1.) Being of the opinion that income is an option
It is a common theme in the tech startup industry. However, it certainly pops everywhere else too. There’s a mythology which is mostly perpetuated from people in Silicon Valley VC set, that startups are an innovative and fashionable concept which’s basic model is to “raise plenty of funds to acquire as many customers as you can, and determine how to profit from them or sell them to anyone who is able to”.
It’s a tempting idea as it is an excellent option for the founder because it takes away the stress of having to think about sales, revenue and all the other nastier things. It’s a great feeling, obviously, as it lets the founder remain in their own space and revel in the joy of creating the perfect product without relying on sales to make it happen. It really delays the moment when the business has to deal with criticism and rejection from prospective customers.
This is a strategy that taps into our fears of failure and rejection and offers a promising alternative to these fears that can be wholly quelled. It’s such an intense fear that for many, the world has a fervent, well-known, and complex mythology that has been created around this kind of “business model” that has only the aim of proving the notion that we wish to believe is real. It’s not true. Startups are businesses and, sooner or later, they will need to earn profits. Entrepreneurs who realize this and come up with a strategy to make money from the beginning are more likely to be successful.
2.) underestimating the importance of cash flow
I discovered this by accident in my first business, which was destroyed in a flash because of a cash shortage. The speed at which cash went out was higher than I had anticipated; however, the rate at which the remainder of the business dissolved due to being short of money was shocking. Fortunately, I was just 24 and was able to recover relatively quickly; however, I can see this mistake repeatedly repeated with new companies.
What causes this? Similar to the first aspect, it’s primarily avoidance-based psychology. The prospect of running out of cash is a trigger for the primal fear of failure, and people go to extreme lengths to avoid having to face the possibility of meeting it. The lack of experience is often an issue in the spending of too much money on things that aren’t essential like extensive, luxurious office equipment and offices, bringing on excessively many employees too fast as well as failing to bargain for better prices on expenses and many other missteps. The lack of data is also a problem because crucial cash flow expenses like taxes expenses, insurance and travel are usually under-estimated or are not included in the first estimates.
The whole process can be avoided by doing some careful planning and research prior to when you begin. Entrepreneurs who invest the time to do that (often tedious) foundational work will stand a higher chance of being successful.
3.) Be focused on the sexy parts
The path to success in the business world is a lot of work. Everyone is aware of that. What separates the most successful entrepreneurs from others is their capability and their ability to perform the monotonous, repetitive work that propels an organization forward, day in and day out. That is, they push through the grind instead of focusing on the glamorous and attractive work.
The issue is that it’s straightforward to become busy when you’re a founder because there are a lot of tasks to complete at any given time. Human beings naturally prefer things we like at first and leave the dull, tedious work for later. In the end, the majority of founders who commit the crime of not focusing on the hard work may not even realize it until they are irritated when things go wrong.
In my discussion of grind work, I’m not specifically talking about admin that can be quickly done in an automated manner or outsourcing it to a variety of cost-effective ways currently – but rather tasks like analysing your customer behaviours every single day, searching through the various social networks daily to increase your momentum as well as writing blog posts that no one seems to be interested in, chatting with tax experts about credits for R&D or filing forms for trademarks and patents as well as constructing and testing sales and marketing automation, as well as other tasks that drain the energy of work involved in establishing the business’s initial momentum. These are all tasks that entrepreneurs must be willing to take on themselves initially and be aware that the payoff is much more into the future. Many founders make the error of thinking that they’re superior to this type of work at the start and are almost always mistaken.
4.) Not giving up easily
This is an important issue; however, I’ve seen it frequently cause people to fall behind (myself included in my previous ventures). At specific points, the challenges of starting a business beginning from scratch will be overwhelming, and a severe issue can cause the founder to fall over the point where they want to give up. I call this the wall, with reference to the wall runners, face when their bodies start screaming for them to quit.
It is usually a crucial moment in the growth of a company. Similar to the marathon, an individual’s ability to get past the wall is a significant impact on their chances of completing the race, and so is business. However, this is the main element of running any type of business. The capacity and determination to face difficult situations are one of the core qualities of a successful entrepreneur, and the fight should be the primary factor that propels their success. Entrepreneurs who are willing to accept, anticipate and confront challenges head-on will be among the few standing when the other 90 per cent have gone.
The 90% figure is correct. However, it’s also an oversimplification of the situation. Business success isn’t an unpredictability game; it’s a fight of will in which people who have the best chance of being really resilient and logical people thrive. Entrepreneurs who possess or are prepared to create these qualities are most likely to have the highest chance of getting into the top 10 percentile if they don’t or don’t get the opportunity to be identified soon enough.