I used to believe that entrepreneurs were born.
However when I started my consulting business 7 years ago, I started to look at it as a subject where you need to learn skills instead of a “talent”
Yes, to have an enterprising mindset you need some kind of motivational talk or maybe even it’s within your DNA… but once you have this, my question is always the same..
“So, what’s next?”
You feel fueled. You feel like you’re ready to do something great. You have found your purpose and the big WHY… but the question remains.. of HOW ?
This is where it all goes back to skills. No matter how strong your motivation is, you will only go far with the skills needed.
Why Entrepreneurs Fail
Here’s why most people usually fail at their startups based on my personal experience of running a business and also coaching people
Over Inspired With Big Ideas
Everyone is looking to save the world, finding the Biggest problem out there. They look at environmental issues, poverty, education.
Why is this an issue?
- No Skills in the area they want to go into
- Unrealistic expectations that big problems will give them quick and bigger $$$
- Driven by “motivational” talks and gurus instead of a purpose they believe in themselves.
I personally love to break down a big problem into smaller pieces, and look at them separately instead of finding the big magical solution.
You can always combine many solutions later and remember that there’s always many improvements to make along the way.
Objective to cash out
Many get blinded by stories of startup founders who sold their companies to big tech firms and made millions. They decide to build a company so that they can sell to the big boys.
It’s not wrong. But wouldn’t it be too soon to think about this even before you’ve proven that your business has commercial value? Some even try to cash out at ideation stage.
My advice is simple - focus on getting your idea to work and self-sustaining. Once the model works, there will be investors who are interested in you.
Poor business model
The business model does not make economic sense. Many times there are fancy/dynamic solutions. Businesses that require donations, businesses built to acquire other businesses, to collect investments…
But people forget to stop and make sure they have a good revenue model instead of having to rely on external funding. Yes, you do need funding for expansion, but the business itself should be able to generate revenue to some extent before we talk about external funds.
Some spend time and money getting customer data hoping to sell it in the future. But guess what? They forget that they need cash flow to survive today. Bear in mind that cashflow is an outcome from the poor business model - it is not a problem by itself.
Opportunities Overflow
When I started my business 7 years ago until today, there are many opportunities that come by. If you don’t know how to “filter” these opportunities, they could turn very dangerous.
My friend approached me to revive a manufacturing business. Another friend asked me to co-manage a training company… and a few more when I just started as an entrepreneur. It was very tempting, and it was very draining.
You will end up detouring, not focusing on your core business, chasing too many different goals. In the end, you’ll be left with nothing.
FOCUS is one of the key elements in running your business. The moment you start to take care of many businesses, that is when you start to fail
Multi-Tasking
You try to do every single thing yourself. Payroll, Marketing, Design, Accounting, Paperwork… all of a sudden you believe you have 20 hands.
You think you know your business so well, that only you can do it. You refuse to outsource because you think people are overcharging you.
You can’t delegate to your staff because it takes time to explain to them, might as well do it yourself.
So how are you going to have time to do things which are more important and which only you as the business owner or leader can do? Focus on what’s critical. Without this, your business is bound to fail.
Shooting Stars
Or in other words.. Not targeting a category of customers and instead going for everyone. This is one of the key elements when you use your Business Model Canvas- Defining your Customers.
Unless you’re selling regular consumable products, it’s very unlikely that your product is needed by everyone.
Just because it’s SUITABLE for everyone, it doesn’t mean NEEDED by everyone.
So stop thinking about how great your products are and be realistic and focus on the pain point you are solving, and for who it is solving. Otherwise you’ll simply be wasting your resources and drive your business to failure.
The BOSS
Some are quite naive. To them, an Entrepreneur is someone who comes up with a good idea and their job is to get funding and investment. Then, the investment is used to hire an expert that runs the business and manages people.
Ideally this would be great…however as an entrepreneur it is important for you to feel the ground and get your hands dirty.
You need to know your business, the competition, technicalities to some extent instead of sitting full time in the office and entertaining investors and clients.
Let’s be realistic, you’re running a startup, not a multi-million dollar company yet.
In the last 2 parts, I shared the most common reasons businesses fail. However I believe we can also prevent this from happening and here are my suggestions.
How To Avoid Failure?
Get A Business Partner
Accept that you are not a superhero, or by now you’d have a movie deal. You don’t know everything in a business, especially if this is your first venture. Get someone who has necessary skills that complement your skills.
Most importantly, is to get a partner that has the same believes and value system.
For e.g. if you’re good in technical things, you might need someone who’s great at sales/ marketing.
Ask the questions of what impact you want to create? Are we both passionate about solving the same problem?
Finally the most important thing, have a partnership agreement in place. The trust you started off with might not exist after sometime and this is very common. So avoid this from becoming the reason your business fails.
Get A Teacher/Coach/Mentor
Let’s say you can’t get a partner, or even if you do… the next thing you need is a teacher. A teacher, a mentor, a coach - you need someone who has walked this path before. Someone who knows the business world, the challenges to expect, what to watch out for.
Try not to follow someone who does not have practical experiences. There are many people who can have great theoretical knowledge but these might be things that worked in the past for other brands and not your case.
Even if someone has “done” it - make sure it’s not too long ago. Our business landscape changes so fast that what worked then might not be relevant anymore too.
Try Selling To Strangers
It’s not difficult to sell to friends and family. But try selling to a stranger and see what’s their feedback.
You are more likely to get an honest review and solid feedback which would be useful to reshape your business model (product/pricing). Best is if you can sell to the customers of your competitors - you will know whether your product can swing customers from existing competitors.
Remember 1 thing. Rejection in this case also means that your product/service is still not as good as you thought it was and it’s time for you to refine it.
Join Meaningful Network
There are many business networks out there but be careful what you choose. Find something with substance.
Some might be to high level and not suitable for startups
Some might be more focused with entertainment, partying.
Some on the other hand might have what you need to grow and get support from each other.
Choose wisely.
Learning
Even successful entrepreneurs never stop learning. They read books, listen to podcasts, attend conferences. It never stops.
So yes, entrepreneurship can definitely be taught as long you’re willing to work both hard and smart.