5 Common Entrepreneur Myths We All Need to Let Go of
There are many stories out there about the common traits of an entrepreneur. These stories are all written as if there are magical properties that you are either born with or not, and if you don’t possess them you will never succeed.
However, what you often find is that many entrepreneurs that seem to display these ‘common traits’ still often fail, while those who don’t, make it.
So, where are entrepreneurs going wrong?
Myth 1: You have to be a risk taker
Diving head first into your brilliant idea does not make you an entrepreneur. More important than risk appetite, is how risk is managed when the wrong step is taken.
For example, iKubu, a South African business started by two engineers. They developed a radar system that alerts cyclists of potential hazards on the road. Leaving their corporate jobs to build their innovation is not what defined them. It was how they responded to failure.
They battled for nine years to sell the radar software technology – even trying door-to-door sales – but could not get a big break. They did not give up though. They adapted, learned and realised that they needed an accelerator. After getting involved with Knife Capital, iKubu was sold to Garmin last year. iKubu is proof that agility and determination is a better determinant of success than being able to take a risk.
Myth 2: You must have start-up capital
“It’s not about start-up capital. It’s about keeping the business going after it has started,” says Catherine Young, owner of Thinkroom Consulting.
Many businesses can start with very little capital, particularly those that operate online. The trick is sustaining and growing your business for the next 18 – 36 months. This is the most difficult.
This is often where we see entrepreneurs sell their homes, work 18-hour days and borrow money from family and friends, doing whatever it takes to make the business work. That is what makes for real entrepreneurs. There is a saying in the SME ecosystem that if entrepreneurs are not prepared to invest and lose everything, they will not be taken seriously by investors.
Sayu Abend, the CEO of SpacePointe in Nigeria, ran into funding challenges relatively early on. The old adage of using other people’s money to grow a business helped greatly, as she first turned to family and friends, paying them back incrementally. By showing this commitment, it helped her secure US$1.2 million in funding from multiple investors.
Myth 3: Entrepreneurs don’t know when to quit
Oh yes, they do. There’s a saying that when you fail, fail quickly, pivot quickly. Quit what isn’t working, but never quit the dream.
When an idea doesn’t work, or you’ve taken a wrong turn – let go.
Prepare just the minimum viable product or service to see if it will fly. If it doesn’t, move on. Good entrepreneurs don’t get so attached to their solutions that they are blinded by their desire to make that specific solution work.
As Perminus Wainaina, founder of Career Point in Kenya, says: “Do not quit without having tried and tested your idea, seen it is viable and had enough savings to last you until the business picks up.” Career Point is now the second largest career search engine in Kenya.
Myth 4: Entrepreneurs are extroverted leaders. ‘It’s who you know, not what you know.’
Not every entrepreneur is an extrovert. There are many ‘quiet’ leaders who demonstrate the resilience, listening skills and analytical insight to build great businesses.
One of the best things an entrepreneur can do is to surround themselves with people who have different styles.
Adding to this, Beth Buelow, author of The Introvert Entrepreneur, says: “Introvert entrepreneurs such as Bill Gates, Larry Page, Mark Zuckerberg, Jeff Bezos, Tony Hsieh, Guy Kawasaki and others have transformed our lives, not by pretending to be extroverts, but by applying their introvert strengths to their entrepreneurial endeavors.”
Myth 5: You must have a business plan
A business plan is traditionally used to project financials to secure investment. However, many successful entrepreneurs have never had a formal business plan, and an increasing school of thought suggests that a better strategy is to explore and fine tune assumptions before defining a specific plan with financials based only on dreams and passion.
I would advise that instead of getting fixated on a business plan, rather focus on a business model. This complements the business idea by describing the customer journey, and more importantly, the channels to acquire new clients.
There is a big movement currently underway to focus on Strategic Growth Plans that show how Go-to-Market can occur for entrepreneurs. The focus is on bringing customers to the business, not necessarily money, which often requires a business plan from investors.
What does all this tell us? If you are an entrepreneur, stop worrying about not having the ‘chosen’ characteristics. Breaking the mould is what makes you an entrepreneur in the first place. With passion, determination and a willingness to try and fail, and try again, the world is your oyster.
About the author: Perry Kamel, Senior Business Development Manager for Small and Medium Enterprises in Africa at Microsoft.