Why success is independent of your business idea, product quality, or your capital?
Every year, 350 million new startups are established. 90% of these startups fail, regardless of the industry in which they operate, why?
Here are the top 3 myths about startups success:
Myth number 1: “startup companies need a unique idea in order to succeed”
Many assume that a startup is a young company that developed a unique business idea with the goal the instantly impact and control its targeted market- this is a serious myth. Many believe in this false conception because a startup success is usually presented by singular stars like Mark Zuckerberg (Facebook), Larry Paige (Google), Elon Mask (Tesla & SpaceX), Jack Ma (Alibaba), etc.
Notwithstanding, this doesn’t uncover the main reason behind their success which lies in their business model, product positioning, and customer experience, rather than within the uniqueness of their idea.
- Facebook wasn’t the first social media platform, but rather houses SYSTEM and Myspace that came before.
- Google wasn’t the first search engine, nor did it invent the option for search monetization.
- Zynga did not invent Farmville, but rather copied the game from Farmtown.
- Microsoft Windows wasn’t the first operating system of a user interface. In fact, it was technically inferior to its competitors but was able to win the market share “war” between Apple and IBM. This is simply because Microsoft understood what consumers really desire, more than Apple and IBM.
Tip: consumers want your offer to be unique and your execution to be perfect. Success has nothing to do with your business idea.
Myth number 2: “if you build it, they will come”
The second most common myth about startups is the phrase: “if you built it, they will come”. Researches claim that 21.5% of startups fail within the first year, 30% in the second year, 50% in the fifth year, and 70% in their tenth year. Many has built startups throughout years, investing their time, energy, and savings, from the belief that investors will notice their hard work.
Most people notice the huge success of companies like Yahoo, Google, and Facebook. After all, these are just free websites that people flock to. It gives a false safety feeling for entrepreneurs who think that building a certain technology and bringing it into the market is all you need in order to attract users. What they fail to realize, is that Google was struggling for years before becoming successful, Facebook was hardly popular in Harvard university (where its first started) and had to make many changes and adaptations in order to achieve its targets. The thing is, we only see the tip of the iceberg of success.
90% of the work within startups is not known for the public and the media does not talk about it. Only when you read the founders’ biography, years later, you discover the real journey they had to make in order to build a successful startup. In this world, it’s the best product that wins- it’s the best known one. Most of your time needs to be invested in spreading the gospel about your ideal. Talking to the people you wish to serve. Understand their needs, hopes, and dreams, realize why they will say no to your solution and address these objections.
Tip: In this world, it’s the best product that wins- it’s the best known one.
Myth number 3: “at first, you need to raise money”
This is the myth that is responsible for the destruction of millions of unique business models each year. To millions of young entrepreneurs have fantastic ideas that could become the next Amazon, Facebook, or TikTok. Unfortunately, many of them will not invest in their startup or personal growth, and still dream about millions of dollars they will raise from venture capitals.
Business is a matter of people, if you can understand people’s problems and how to significantly and effectively solve them- your startup will flourish, whether you have investors or not. The good news is; you can start implementing your business model by investing your time on:
- Talking to people
- Getting a feedback on your idea
- Distill your product/service
- Building a business plan
- Building a prototype
Tip: the first good investment and the best one that you need for your startup is yourself (in terms of personal and professional growth). The second one is investing time in understanding your potential clients.