Most of you budding entrepreneurs have probably long been looking for that special idea that will catapult you and your startup to success.
But my experience as a management consultant and investor has convinced me that the magic is not in the idea, but in you and the implementation. I’ve seen people make it big with worldly ideas and really great ideas get done badly with disastrous results.
For example, most people thought Twitter was a total snoozer when Jack Dorsey was looking for funding – especially since MySpace already owned that territory. But today, Twitter is a $50 billion behemoth and MySpace is forgotten. On the other hand, most thought segway was the next big thing in 2001 as an electric “people carrier,” but it has yet to take root.
After some meditation, I’ve decided to offer you my own perspective on some of the biggest misconceptions I hear all too often from passionate, smart people about what it takes to start a successful business:
1. A successful business is all about the right idea.
Contrary to popular belief, there is no shortage of good ideas. Every investor I know keeps hearing the same ones. There is a lack of people and teams who can turn an idea into a real business. This requires focus, determination, resources and problem solving.
2. True entrepreneurs are born, not made.
It’s true that some people take risks by nature, but these people often don’t make the best entrepreneurs. I like people who do their homework first and take calculated risks instead of closing their eyes and jumping. You can learn to be an entrepreneur by working in a startup, speaking to peers, and being a mentor.
3. Every inventor is an entrepreneur by default.
In my experience, inventors tend to have a strong focus on technical issues and are not necessarily interested or good at the requirements of business execution. For technical innovators, I often recommend finding a partner with in-depth business understanding. This is a clear case where one plus one equals three.
4. New ventures are expected to be messy.
The best new companies I know are carefully planned and managed, no matter how innovative they are. The challenges may be unpredictable, but they must be solved in an orderly manner by people with the right skills and mindset. Companies that are constantly in chaos are at high risk of failure.
5. A first success leads to a low risk on the second.
With innovative startups, every new one is a new challenge. Even great leaders tend to assume that a formula that worked once will work again. In reality, every startup brings with it new unknowns, new people, new competitors, and new customers. Don’t be too confident that now you know the magic.
6. Real innovation requires breaking the current system.
I find that most new business successes minimize disruption. However, they mostly look beyond their own domain to bring in new business elements from other domains. For example, many products are now offered on a subscription basis, which was a concept from the service world.
7. A smart team ensures entrepreneurial success.
Even with the most capable teams, it takes strong leadership from the founder to see the big picture, make tough decisions, and project a strong image. Of course you need to hire the right people and really listen to them, but don’t expect them to do your job.
8. Enjoy the flexibility to make your own decisions.
While starting a new business puts you in control, you are faced with staggering new demands from partners, investors, suppliers and customers. These can take up a bigger part of your life than a simple 40-hour week, and you can’t hand off the decision challenges you don’t like.
9. After incorporation, a company must minimize changes.
The only constant in business today is change. Every entrepreneur needs to define repeatable processes to stabilize the business, but never settle for that The status quo. Markets, customers and competitors are evolving and you must continually update the business to stay on top.
10. Look for spinoffs in your organization that can grow.
People embedded in an existing business are often too narrow-minded, lazy, and risk-averse to be new entrepreneurs. Internal business expansion is often incompatible with established operations, which is why mergers and acquisitions are the most common scaling strategies.
You should never let any of these challenges get in the way of the joys of entrepreneurship, including the satisfaction of working on your passion and receiving the feedback that you’ve made the world a better place.
We all need and look forward to your ideas, your innovations and your implementation. Keep it up and have fun!