Published on September 15th, 2019 | by Bibhuranjan0
The Hidden Truth about Startup and Entrepreneurship
More and more people are leaving their 9-5 jobs to embark on their own entrepreneurial journey. But the path to success is not (and will never be) an easy one. If you’re 100% committed to founding your own startup, there are some important facts you should know.
Many people jump into business thinking that they are ready for it. But here’s the thing: 90% of startups fail. Okay, don’t think that this article is created to discourage you. Success is possible. And your company could be one of the 10% of startups that will make it big.
However, you should be prepared for a bumpy road ahead.
Below are six truths about startup and entrepreneurship that should be your guiding principle in building a successful startup:
Funding is crucial to keep going
Aside from scaling up too early, another major reason why as much as 90% of startups fail is that they lack enough funding. Currently, 82% of startups are self-funded while 41% rely on small business funding, particularly loans and lines of credit. Meanwhile, 24% get funding from their friends and family, and only 3% and 1% get it from crowdfunding and venture capital, respectively.
Whatever approach you use to collect funds, getting people to invest in your startup can be a massive undertaking. Consider these tips before you present your pitch to potential investors:
- Explain your business model. Investors don’t put their money on your company for nothing. They need to see how their money will grow. It’s a trade of their money for your time.
- Know your audience. Take time to find out who you will be pitching to ahead of the meeting and research about them. Know what appeals to them most and how your business idea is relevant to them.
- Have a detailed record of your business. Investors need to be sure that they are dealing with a serious business.
- Ask for help. Because if you don’t, you won’t get any. Money won’t come knocking on your door. It takes time and hard work to find the right investors.
There is no shortcut to business success
If you really want to succeed in your business, you have to take it slowly but surely.
According to research, the reason why the majority of startups fail is that they scale up too early. When you’re scaling, getting the fund you need, and growing, it’s easy to think that you’re on the right track. But unless your product or service translates into revenues, you should first focus on these three things:
Successful startups know who their customers are and what specific problems their products or services address. The first phase of establishing a business involves finding a problem that is big enough and finding enough people who constantly deal with such a problem.
The next phase that you should focus on is creating an in-demand product for a market that is large enough for your startup to grow. This means that even if you have a brilliant tech product in mind, if it only serves a few hundreds of people, you could be wasting time, effort, and money on it. Additionally, you need to know whether your target market is willing to pay for your product or service. This phase involves developing the product, testing its core features, and gathering feedback to create a product version that your target customers are willing to pay for.
Conversion & Profit
The third phase of building a successful startup is optimizing your conversion funnel and finding ways to retain your customers. It involves lowering acquisition costs and increasing sales to drive revenues.
The key is to never stop learning
The next truth about startup and entrepreneurship is that no matter what path you take, you must never stop learning. Research shows that successful entrepreneurs and founders tend to be middle-aged and well-educated. As much as 75% of successful entrepreneurs belonged to the top 30% of their high school class.
Some of the most successful entrepreneurs such as Steve Jobs, Mark Zuckerberg, and Bill Gates have shown you that you don’t need a diploma to thrive in business. But they are the well-known outliers in the ocean of college-educated founders. Statistics show that more than 90% of American tech founders hold a bachelor’s degree, and those who hold an MBA diploma are able to start and build their company faster.
Even for those who think that college education is not necessary for successful entrepreneurship, alternative programs are still worth considering. Through these programs, you can master a skill and have access to resources. At the same time, you get to network with like-minded individuals and passionate people of various backgrounds, learn practical skills that reduce the learning curve for running your company, and master leadership skills that are critical to your success.
Your location matters
Silicon Valley is known for being the best place to put up a technology or information business. But it’s not the only one. New founders should consider Duke for several reasons. One is that it has three major universities. Two, the city boasts of a rich, long technology heritage. Its commitment to information and technology has spanned for 50 years. IBM, SaS, and Red Hat are some of the recognizable companies that are headquartered in Duke.
Another reason for choosing Duke is the high quality of life. It is, in fact, the highest in the country. The area produces a high number of highly educated graduates each year, which makes it one of the best places where you can find an amazing pool of talents.
Prsistence is the key
Being a startup founder is not a lucrative career, at least in the first few years of the business. An average founder earns only about $50,000 a year while working 66 hours per week. Yes, that’s a considerably a long work duration as compared to a regular employee who spends 47 hours a week.
There is no magic bullet to entrepreneurial success. But some of the greatest entrepreneurs of all time have one thing in common – they are persistent. They don’t get discouraged with failures, no matter how big or small. Take it from Jack Ma, Alibaba Founder who was declined by Harvard University for 10 times.
Other important tips to succeed in business:
- Believe in yourself. Henry Ford’s famous line goes “whether you think you can, or think you can’t, you’re right.”
- Focus on things you care about. Facebook founder, Mark Zuckerberg says that entrepreneurship is all about translating your passion into a business.
- Build a good team. As a startup, a major factor for your success lies in your team. You’ve got to have a solid team comprised of highly skilled and qualified people who share the same vision as yours. Bill Gates, Founder of Microsoft, said that teams should be able to act with the same unity of purpose and focus as a well-motivated individual.
Starting a business is not an easy feat. It takes passion, persistence, perseverance, and great belief in yourself and your business model to succeed. Then there is the matter of finance, because most startups rely on small business funding to get going. As an entrepreneur, you must also have a drive for continuous learning.
While a bachelor’s degree doesn’t guarantee that you will succeed in your entrepreneurial journey, the majority of successful entrepreneurs have shown that it can be your best weapon. Funding is a major factor as well. Nearly half of startups fail because they ran out of cash. It’s good to know that there are several ways to get funding.
However, you should know how to win the approval of potential investors. Lastly, it takes a great deal of positive attitude and belief in yourself to thrive in your business. Knowing your purpose and what you are most passionate about should guide you in deciding your business model.