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There’s one message you’ll often hear me repeat — starting a business isn’t easy. There’s a lot that can go wrong, but surrounding yourself with the right network and proper mentorship will ease the pains and give a clear sounding board to gain feedback and grow as a leader. We’re glad to have you at Startup Stir and excited to be hosting a 4 city series with some of the country’s most innovative business leaders — all founders who at one point or another took the plunge.
For details on our Founders Forum program or to RSVP in Boston, San Francisco, Chicago or New York, check us out on Eventbrite.
In the meantime, I present you you with Founders’ Fallacies: 4 Mistakes Startup Founders Make –
1. Thinking You Need a Business Plan
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I see this all the time. Founders that read a blog post or a book and have convinced themselves that they must have a perfectly crafted business plan. They’ll agonize for months over the “right” equation for user acquisition or go-to-market strategy. They’ll have beautiful pitch decks and revenue projections, but the one problem is — they’ve got all the right plans and no action. Oftentimes, these founders have great theory, but poor practice.
So I’ll say it now — you do not need a formal business plan. 75% of whatever you’re planning won’t work out anyway. If you ever need to raise money, projections and documents will be a different story when the time comes. The best businesses were built on the back of a napkin. So stop planning, and start doing!
2. Believing If You Build It, They Will Come
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This…simply isn’t true. You can deploy great products all day long, but unless you are willing to standup and shout from the rooftops, user acquisition simply won’t occur. As the founder, you need to take personal responsibility to hustle your business in to being – from product design to both marketing and sales.
Remember: You can blog, social media and inbound market all you want, but at the end of the day all businesses come down to relationships, and relationships are built proactively. First create a great product. Second, don’t lazily be under the misconception that if your product is better, users will flock. Pick up the phone.
3. “We can do it, but we need to raise…”
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The sex appeal of raising a round should be put to bed. It’s a far too common crutch that goes something like “Well, we haven’t been successful yet because…and if we raise $x, then…” My response is simple – Tell Niraj Shah at the early days of CSN Stores, later Wayfair that they needed to raise money. They were 9 years in before securing $165 million. Tell the founders of Grasshopper phone service that they needed venture capital. They never did. They scaled to 50+ employees and sold to a Fortune 1,000 company for an “undisclosed sum”. Tell the ladies who founded Her Campus that they couldn’t do it without a VC writing a check. They’ll all tell you you’re flat wrong.
If you’re starting an airline or a biotech or a heavy manufacturing business, then yes, you need to raise money. If you’re starting a web-based application or consumer product, then you need to hustle and growthhack user acquisition. After you’ve de-risked the business, maybe venture capital makes sense, but maybe it doesn’t. Not raising money isn’t what’s standing in the way of your startup’s success.
4. Tying Your Self Worth to The Success of The Business
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Trust me, I’ve been there. There’ve been dark days at every venture I’ve tackled. Specifically, in the first company I launched at age 17, we experienced a slowdown in 2008. At one point, we were hemorrhaging 2 – 3 customers per day. To add insult to injury, we had a major server hack, email outages and lots of angry clients. Each time the phone rang, someone was cancelling their service and our revenue projections for the coming year were dropping another $1,000. The phone was ringing a lot. I stopped answering.
You see, I took each cancellation and each blow to the business as a personal insult. It’s hard not to. This is your baby, your creation. I’d worked hard for 7+ years to build this business, and was personally devastated to see it crumble before me for things I felt were outside of my control.
You cannot tie your self worth to the success of your business. In addition to being a founder, you’re likely a leader in your community, a friend, a husband, mother, wife, and a rockstar simply for having the chutzpah to put it all on the line and do something others weren’t. As Jay Z so eloquently raps, “You was who you was ‘fore you got here”.
Go create something great. I’ll see you this month in Chicago and New York. Daniel Acheampong is leading a fantastic program in Boston, and Jon Piron is at the helm of Startup Stir’s San Francisco operations.
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