Busted or Confirmed? 3 Common Myths About Starting A Business Arielle Kimbarovsky | February 17th, 2016
There are many myths about what it takes to start a business. Time and time again, experts in entrepreneurship and business (often with little to no operating experience of their own) offer formulaic advice on what startups must do to succeed.
The truth is that there is no one way to “correctly” start a company. Startups are the epitome of unpredictability and extremes. For every example of a successful company that proves a myth wrong, there will always be one that will prove it right, especially in today’s world of rapidly expanding technology and connectivity. That is why it is imperative for entrepreneurs to critically examine all advice and “truths” about startups. With countless articles and opinions, it can be hard to decipher who’s right.
Fortunately, many startup myths revolve around three common topics (business plans, money, and unnatural hustle). Many aspiring and even experienced entrepreneurs blindly believe those myths to be true and either take too long to start their business or never feel confident enough to get going. So, in the words of Adam Savage of Mythbusters fame, “let’s blow some stuff up.”
Myth #1: You need a complete, elaborate and detailed business plan from day one.
While simple business plans or outlines may help guide startups towards investors or a general plan of action, detailed business plans often rob startups of precious time. Entrepreneurs fall into the trap of spending months crafting plans that may not actually fit the market by the time they begin building their company. William Bygrave, an entrepreneurship professor at Babson College, cautioned in an article for The Wall Street Journal:
What we really don’t want to do is literally spend a year or more essentially writing a business plan without knowing we have actual customers. Entrepreneurs must be nimble, and will be more apt to stick with a flawed concept they spent months drafting.
Successful entrepreneurs move quickly. Unsuccessful entrepreneurs often fall into a dangerous trap: sticking to a plan that is destined to fail. Bygrave’s ideas echo a 1984 study by George Washington University. In that study, researchers discovered that the most successful entrepreneurs practiced something called “entrepreneurial adaptation”, a set of skills that allow entrepreneurs to adapt easily and quickly to new environments and situations. The researchers found that in return, this ability caused entrepreneurs to disrupt common patterns in daily life, attracted more customers and created more revenue, causing a cycle of nuanced disruption and adaptation. According to the study, entrepreneurs adapted to new situations quickly because they allowed themselves to be flexible with their business ideas. Not one successful entrepreneur bound themselves to a static, detailed plan; they knew that no matter how hard they worked on the plan, they couldn’t possibly account for every possibility.
If you think it’s important to put together a short business plan, Guy Kawasaki, the former chief evangelist of Apple and successful entrepreneur, offers good tips in his post on the Zen of Business Plans.
Myth #2: You need a lot of money to start.
Businesses do require some capital, but this doesn’t mean that every startup has to raise millions of dollars in seed money. Many startups begin from a single entrepreneur or a small team that either invest their own time and money until they can begin to generate revenue, or reach small fundraising goals through friends, family, crowdfunding, incubators, or bootstrapping. Basically, they do what it takes until they make it- regardless of what their bank account says!
Google is a great example of a successful company started with little capital. When Larry and Sergey first began BackRub (which would eventually become Google), they didn’t run to a venture capital firm or angel investor. They didn’t have the ability to crowdfund or go to an incubator either, so they did the only thing they could do in 1996: work out of their garages. It was only in 1998 when Andy Bechtolsheim invested $100,000 in Google, Inc. They had proven themselves before they received an investment.
David Rubenstein, co-founder and CEO of private investment firm The Carlyle Group, agrees that taking a risk pays off in the end. He says, “Persist – don’t take no for an answer. If you’re happy to sit at your desk and not take any risk, you’ll be sitting at your desk for the next 20 years.” He reiterates the idea that the optimal opportunity may not always present itself, but if entrepreneurs stopped after roadblocks such as little funding, companies and products like Google would not exist today.
Myth #3: You must be all about your business, 24/7.
Henry David Thoreau famously said: “It is not enough to be busy. So are the ants. The question is: What are we busy about?”
Unfortunately, many entrepreneurs confuse being busy with hustling. As Ramon Ray, a successful entrepreneur, author and journalist points out, “[a]ll entrepreneurs hustle, but successful entrepreneurs smart hustle.” With everyone from professors to investors on Shark Tank repeating the notion that an entrepreneur must be completely focused on their business each hour of every day, entrepreneurs often find themselves drowning in their business – exhausted and overworked. The reality is that no person can work extremely long hours over a long period of time, while focusing solely on one thing. Doing so results in boredom, sleeplessness, and general irritability that can be detrimental to decision making and productivity. These behaviors easily translate into one dreaded yet popular trend among entrepreneurs: burnout. Elizabeth Isele, co-founder of Washington think tank Senior Entrepreneurship Works says:
Part of small-business burnout is related to the whole search for meaning. I see people who think that because they are following their passion they’ll get everything they want from their business. But work alone cannot possibly deliver on all your expectations in life.
Isele reminds us that we must lead a well rounded life in order to become successful. For those fearing that any time away from a startup could decrease productivity, just think of it as a time to recharge and get inspired from other aspects of life. After all, you never know where your next great idea may come from.
What other myths about starting a business do you believe hold people back?
image credit: Paul Cross