Dispelling Common Misconceptions about Entrepreneurship: The Truth About Business Startups

Judging by the huge number of books, magazines, and Web sites on the topic, entrepreneurship is of enormous interest to the public. People from nearly every walk of life dream of one day being their own boss and becoming financially independent, yet many are held back by doubts about their innate talents, their tolerance for risk, and their ability to raise capital. Marc L. Lowell, a business analyst at the service where you can ask to write my essay for me, emphasizes that still, others are so eager to forge ahead that they ignore major pitfalls and are driven by unrealistic expectations about their future lifestyle as entrepreneurs.

This lens is about putting to rest some of the most common preconceptions about starting a business in the hopes that it will inspire more people to explore entrepreneurship and to enjoy greater success along the path.

Misconception #1: Entrepreneurs Are Born, Not Made

Part of the mystique of entrepreneurship is the idea that people who found successful businesses are a breed apart from the rest of us. While it’s undeniable that some individuals have a knack for business, it’s also clear that entrepreneurship is a set of skills that can be learned by most people.

What cannot be taught is the desire to start and run a business, but beyond that attempts to identify a distinct personality profile of entrepreneurs have failed. The traits that lead to entrepreneurial success are essentially the same as those of high performers in other disciplines. Persistence, hard work, intelligence, and creativity are important in whatever field you work in.

Misconception #2: You Have to be Willing to Take Big Risks to Be a Successful Entrepreneur

Our culture celebrates entrepreneurs as freewheeling, larger-than-life characters who are heedless of risk. They dream big and always swing for the fences, or so the story goes.

The reality is that most entrepreneurs, particularly successful ones, excel at taking calculated risks where “heads I win, tails I don’t lose much” applies. They go to great lengths to mitigate risk whenever possible before making a commitment and find ways to shift the odds in their favor.

Entrepreneurs who start promising—but uncertain—ventures are not necessarily risked seekers, but rather are willing to act in the face of the unknown. Experiments indicate that aversion to risk and aversion to ambiguity (uncertainty) are distinct psychological traits.

Misconception #3: The Key to Success is Getting Funded

A lot of wannabe entrepreneurs are inspired by headlines like, “Startup Receives $15MM Investment.” Let’s face it: getting obscene amounts of cash in exchange for a mere idea sounds a lot sexier to most of us than trying to bootstrap on a steady diet of ramen noodles and six-packs of Red Bull. In any case, we’re conditioned to believe that new ventures require large amounts of startup capital, so securing funding from institutional investors seems like the way to go.

There are some problems with this approach, however. First, only a tiny fraction of early-stage companies are able to raise equity from sources outside the founders’ immediate social network before going to market. Unless you have a killer idea and a team that has successfully led other venture-backed startups, you can probably take this option off the table right now.

Second, even if you do get funded, much of the capital may be held back until you reach the milestones outlined in the term sheet. Not only will you have to give up a significant chunk of equity, but you will also put your company’s destiny in the hands of others. By the time the business becomes cash flow positive, your equity position may be heavily diluted, if you haven’t already been forced out.

I’m not suggesting that VCs are evil; I’m just pointing out that they are understandably protective of their own interests and are likely to be more adept at negotiating term sheets than you are! Remember, they do this for a living and have investors of their own to answer to. Don’t expect them to be forgiving if results fall short of your confident early projections.

Finally, it turns out that most promising businesses can be bootstrapped without the help of institutional investors. A survey of “Inc. 500” companies (some of the fastest-growing in the nation) found that most had only modest initial capital requirements, and the overwhelming majority of these successful businesses were either self-funded or reached profitability through assistance from informal channels (i.e., family and friends).

The definition of entrepreneurship I subscribe to is “the relentless pursuit of opportunity without regard to the resources currently controlled.” Instead of raising a pile of cash, rethink the business model to lower your capital needs. 

Misconception #5: If I Build It, They Will Come

This is one of the most pernicious misconceptions people have about business, and it has destroyed billions in capital over the past few decades alone. It’s easy to fall into the “build it and they will come” trap because we have a natural tendency to get excited about pursuing our own dreams and to project our attitudes and feelings on other people. In short, we proceed from the assumption that we know what customers are looking for when all too often we don’t have a clue.

You might think this only happens to first-time entrepreneurs, but it can strike even the largest and most experienced organizations when they focus on the product and ignore the customer. One of the most spectacular debacles in recent memory was the ill-fated Iridium project.

Motorola spun off the Iridium division in the 1990s to create a global satellite phone system. While the technology itself was a success, the size and weight of the handsets (literally the size of a brick), the high cost of the service, and limited reception (the phones only worked outdoors) resulted in disappointing subscriber growth.

It turned out that the people who genuinely needed a global satellite phone (like a geologist working in a remote area) were far too few to justify the enormous investment required to develop the product, and Iridium’s target market of jet-setting business travelers remained unconvinced of the benefits. The result: nearly $5 billion down the drain.

Had Motorola started by trying to understand the customer’s need, they would have realized that portability and ease of use were far more important to most business travelers than worldwide coverage. Don’t forget Peter Drucker’s famous maxim: business is not about creating products, it’s about creating customers.

Misconception #6: Running my Own Business Will Be Glamorous or Easy

There are lots of reasons for wanting to become an entrepreneur, and starting your own business can be very satisfying and rewarding. However, you shouldn’t kid yourself about the effort involved or your chances of success. Many businesses are outright failures, and most of the survivors offer little more than self-employment for their owners (frequently for less pay and longer hours than their previous jobs). Don’t get into entrepreneurship because you think that it will be easy money or that you’ll enjoy shorter hours as your own boss.

About the author: Diane H. Wong used to be a teacher for ESL students. Besides, she is a writer at DoMyWriting, where, everybody can ask to write my essay, so she prefers to spend her spare time working out marketing strategies. In this case, she has an opportunity to share her experience with others and keep up with advancing technologies.

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