What are the most unhelpful startup myths that new entrepreneurs believe?


66

What do you think some of the most unhelpful startup myths are? Things that new entrepreneurs should be warned about before they start working on their startup. What advice would you give a new entrepreneur to disabuse her or him of her/his illusions.

I'm asking because I teach beginning entrepreneurs at a university. One of the most common myths they believe is that the idea is the most important part of the startup. I would like to collate a list so I make sure I can pass on the wisdom here.

I also think it would be helpful to new entrepreneurs who are using this forum.

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asked Oct 27 '11 at 21:41
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Susan Jones
4,123 points
  • Thank you for a great question Susan! – Joseph Barisonzi 5 years ago
  • @JosephBarisonzi is there any reason this list cannot grow infinitely, without bound? How do we decide what is a "myth" and what is "most unhelpful"? What are the criteria? – Jeff Atwood 5 years ago
  • @JeffAtwood Fantastic questions for a conversation on the nature of quality subjective questions and the development of a strong community board. Probably better asked on the "meta" site than here. – Joseph Barisonzi 5 years ago
  • I read an awesome book on the subject. It's called "[9 Lies That Are Holding Your Business Back](http://www.amazon.com/Lies-That-Holding-Your-Business/dp/156414836X)" ([preview](http://www.stevechandler.com/f/9_Lies_Preview.pdf)). It's one of just a handful of MUST READ books for an entrepreneur. – Evik James 5 years ago
  • I know there is no definitive answer to this question. In fact, very few questions in business have a definitive answer. However, I think it is still worth asking the questions - and I think the quality of the information in the answers here bears me out. Would we have drawn it out any other way? Thanks everyone for contributing! – Susan Jones 5 years ago
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12 Answers


74

To add to the list, which I am sure will be developed by many far wiser than I:

The "Ownership" Myth: There is a prevailing belief that 100% is worth more than 49%. This gets in the way a lot. If by distributing 51% you are able to secure the elements needed to have a valuable business than 49% of "something big" is a lot more than 100% of "nothing happening"

The "Feature Rich" Myth: If your critical differentiation is "we will do it all integrated together" -- then it is a bad idea. Everyone -- even your "no clue competition" have plans to do it all. It is how to get there and what you roll out when that make the difference.

The "I am alone" Myth: If I read another business plan/proposal claiming there is no competition I am going to barf. On the plan. There is always competition. Think about it from the perspective of the customer's buying decision.

The "Technology First" Myth: The path to greatness is rarely having the best technology. It is far more often having the better relationship with the customer. It is a marketing game -- not a technology game.

The "Technology Only Myth": This myth is often perpetrated on this site -- the irrational and unsubstantiated myth that the world of business revolves around Silicon Valley and web-based startups. The vast majority of new startups are not in San Fran, or CA, or technology. Every day there are new restaurants, new medical device companies, new yoga studios, new energy alternatives.

The "VCRG8" Myth: Building a company through the growth of customers is like building your body through a steady workout. Growing your company with an infusion of VC money is like taking steroids. There are always consequences and choices. Success is not getting VC funding -- success is building a sustainable company that impacts people's lives.

The "Static Market" Myth: The characteristics of your market now will be the characteristics of your market when you launch and in 3, 5, 10 years. There will be other competitors. The existing competitor will respond to you. There will be changes you can't foresee. Your plans should take that all into consideration.

The "I am the One" Myth: I know, it is helpful to think you are the next Steven Jobs, William McKnight, Mark Zuckerburg, Sergey Brin or David Packard, . You might be -- but you're not yet -- so stop acting like it.

The "Make Money First" Myth: In the end when you are on your death bed -- will the amount of money you made matter? Or will it be how you impacted people's lives? The time to impact is not after -- it is now and always.

The myth of this graph: and it's various permutations that are included in most business plans.

There, have I missed offending anyone -- or did I pretty much include them all?

It should be noted that I have been a personal perpetrator of all of these myths at one time or another in my life. To all those that it negatively impacted -- I am sorry.

answered Oct 28 '11 at 02:33
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Joseph Barisonzi
12,131 points
  • Great stuff, I was going to ask for resources but then I saw your profile. – Omeid 5 years ago
  • Great, although "Technology First" is not a myth, it's not the only thing but it should come first in many companies. Dropbox is dropbox because first and foremost of their technology same goes for Google and many other companies. also compare Google and Yahoo, now you can see why some companies should put technology before everything else. – The Dictator 5 years ago
  • @DonWallace Thank you. I guess the community showed us wrong! :) Great job on your contribution as well. – Joseph Barisonzi 5 years ago
  • @OmeidHerat I hope that is because you saw you could get to me via my profile -- and not that you didn't want additional resources after you read my profile! :) – Joseph Barisonzi 5 years ago
  • @thedictator Thank you for your comment. I would disagree with your analysis. I think that the graveyard of failed companies would be littered with companies that could lay strong claim to having as good or better technology than the companies you present. I would propose that technology is a contributing -- but not determinate -- factor of sustained success. – Joseph Barisonzi 5 years ago
  • @thedictator But the the technology there automated great customer satisfaction. It was a means to an end. If that is true, how come http://en.wikipedia.org/wiki/AltaVista still isn't here? They had AMAZING tech for the mid 90s. How did two college students topple DEC? – Len 5 years ago
  • @Len correct me if I'm wrong Altavista was GOOD in 90s but they lost the tech battle to Google, and Google was simply better and disruptive. So what your saying is proving my point. – The Dictator 5 years ago
  • If only I had read this before! – Gagwgw 5 years ago
  • I'm impressed!! – Tim 5 years ago
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28

As an engineer who has waffled between working at startups and major corporations, I'd like to share a few myths from an engineering perspective:

  • If you just hire smart engineers and let them direct themselves, amazing things will happen
While some amazing things will in fact happen, they will also be a complete mess with no organization and will be constantly undergoing refactors and feature creep and check-in conflicts and so on. As soon as you have ANY amount of engineering, you also need project and product management.

Relatedly, there absolutely MUST be some regular communication from on high about direction and roadmap and so on. At the last startup I was at, there was never a single roadmap-type meeting the entire time I was there. I kept on suggesting that having weekly or biweekly sync-ups might be good; the answer I got was, "Well, we had one just before you started here." That's nice for everyone else. I never had any feeling that anyone cared at all about my contributions, or that I fit into the big picture at all.

  • Startups are nimble; corporations are not. Therefore, anything corporate is bad.
The corporations I've worked at have used some level of the Agile process, which has kept them quite nimble. The startups, on the other hand, have typically been stuck in analysis paralysis, infighting, and a constant crunch-burnout cycle. I get more done working a typical 40-hour week at my "soul-sucking corporate" job than I did in the entire two months at the last startup I was at.
  • Do what your successful idols did.
The startups I've been at all had some specific person (usually a member of their board of directors) up on a pedestal because they had been involved in another startup that did really well. The person being idolized generally was aware of the fact that they simply got lucky because they had the right product at the right time with the right contributing factors leading to the right successes.

Just because someone worked on the original PowerMac or the iPod doesn't mean they have any clue how to break into ebook readers or social networking applications. (Two actual examples from my experience.)

  • If you hire someone who is an expert in their field, they will be able to shine in other fields.
Sort of related to the previous point, but sort of not. Also, hiring someone specifically to do one thing and then ending up having them do another while the original thing is put on hold? Not a way to engender happiness, trust, or respect. (And both of the times this happened to me they did one worse by still dangling the carrot in front of me for a while, but never making good on it, or "shifting directions" and leaving me stuck in something that was supposed to just be temporary.)
answered Oct 28 '11 at 03:21
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Fluffy
381 points
  • Wow, blast from the past. I used to be an assiduous reader of your blog during the NM->NYC transition years. Good to see you are still around and still making sense. – Drxzcl 5 years ago
  • @Ranierei It's nice to know that someone thinks I make sense. :) – Fluffy 5 years ago
  • Great insights here. Nice to hear it from a technical point of view as techies definitely have their own way of looking at things. – Susan Jones 5 years ago
  • @fluffy I really like your list -- especially the one on assuming all things corporate are bad. – Joseph Barisonzi 5 years ago
  • Thanks! this was great – Andrewliu 5 years ago
  • That's a good point - just because someone successfully launched a start-up does not make them omniscient. Success of a business has many factors, and some are beyond our control (like the market). Having said that, I would definitely take their advice very seriously. – B Seven 5 years ago
  • @BSeven Oh, sure, don't get me wrong, hopefully they'll have learned what went right and what went wrong. But being able to see what went right in retrospect is not the same thing as being able to make it happen again. – Fluffy 5 years ago
  • +1. I have only one issue with this post. For your first bullet point, my response is: Valve Software. Their entire management model is based on self-organization. – Joel Cornett 5 years ago
  • @JoelCornett That's a fair point, but the fact that a few startups have been successful with that model doesn't mean that any startup that follows that model will be. Valve worked hard to make that work well for them and it took time to get it ramped up; they didn't just throw a bunch of people into the room with no direction from the very beginning. Also, their projects DO have internal structure - it's just not mandated from a corporate level. – Fluffy 5 years ago
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23

Myth 1: I have a brilliant startup idea that will make me rich.

Reality- ideas have little if any value. Only an implementation or substantiation of that idea has value. (A patent, a business, something actual as opposed an intellectual concept defined only in your head.) In addition, the goal of "getting rich" is counterproductive. A successful startup needs someone who is passionate about providing a solution to their customer's problems, not someone who just wants to get rich.

answered Oct 28 '11 at 01:28
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Gary E
12,510 points
  • I disagree. I think ideas have tons of intangible value. You can't make money off an idea, I agree. But that doesn't mean they lack value. A business starts with an idea, but the best idea in the world will not equate to success if the execution is poor. – Yatrix 5 years ago
  • I have a million ideas. None of them are solving anyone's problems because they are all just ideas in my head. And I think all of them will make me rich. But no one will pay me for my ideas. A business is always **much** more than just an idea. A business has value because it is an **implementation** of an idea. – Gary E 5 years ago
  • Wth? I said an idea has a lot of INTANGIBLE value. I never implied a business is mostly the idea, nor did I imply (or say) that you can be paid for an idea (you could, actually, if someone wanted to market your idea). I can't go up to you and say "jet-packs" and you'll pay me. However, if I could create a jet-pack, you'd be interested - who wouldn't? That sale started with a great idea, ergo, the idea has value. All I'm saying is an idea has value, it's just not tangible; you can't estimate it's monetary worth. – Yatrix 5 years ago
  • So to summarize, you believe you believe a "thing" has value, even though no one can even estimate that value? – Gary E 5 years ago
  • The name "Coca Cola" has value, doesn't it? "Apple"? "Microsoft"? Those aren't cash-evaluated, but they definitely hold value. Those aren't ideas, obviously, but my point is: value isn't always equal to $. – Yatrix 5 years ago
  • The name Coca Cola is not an idea. It is a trademark and the company behind it has spent hundreds of millions of dollars advertising that trademark- hence giving it value. I have an idea for a new product I will call "Choco-Paco Flig". I don't have a trademark for this term, have never advertised it, and the idea and term currently have zero value. – Gary E 5 years ago
  • Do you read anything I write or just preview the 3 first words and comment? 'Those aren't ideas' is what I said. Then I went on to say 'Those [the names I provided] aren't cash-evaluated, but they definitely hold value'. I'll try to simplify this for you: if your idea is a good idea that you can market and profit from, then it has value. It doesn't have MONETARY value, as you can't price the idea. It has INTANGIBLE VALUE, meaning it's value isn't something that shows up on a balance sheet. – Yatrix 5 years ago
  • NOT ALL ideas are valuable. But the underlying idea that you based your business on DOES have value. It must or you couldn't sell the executed product based on it. Personally, I hope "Choco-Paco Flig" has value because it sounds freaking delicious. – Yatrix 5 years ago
  • Everyone has an idea. Some people get ideas every hour. The valuable skill is to have the certainty and self control to invest months or years to develop the idea into a business. – B Seven 5 years ago
  • Ideas have value, just very little value. To throw an arbitrary useless number out there thats based on nothing... I'll say approximately 1/100th the value that the ideators think they do. :-) – Umassthrower 5 years ago
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10
  • Myth: Failure is the best teacher.
Confucius said:
By three methods may we learn wisdom:
  • First by reflection, which is noblest.
  • Second is by imitation, which is easiest.
  • Third is by experience, which is the bitterest.
In my experience learning from failure is the hardest subset of experience to learn from, even if you do apply the appropriate reflection after the fact.

Knowing that you have failed doesn't necessarily tell you anything about how not to fail in the future and until you know what best practice is, it is often difficult to tell why you failed at something. I've worked on my fair share of failed projects, and it doesn't matter how many Project Post-Mortems you do, if no-one puts into practice things you decide should be improved, nothing will change - You will just keep making similar mistakes over and over.

Research shows that you learn the most from success, and one way to reinforce successful behavior is deliberate practice, which is part imitation and part reflection. Through deliberate practice you maximize the reinforcement of successful behavior while you distance yourself from, and thus minimized, the reinforcement of failing behavior.

A friend of mine used to say "Practice doesn't make perfect, only perfect practice makes perfect!". I didn't understand what she meant at the time, but now I do. It means that if you practice the wrong way, you will only reinforce that incorrect behavior - only by practicing and getting it right, will you end up improving.

Two of the top links on a google search for deliberate practice provide good summaries of why deliberate practice is important in becoming an expert, and also bring up another relevant myth.

How Do You Get to Carnegie Hall? 8 Keys to Deliberate Practice references the famous Outliers, by Malcom Gladwell, which popularized the Ericsson et. al's research that 10,000 hours of practice is required to become an expert.

Note, the current top Google link for deliberate practice is to psycnet which is selling The role of deliberate practice in the acquisition of expert performance, the Ericsson, Anders et. al. paper, which introduces the 10,000 hour concept.

  • Myth: Natural talent counts for more than experience
Deliberate Practice – Where Self-reflection, Work Ethic and Ambition Meet references Why Talent Is Overrated by Geoff Colvin, which insists that the "conventional wisdom about natural talent is a myth.", so this may also be worth discussing with budding entrepreneurs.
answered Nov 2 '11 at 02:08
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Mark Booth
201 points
  • +1 on the role of failure with all of the links! – Joseph Barisonzi 5 years ago
  • I'd rephrase the myth you quote, as you imply that people do not want to put in practice what the great teacher that is failure has taught them. – Laundro Mat 5 years ago
  • @LaundroMat - My point is that failure itself is not a good teacher, only reflection on failed behaviour and deliberate practice of successful behaviour will bring about self improvement. I have tried to rephrase some parts of my answer to make this more clear. – Mark Booth 5 years ago
  • "If you are planning on learning from your failures, don't take up sky-diving." It's always better to learn from other peoples' failures. – Mike 5 years ago
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10

Myth #1

One can learn what one needs to know to be successful about entrepreneurship though an undergraduate course.

Myth #2

Advice, failures, successes, tips that work for one company have relevance for a different company.

answered Oct 28 '11 at 00:38
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Tim J
8,334 points
  • +1 on Myth #2 -- learning through anecdotal evidence is almost as bad as legislating through the same. – Joseph Barisonzi 5 years ago
  • I understand your point of view re #1. However, I think if you study AND implement, it can give you an advantage. But I am biased! :-) – Susan Jones 5 years ago
  • The point of my answer was to get other people and the OP to see that this question really has no use on this forum. I believe I failed in that regard. Oh well. – Tim J 5 years ago
  • While Myth #1 is obvious to those of us who have been around the block a few times, it probably isn't obvious to students on a university course trying to teach them entrepreneurship, so it is a valuable contribution nevertheless. – Mark Booth 5 years ago
  • Right. And thus the irony of the question... – Tim J 5 years ago
  • Just to be clear, I assume by #1 you don't imply that a POSTGRADUATE course CAN teach you everything one needs to know about entrepreneurship either. – Imbrondir 5 years ago
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5

Myth: Failure is bad.

Actually, failure is a great teacher.

Internet is plenty of articles about this Myth. If I'm not wrong, Jack Welch wrote a book about it.

answered Oct 28 '11 at 02:33
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Tiago Cardoso
202 points
  • This is so true. Failure is something we don't accept well in AUstralia but it is a necessary part of the learning curve. – Susan Jones 5 years ago
  • I wonder whether this still counts as a myth: once you start reading about creating your own start-up, one of the first things you see is "prepare to fail, and learn from it". – Laundro Mat 5 years ago
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8

My most important things would be:

  1. Just get started - getting over the hump and spending too much time trying to intellectualize everything is no substitute for cracking on. The whole thing is a journey with ups and downs and the more you hit, especially the downs, the faster the ups start coming
  2. Put yourself in an uncomfortable position - don't set out with lots of protective barriers and limitations/expectations. The sooner you find yourself where it's just you and your plan (however scant that may be) the sooner you realize that it's only you that is going to make stuff happen - you have no one else to blame or lean on so all those cold calls, difficult meetings, etc. pale into insignificance as they just have to be done - it's massively liberating and you'll never work for anyone else once you've experienced it
  3. Passion, passion and more passion - your clients, especially your founding clients are buying you and your infectious energy and self belief. Make sure it's really passion and not just misguided enthusiasm. Real passion means you remain open to ideas, you listen, you constantly improve. Misguided enthusiasm means you are really just pushing an idea you once had that you think everyone else will love - they probably won't, but if they believe in your passion they'll give you everything you need to know to turn it into a reality.
  4. Enjoy it - in some ways forget about the money - or in other words, don't forget to calculate the true value of being your own boss, following your dream and having the freedom to do what you love - that is worth 10x any of the salaries you will get elsewhere

Hope that helps.

answered Oct 28 '11 at 00:11
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Will
117 points
  • Welcome to the board -- I love what you wrote -- but the question is what myths are unhelpful -- not what advice would be the most helpful. I expect that you will unnecessarily receive a bunch of down-votes rather than deserved up-votes for this "framing error." Take the time to edit it and make it match the question! – Joseph Barisonzi 5 years ago
  • I agree with Joseph, but I still gave you a +1 for the #2. This may be the driver to keep you going. – Robert Koritnik 5 years ago
  • #3 and #4 means you have a hobby, not a business. – Stanigator 5 years ago
  • If you can make money on your hobby, why not turn it into a business? – Thedaian 5 years ago
  • @ Thedaian - Turning a hobby into a business works for some people. This is how I started my first business. Unfortunately trying to make money out of my hobby killed it for me and I no longer do it as a hobby (or a business!). – Susan Jones 5 years ago
  • @thedaian Because then you need to get a new hobby!?! – Joseph Barisonzi 5 years ago
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2

Worst myth ever: "If you build it, they will come."

Damn you Kevin Costner! Just kidding, I love that movie.

But seriously, you need to understand the customer's needs and involve them in the process from the beginning, otherwise you risk building something nobody wants. For details, learn about Steve Blank's Customer Development process.

answered Nov 4 '11 at 04:33
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Aoporto
61 points

1

Myth: Any smart Idea sells.

Had if the case Google Wave and many more of such kind would have rocked the world. I feel not only a smart idea, a proper vision and education around the product is also required.

answered Aug 14 '12 at 19:07
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Dhananjay
33 points

1

Not sure if this counts as a myth, but I've heard it too often:

"Our plan is to get bought out by Google / Microsoft / Oracle / Cisco / ..."
answered Nov 8 '11 at 15:23
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Mike
946 points

0
  • Your product will go viral
  • You don't need marketing, a good product is enough
  • Your product should be perfect before launching it
  • Any others from this article
answered Aug 14 '12 at 03:41
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Pieter Eerlings
31 points

-1

Out of failure one can often find new opportunities, so is it really a failure? Failure only occurs when we don't act on our past mistakes and embrace the new opportunities that have arisen from those past experiences.

answered Nov 2 '11 at 19:44
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Tim Stannage
1 point

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