lose when you sell 5,000 of them. Adopting the marketing philosophy of making it top in volume is a sure recipe for failure. Just because you can scale doesn’t mean you should. Remember, less than .7% of all small business establishments really scale. It is no wonder over 50% of all Founders are gone from their company by the Series C funding round. Know what you really want as a Founder and put yourself in the driver seat. Raising a lot of capital may sound cool or sexy, but remember the end result is you have more bosses!
4. Entrepreneurship is designed only for the “snowflakes”
We hear stories all the time of Silicon Valley founders who dropped out of college to take a chance on a big idea. While this works for some, the reality is that it takes technical skills, life and work experience and a large network—among many thing—to make it. This is why the peak age for an entrepreneur today is 40 years old. Unfortunately, millennials have the lowest start-up venture formation rates and highest failure rates. In contrast, a seasoned professional who has done the leg work to identify a market opportunity may have a home advantage. Plus, with age often comes access to a broader financial capital (cash in your 401K, take a home equity, use your annual bonus, potential angel investors) and network required to take calculated risks, recruit and select talent, and get the business off the ground.
5. You must be an industry insider
So, you want to start a tech company but don’t have a technical background? Being an industry expert is not a pre-requisite for starting a business in the respective niche. You don’t have to be an expert to see and pursue an opportunity. In fact, being “too close” to it can make you blind to shortcomings that can set you back. However, it is invaluable to have industry insights and domain expertise (to mitigate false starts or appreciate market nuances) so having industry expertise on your advisory board, your leadership team or engaging knowledgeable industry consultants is key. Successful Founders see around the corners, their innovations are at the edges of their marketplace opportunities, and they relentlessly pursue the question, “is there a better way”?