Are You Mark Zuckerberg, Colonel Sanders, or John DeLorean?
Nobod
y likes to talk about failure. It’s not fun or sexy. We live in a culture that worships success, no matter how you get there, and is disgusted by and afraid of failure, no matter what the reason. This is especially true of entrepreneurs. We live in age that believes in overnight success. The mythology of Mark Zuckerberg starting a business at nineteen, immediately succeeding, and becoming a billionaire by age twenty-five is now considered a template for millions of young aspiring entrepreneurs.
Of course it is a cruel myth for anyone to believe that kind of success can be replicated. People would actually have a greater chance of winning the lottery. Most entrepreneurs fail. Sometimes they fail many times before they ultimately succeed. Only a few entrepreneurs have ever become billionaires before the age of forty, and so far only one person in history has achieved what Zuckerberg did at such an early age. That puts the odds at hundreds of billions to one. If anybody likes those odds, we have to play poker together some time.
Here are a few more real life entrepreneurial stories. Colonel Sanders didn’t start Kentucky Fried Chicken until he was sixty-two years old. If you don’t believe that, check Wikipedia. Many entrepreneurs never succeed even if they try over and over for an entire lifetime. Do you remember Jon DeLorean? His car company was sort of like the Tesla of thirty years ago. He was arrested for selling cocaine. Why? So he could raise money to save his dying company. Even the enormously successful Elon Musk had run out of cash before Tesla went public. Rupert Murdoch was out of cash in 1990. He survived because Marvin Davis loaned him money. Stories of extremely delayed success, nearly losing it all, or outright failure are not what people want to hear, but they’re important. As much fun as it is, nothing is learned from easy success. Failure and near failure is how people learn.
All of this begs to the question everybody running a business or thinking about starting a business wants to understand: Why do some entrepreneurs succeed while most of them fail? Here are a few key reasons.
1) Excessive optimism – Entrepreneurs have to be optimistic to succeed. However, too much optimism is also one of the most common reasons they fail. Entrepreneurs need to remember that only the paranoid survive. As much as you need to believe in your own success, at the same time you must never forget all the things that can go wrong and plan accordingly.
2) Inflexibility – Entrepreneurs need to be stubborn. They are often surrounded with people, even their loved ones, who tell them to give up and go get a job rather than trying to build something. Nevertheless, the inability or refusal to change and pivot kills many entrepreneurs.
3) Lack of creativity – A good entrepreneur learns from and often copies what others are doing if it’s working. As long as you aren’t stealing anything, that’s just good business. However, if you have none of your own ideas and are simply a copycat of what others are doing, you aren’t creating any value. Your business has nothing about it that is special, and your customers and others in the market will know it. A commodity business with no unique value proposition is much more likely to fail.
4) Greed – A good entrepreneur should be greedy and not just for money. Entrepreneurs should have a big appetite for risk, glory, fame, misery, power, and fortune among other things. However, many entrepreneurs allow their greed to get the better of them. They allow it to blind their judgment and make bad decisions that destroy their businesses or themselves personally. The best entrepreneurs know how to balance their greed with discipline, prudence, and humility.
5) Bad luck – Yes, a successful entrepreneur must be lucky. This is just a basic fact even as it may be offensive to many people who think that you have to make your own luck and everything that happens people deserve. As nice as that is to believe for some people, it isn’t true. Luck is usually the single most important factor that distinguishes the most successful entrepreneurs from those who just do ok and survive. It is extremely rare for an entrepreneur to achieve great success without luck, and there is no way for anyone to control that variable. This is why many successful entrepreneurs are superstitious.
Why become an entrepreneur when success is so uncertain? The most important reasons to become an entrepreneur aren’t success, money, fame, power, or glory. The entrepreneurial life is about being your own boss, doing what you love, and creating value. Hopefully if you create enough value, the money, fame, and glory will follow. Regardless, nobody can take away from you the enjoyment you derive from what you do. If you’re just in the game for the hope of hitting it big, you shouldn’t be in the game.
Which ones will get us?...NONE (they missed out hubris...)
Anatomy of an (un)fundable startup
Anatomy of an (un)fundable startupby Nivi on June 22nd, 2011
4 CommentsNaval and Mark Suster recently gave the keynotes at the 7th Founder Showcase. Andrew Chen did a better job of describing Naval’s keynote than I ever will:
“People spend a surprising amount of time on things that will contribute little or no value to getting them to a seed round, and this talk is the best I’ve seen in terms of presenting the issues in its entirety.
“Naval broke down the 5 main qualities of an ‘exceptional startup,’ in the following order:
1. Traction
2. Team
3. Product
4. Social Proof
5. Pitch/Presentation“And while all these qualities are important, Naval explained, the most important thing is to understand that: ‘Investors are trying to find the exceptional outcomes, so they are looking for something exceptional about the company. Instead of trying to do everything well (traction, team, product, social proof, pitch, etc.), do one thing exceptionally. As a startup you have to be exceptional in at least one regard.’”
Here are the video and slides:
Some of my favorite quotes from the presentation:
“If you can’t generate traction, do you really want to raise money?”
“If you need money to recruit the best, you’re not ready.”
“It’s easier to pitch a new investor than to convert one.”
“Capital is mobile, but capitalists are lazy.”
Learn more about: Presentations · Video
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# Comment by Ashe--> Ashe · Jun 24, 2011
Great Post! And very informative. I am involved with a start-up right now that has fallen foul of so many of the Don’ts that you mention. Thank you for the insights.
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# Comment by Bruno--> Bruno · Jun 27, 2011
Great presentation Naval! Good points on helping entrepreneurs determine if they are ready to or should raise money.
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# Comment by gary bahadur--> gary bahadur · Jul 1, 2011
I dont think social proof is quite as relevant when it comes to enterprise software yet. This will happen in the future but today its more important for consumer focused companies.
Sorry, comments have been closed for this post.
Looks like an interesting tool
http://www.inc.com/guides/2010/06/tips-for-hiring-great-employees.html Sent from Yahoo! Mail on Android |
Some good tips here |
6 Tips for Providing Better Online Customer Support http://mashable.com/2011/07/01/customer-support-online/(Sent from Flipboard) Sent from my iPad |