Starting a business is hard enough without falling prey to these common misconceptions and myths of entrepreneurship. It’s important to take a look at these beliefs — or any others that are holding you back.
What do believe is true about you, or about what it takes to start a profitable business? Shine that interrogation light on those areas of your brain where you’ve got a fixed mindset about what you can or can’t do. And, if you need a little help…
Here’s our list of the 11 most common misconceptions + myths of entrepreneurship:
Myth #1: You need an MBA to start a business
Let’s start with one of the easiest myths of entrepreneurship to refute — the myth that successful founders have MBAs.
Mark Zuckerberg (Facebook). Jack Dorsey (Twitter). James Park (Fitbit). Steve Jobs (Apple). Daniel Ek (Spotify). Jan Koum (WhatsApp). None of them even completed undergraduate degrees. And I could go on…
And it’s not just geeky coders that do well.
John Mackey (Whole Foods). Richard Branson (Virgin). Sophia Amoruso (Nasty Gal). Debbi Fields (Mrs. Fields). Sara Blakely (Spanx). Among countless other artists, chefs, musicians, and fashion designers.
At the speed the world moves these days, it’s possible that a university curriculum can’t stay up-to-date fast enough. When things like Masterclass and Skillshare and now Foundryy exist, it’s no wonder more people are starting businesses now.
Myth #2: It’s too late or you’re too old to start a business
I get it. I mean this is basically me the moment I realized being a millennial no longer meant being young.
And when you’re reading about those “inspiring” stories of entrepreneurs (like the ones mentioned above) who dropped out of college to start their grand business ventures at the age of 22, it can be easy to feel like you’ve missed your chance. You haven’t.
It’s true you may have kids, you may have a mortgage, and you may have more responsibilities than those fearless young startup founders. But you also have something critical that they don’t… experience.
So don’t throw in the metaphorical towel before you’ve even begun. Take heart in knowing that the average age of a “successful” business founder Is 45. (If you need more help rewriting this self-defeating script, I recommend reading the full article in HBR “debunking the myth of young entrepreneurship”.)
Myth #3: Starting a business means you’ll have absolute freedom
If you’re anything like me, you long to feel more freedom in your days. After all, the top reason to start a small business is often the “freedom” of being your own boss. But… this feeling of freedom isn’t guaranteed. You need to intentionally design your business in a way that feels freeing to YOU.
For example, if you’re starting a business as a freelancer (which is often the fastest-path-to-cash scenario), you’ll probably experience times when you feel like you’ve traded one boss in for many.
And, those tales of startup founders putting in 60+ hours of work a week for YEARS to gain traction? That kind of intensive work schedule doesn’t sound very freeing to me. But it might be a dream to you.
That’s why it’s absolutely essential to clarify the vision you have for your business (and your role in it) BEFORE you start. Otherwise, you could end up feeling trapped, hustling for a half-dozen new bosses every month and putting in overtime (without earning overtime rates).
We call this step the “Self Circle of Validation” because it starts with validating if your business idea is right for you. Want to learn the other 2 circles of business idea validation? Join our free workshop.
Myth #4: Entrepreneurs are mavericks and risk-takers (and they’re just born that way)
It’s easy to see why this is one of the common myths of entrepreneurship. I mean the quintessential entrepreneur, Richard Branson, flew to the edge of space in his own spaceship.
And let us not forget the iconic Apple commercial, Think Different, where Steve Jobs famously said:
Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things…
So what does that mean for the rest of us?
It’s true that not everyone can ONLY be an entrepreneur (because we also need people to be nurses and postal workers and park rangers). But in some countries, starting your own business, is the only way to provide for your family. And here in the US, it’s certainly an option for almost anyone.
Technology has opened up possibilities for monetizing hobbies and moonlighting with freelance projects. Some people actually make a full time income from just having a podcast or a YouTube channel.
So, while it does require you to have a unique perspective and solution to a problem, it doesn’t necessarily require big risks. You can literally start a business with your iPhone these days. And if the first try doesn’t work… learn from it and iterate or pivot.
Myth #5: The common phrase, “fail fast, fail often”
This is less about being a myth of entrepreneurship and more about being a misunderstanding. According to Forbes, this common phrase originated among Silicon Valley startups but is most-often misunderstood. Because the idea isn’t really about failure, it’s about iterating.
“To succeed, we must be open to failure, sure, but the intention is to ensure we are learning from our mistakes as we tweak, reset, and then redo if necessary.”
So, while it’s a great mantra if the fear of failure is holding you back from even trying, it’s not a great motto to run your business by. After all, if you’re constantly running toward “failing fast and often”, you’re not exactly running toward success.
Myth #6: The business advice to “solve your own problem”
If you’ve done a bit of research into starting a business, you might have noticed this common advice for how to come up with a product… “solve your own problem”. My issue with this isn’t so much the advice itself as the misunderstanding of this advice to mean… “solve my own problem without doing any research to find out if other people have this problem too”.
Psychologist call it the “ false consensus effect” — when we assume our experiences or beliefs are relatively common in the general population.
And the antidote to this incredibly common cognitive bias? VALIDATION.
It’s a simple solve. Validate your product idea before you invest too much time and money into creating it. (And hey, we’re hosting a free workshop for that).
Myth #7: Your business needs to be popular to be successful
Wrong-o! The most successful companies are ones you’ve probably never heard of and would consider to be quite boring.
Synnex (IT systems). Raytheon (aerospace stuff). AmerisourceBergen (big pharma). TIAA (financial things). Amgen (“human therapeutics”, whatever that is), Protolabs (3D printing).
The point is, companies that sell to giant enterprises aren’t usually on our normal-person radar but they’re often the most profitable. But that doesn’t mean if you want to start a business in finance that you need to target giant corporations.
As long as your business solves a problem and your target market is willing to pay you to have that problem solved, you’re good to go. No flash or hype or viral TikTok videos needed.
PS: This is exactly the kind of stuff we’ll walk you through in our free validation workshop. Just sayin.
Myth #8: You have to raise money from Venture Capitalists
Sure, we’ve all watched Shark Tank at some point and thought, “If I’m serious about starting a business, I’m going to have to pitch to a bunch of VC sharks to get funding”. (Or maybe that’s just me.)
This is a VERY common myth of entrepreneurship. But the truth is…
You have MANY OPTIONS for how to fund your business:
- personal savings (aka “bootstrapping”)
- loans from friends or family
- bank loans
- grants
- crowdfunding
- angel investors
The other thing is: you don’t necessarily need a lot of money to start (in fact just forming an LLC may be the biggest expense you have in your first year). Take a look at this infographic to see how much money some common brands had to start with:
Myth #9: You need a revolutionary new idea
Think you need to be first-to-market or have a totally unique idea? Think again!
I’d rather have a first-rate execution and second-rate strategy any time than a brilliant idea and mediocre management.
- Jamie Dimon, President and CEO of JPMorgan Chase
Let’s take a fairly modern example: Casper mattresses.
Obviously Casper was NOT the first company to create and manufacture a mattress. But they were unique in their business model — shipping direct to consumer. Even so, that hasn’t stopped at least a dozen competitors from running on the EXACT SAME business model. Companies like Nectar, Purple, Helix, Avocado (and more) emulated Casper.
The truth: it’s often the second company to market that becomes the star success. Being the first means creating the category and educating the market. It just takes more work.
Myth #10: If your idea is good enough, that’s all you need
While you obviously DO want to have a “good idea” for your business (see our Free Validation Workshop for how to do that), there’s a lot more that goes into a successful business than just the idea.
Alex Turnball, CEO of the customer service software Groove said, “Ideas are the most hugely overvalued currency in the business world.” The reason being we can get very precious with our ideas — afraid of telling anyone because they might steal them. But the thing is, it’s not the idea itself that makes a business a success…
It’s the execution of that idea.
Myth #11: The blanket statistic “90% of small businesses fail”
This, again, is not *exactly* a myth of entrepreneurship but it is misunderstood and misquoted so frequently, that it’s important to shine our interrogation spotlight on this oft-cited belief.
“According to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed.” -Entrepreneur
So where is that 90% number coming from?
That’s the number of startups that “fail” over the course of a DECADE.
Other things to consider:
- This data is not taking into account freelancers or solo entrepreneurs. The Small Business Administration (SBA) considers a business a “startup” when it hires at least one employee.
- A small business probably isn’t as small as you think. Just how small does a business have to be to count as a “small business”? According to the SBA, “[it] varies by industry, but a small business is one that has fewer than 1,500 employees and a maximum of $38.5 million in average annual receipts…” So, we’re not just talking mom-and-pop shops here.
Now that you know the myths of entrepreneurship, what’s the next step?
Entrepreneurship can be fulfilling and empowering. But it can also be completely draining — pounding the virtual pavement every day in search of potential clients, learning about Instagram marketing, Facebook ads, funnels and generally just trying all the marketing strategies in hopes of attracting customers.
Let’s not make it harder on ourselves by believing these myths of entrepreneurship. Instead, let’s adopt the mindset of an entrepreneur. Get clear on YOUR goals for your business, get to know your target market, and understand the problem you can solve for them.
One of the most common reasons why startups fail is, “no market need”. And this is something you can (and should) solve for BEFORE you invest in a business path. It’s so critical that we’re hosting an entirely free workshop all about how to validate your idea.
Originally published at https://www.foundryy.com.
