This past March, Atlanta was named the best ‘non-New York or San Francisco’ startup city in the country by FitSmallBusiness.com. So, basically, we’re number three. Hey! We’ll take it! Incubators are sprouting everywhere and entrepreneurs have more resources than ever. Yet, with all this support, there are still some misconceptions about startups. Below we debunk a few of these startup myths.
1. Most Startups Succeed
According to the Startup Genome Project, up to 90% of startups fail, mostly due to scaling too soon. Fortunately, there is no shortage of advice articles from reputable sources explaining how NOT to fail. The good news is most entrepreneurs share two important characteristics: resilience and persistence. In the words of Spanx founder Sarah Blankely, failure is “a chance to build character.”
2. The majority of startups are technology focused
While technology companies seemingly make all the noise, most startups are not technology companies. In 2018 the industries with the top number of small business startups were: Business services: (11%) Food/Restaurant: (11%) and Health/Beauty/Fitness: (10%) according to a study by Guidant Financial. While the technology is at the heart of most major startups, often it is not the focus. At the end of the day, Startup behemoths AirBnB, Uber and Lyft provide a service consumed by the masses.
3. Startups need big funding to launch
Only a small percentage of startups receive big funding. In fact, in today’s market, entrepreneurs are opting to bootstrap their own businesses instead accepting VC funds. “Reliance on VC funding gives the entrepreneur no control over their company’s destiny. Whether a company succeeds or fails is up to VC investors,” writes Jonathan Breeze, CEO of AardvarkCompare. Conservative money handling and creative sourcing can lead to entrepreneurial success as easily as receiving a fat check.
4. You need to eat, breathe and live your startup
We hear stories of Elon Musk sleeping in his Tesla factory and Tim Cook beginning his barrage of emails at 4:30 in the morning, but the fact is the majority of us can’t handle that type of physical and emotional stress. Burnout, depression, anxiety – these are all real conditions that affect entrepreneurs at a higher rate than the general population. Keep yourself balanced. A healthy mind is crucial to the success of your business.
5. Everyone needs my product
Don’t ever assume there is a market for your product. As a founder, it is crucial to test your market for validation. Interview customers in your target market and get to the bottom of “why.” Why do these people need (or don’t) your product? Why would they buy it? Early legwork will lead to later success.
In the end (or beginning) it is important to associate with like minded entrepreneurs.
Every startup is unique and faces different challenges. Be sure to pick the right environment for you. And create your own playbook for success by following IgniteHQ’s startup advice on LinkedIn and Twitter!