Q: What some illusions about start-ups? A: here’s my list of the five most important illusions about startups
- The illusion of the idea. Few businesses have truly new ideas. Apple didn’t; Facebook didn’t; Google didn’t. They took an existing idea and did it better, or differently. Quite often the second or third entrant into a market wins. Furthermore, business ideas have no value. Execution gives them value. At the idea stage, they are just vapor, with no way to tell if they will even work.
- The illusion about funding. You’d think that all startups go from business plan to pitching to funding to launch. But no. That’s the exception. Out in the real world, the early stages are usually a lot of struggle, work without money, doing things on your own time and after hours. Only a small minority, the best of the best, get other people’s money to spend. And that usually happens after a period of struggle, not at the beginning. Investors fund businesses, not plans; and even less so, ideas.
- The illusion about being your own boss. Nope. Your customers are your boss. Your employees are your boss. Start a business and you answer to a lot more people than you did as an employee.
- The illusion about persistence. Persistence only matters if the fundamentals are sound. Otherwise, it’s just digging deeper holes. Successful entrepreneurs often tell crowds of hopefuls how they have to stick to it, but that’s not really fair. Yes, their persistence won in the end, but for every success there are several failures who should have seen the signs sooner, and should have given up sooner.
- The illusion about passion. Passion is necessary but not sufficient. Yes, being committed, believing in the goals, is a good thing, for sure. You almost have to have it. But passion doesn’t make a bad business good. It doesn’t fix cash flow, overspending, low demand. Lots of failed businesses were fueled by passion. When startup founders emphasize their passion, potential investors are usually rolling their eyes and waiting for them to get to the real content of their pitch.
(This was published first as an answer on Quora)