The trend is confirmed: Regardless of the very low startup success rate, budding entrepreneurs are rushing into the world of business like there’s a gold mine in sight.
While it’s true that the opportunities are there, most of startups won’t struck gold at the end.
But why entrepreneurs are still doing it even though the success rate is slim?
Some entrepreneurs I know call it ‘turning my dream into reality, regardless of the outcome.’ Some others call it ‘gaining experience which prepares them for the so-called next big thing.’
The problem with those answers is not their passion for entrepreneurship. It’s their attitude toward starting up.
Failure is the prelude to success, if you fall 9 times get up again 10, I fail my way to success, etc. – are the typical motivational quotes that you may read somewhere on social media. Those are great, and those are powerful when you truly believe and hustle your way to the next level. However, many entrepreneurs I know aren’t really walking the talk. Their action doesn’t match their words.
The thing is, I know some entrepreneurs are starting up not because they want to claw their way to the market and working toward becoming the household name of their niche, but because it’s hip – cooler than cool – today to be an entrepreneur.
Yep, that’s the cold, hard truth.
You see, during my days as a Postgrad student, I researched about entrepreneurship and found some studies that reveal entrepreneurship – or at least self-employed or freelancing – as a ‘backup plan’ when you can’t get a proper job.
Today’s entrepreneurship is hip
Indeed, it’s fascinating how trends shift to the other direction today: Many budding entrepreneurs see jobs don’t offer them much, other than steady paychecks. They want freedom and they get it: With the number of accelerators, incubators and funding clubs available today, it’s easier than ever to start a business without your own money and ‘be your own boss.’
Unfortunately, the facilities and opportunities available today makes some wannapreneurs think that entrepreneurship is easy: Just have a big idea, craft a pitch that rocks, get seed funding, and turn that idea into reality. Then magic happens in Disney-style. Yay.
I’m sorry, but from what I see, more often than not, that’s just a fairy tale.
The truth: Entrepreneurship is HARD
You’re under constant pressure and stress -and if you can’t overcome it, those will break you down. Not only that, the market is way more smarter than decades ago. You can have the fastest growing startup of all, but if you can’t sustain your growth without investors’ money, you’re out. And there’s the art of starting up at the right time – wrong timing will fail your startup, no matter how well you run it or how awesome is the quality of your products/services.
Need some examples?
Quirky, a fascinating startup that I followed years ago, failed because it can’t sustain the operating costs. It lost nearly $200 million.
AdBrite, also my platform of choice years ago, is another example of how a promising Google AdWords’ competitor went cold because either they couldn’t generate enough profits to cover the operating costs or they couldn’t sell the company to potential buyers. The company raised $35 million and lost it all.
You can learn from more examples here.
As you can see, it’s not easy. Those two mentioned above are well-respected startups of their era, yet they still fail. If you see what Uber, Snapchat and other unicorns have become today, it’s because they execute well, and the building blocks seem to fall into the right places. And it’s a rarity. Just ask Elizabeth Holmes and her failed unicorn startup Theranos.
Entrepreneurship is all about mindset
So, coming back to the topic of startup coolness, it’s great that budding entrepreneurs have dreams and turn theirs into reality. In fact, we need more of such passionate group of people. What’s missing is the right mindset to go with all the passion for their startups.
Don’t go to the Alps skiing, buying a Lambo, or purchasing a beachfront property… using investors money. It’s unethical, especially when you fail because of those and say to your investors that “you’ve gained experience. Thank you.”
Don’t procrastinate and feel so successful just because you’ve just secured a $10 million seed funding. Those are not your money. You’re aware of this
Don’t rely on ‘selling to potential buyers’ as your exit strategy. Because if you fail to do so, you’re 100% out.
Don’t start a business because your peers have done it. Peer pressure doesn’t fit well in entrepreneurship.
Don’t grow your way to the sky and forget to actually making money. Remember, cash flow is king.
The list of don’ts can go on and on, but you get the point – remember that you need to keep both of your feet grounded, keep on hustlin’ – whether you’re making zero or a million dollar. This is important. Very important. Why? Because if you reach to a certain level of success, founders tend to procrastinate.
Escapism is okay. Procrastination is not.
Now over to you
Are you a startup founder? Are you starting your business because it’s cool to be an entrepreneur? If so, I hope that by reading this you’ll realize that while entrepreneurship is hip, failing your startup time and time again repeating the same mistakes is not.
Reflect to know more about yourself, and start graduating yourself from wannapreneurship to proper entrepreneurship.