In my previous article, I explained the three essential qualities of a successful startup. I concluded with a promise to dispel the myths that are often told to wannabe entrepreneurs—eager to get their new business off the ground. Well, I'm a man of my word, so here are the five things that you're often told are essential to a successful startup, but are really not needed.
Lie No. 1: You need a business plan
I've lost track of the number of business books and articles that have warned me that a business plan is vital for the success of any new venture. We're told that we need to map out our mission statement, corporate ethos, competitor analysis, growth predictions, blah, blah, blah.
Business plans serve only two purposes. First, they're a crutch for entrepreneurs that need to convince themselves they have a winning business idea. Their business plan is a comfort blanket providing a false sense of security that everything will be okay because it's all planned out in advance. How many successful entrepreneurs do you know that say they owe their success to an amazingly well thought-out business plan?
Second, business plans are great if you need an outside investor. Not that venture capital firms buy into your overly-optimistic literary masterpiece, they just end up with a better comfort level in your understanding of what it will take to launch a successful business.
Now, don't get me wrong. If you want to write a business plan, go ahead. I never have. But know this: your business is unlikely to be any more successful if you create one.
Lie No. 2: You need a large sum of money
Unless you are building the next commercial spaceship or electric car, you don't need to raise venture capital for your new business. I break out in a cold-sweat just reading about others' attempts to raise investment capital; I can't imagine just how horribly distracting the process is in real life. If you can't start your business without an influx of X million dollars, then your idea is flawed. Sure, once you are up and running, raising VC in order to expedite growth is not a bad idea but, when your new business is just an idea, then you are far better off asking friends, family, or local angel investors for financing.
Don't think it can be done? I started Trackur for less than $10,000 and, to this date, have not needed any external capital investment. Bootstrapping is the new black, baby!
Lie No. 3: You must hire the best people money can buy
Another lie, pervasive in startup circles, is the need to hire the very best people for your team. The best that money can buy! Er, no. Not really. All you need to ask yourself is this: are you the best person out there to start this company? If you, as the leader, are the best person to start this company, you can make it work. If not, then you need to find another company to start, because you clearly lack the passion and drive needed to turn your idea into a successful business.
Sure, as you grow, you can trade up, but for now hire who you can afford, not who's the best. Do you know what I look for in new hires? I'm not looking for those that are the best in their area of speciality. I'm looking for those that have the desire to become the best in their area of specialty. Employees that have the basic skills needed, but have the desire and passion to fill in any blanks by learning on the job and adapting to the changing needs of the company, are what I look for. I hire for drive, not ego.
Lie No. 4: You need fancy office space
Flushed with other people's money, most startups sign a lease on a swanky new office. You know, the kind that sits in a converted warehouse and has loft ceilings. They install hardwood floors, hire a receptionist (which they'll never need), and then insist that all of their employees spend at least 10 hours a day in said space—so they can feel like they're getting an ROI from their investment. What a waste!
Unless you need a storefront for customers, or meeting rooms for clients, you don't need a fancy office. Heck, you don't need any kind of office. While I admit, it's is VERY tempting to have an office to "show" the world that you're a real company, you can mostly do without it—especially during the first few months. Trackur is three and a half years old now and we still don't have an office. E-mail, telephone and video conferencing, instant messaging, and a suite of other free tools, mean that we're able to get on with our work without having to meet face-to-face. And, here's the kicker: employees will often work for less, if they can do so on their schedule and from the comfort of their own home.
Lie No. 5: Don't launch until you're ready
How many closed "beta" services have you read about? How many companies have you seen remain in "stealth mode" and never actually get around to launching their company? When I launched Trackur, I honestly believed that we'd launch a fully finished product and then just keep iterating. Boy, was I wrong. Trackur has never been perfect. Heck, we're on our third major iteration and I still don't believe we're even close to reaching 100 percent of the vision I have for it.
Your new company will be a series of launches. Your product or service will never be perfect, so get it out of your head that you'll launch when you feel your product or service is ready. Guess what? It will never be ready. You will always be reinventing yourself. You will always be fixing bugs. You will never feel 100-percent satisfied in your offering. That's the kind of drive that will make you a success—assuming you actually launch it.