Misconceptions of New Entrepreneurs

I find myself continually answering questions from aspiring entrepreneurs about how to be taking seriously given different age or skill gaps, how to get in front of VC’s, and how to find that perfect idea that no one else has come up with before and has no competition.

MIT Launch applicants (high school students) answer a question about their biggest hurdle or impediment to starting a successful company:

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I’d like to take a moment to share how many of these are only perceived barriers or misconceptions.
1.      Experience / Credibility at High School Age:  Sure, you don’t have a resume to point to for credibility yet, but you have something even more valuable.  You’ve been raised with the latest technological advances, are at an age where you learn new things extremely quickly, and have less responsibility and therefore the capacity to take on the risk.  What’s more, you’re at an ideal age where you have some experience, but have not yet learned so much that you’ve built in assumptions about the way the world “should” work, and instead can imagine the way the world “could” work.  You’re uniquely positioned to innovate and take risks in a way that older generations might be afraid to because they’re afraid what people might think, that they should have done it the “status quo” way.  Plus, succeed or fail, it’s still a badge of honor to have attempted a startup at your age.

2.      Funding:  This is a much later stage in the process, not an early one.  You should only be considering investment once you have an offering that has been selling in the market, where you need capital to be able to keep up with demand and grow.  I suggest bootstrapping your company early on (pulling oneself up by the bootstraps, self-funding).  Taking investment too early would mean giving up too much equity of your company since there would still be too much risk to an investor – you would not yet have proved that there is a market, demand, and that you can execute on it and commercialize it.  And finally, when you do go for investment, VC’s will be later stages of investment and for large sums of money, usually preceded by earlier rounds of investment by angel investors.  It’s worth educating yourself more on this.

3.      Innovation / Idea:  Many people think they need to come up with an original, unique idea that even customers don’t know they need yet, and that has no competition.  They point to examples like the iPad and say that customers wouldn’t have known they needed a tablet computer.  The innovation wasn’t filling the need for a tablet, though, it was filling specific needs and uses where people were not satisfied with their current hardware.  And believe it or not, the tablet had been thought of before, and just hadn’t been executed on in the same way.  This example is just to say that you will not be able to come up with a unique idea that no one has come up with before.  It all comes down to execution.  And evidence of competition is actually a good thing!  It proves that you are solving a real need and that customers are willing to pay for a solution, and your job is to find gaps within that market.

4.      Team:  First time or aspiring entrepreneurs often think they need to be able to do everything themselves, or are tempted to work long hours trying to take everything on themselves.  They think their gaps in knowledge or skills are holding them back from being able to start something, when finding teammates that share their motivations and vision with complementary skills would both alleviate the gaps while providing much needed moral support during the inevitable ups and downs of starting a company.  There are, of course, challenges that come with finding the right teammates, which I’ll address in another post.

5.      Time:  This one also will deserve its own post at another time, but for now, I’ll just say that I started Launch on the side of being a management consultant, a notoriously time-demanding job.  If you find something you’re passionate about that’s worth carving out time, it just comes down to managing your time well and focusing on the things that matter.  This comes down to a couple simple things: planning well to focus on the things that will make the most impact (“need to have” versus “nice to have”) and occasionally reminding yourself while executing on tasks that “perfect is the enemy of done.”

So get out there and start something!  Because entrepreneurship is “the pursuit of opportunity beyond resources controlled.”

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