... where visionaries, game changers, and challengers discuss business models
So many people talk about setting up their business nowadays. How come some still talk about it and never make it work? How come some make it work but fail in 2 years time? Maybe the reason is in the fact that it is not so easy. I put some misunderstandings together about setting up your venture. I came to these findings through the first 2 programs in 2012 of “Start in 60 Days…”
Everything is already invented, only not by you!. In nowadays global market people have access to the same information 24/7. All over the world. As a result of that, the same ideas can emerge anywhere on the planet. You just need to make sure you find the right edge and… work much harder than your competitors.
“Our launch of our app or website will be next month.” Then you think it is all done and customers will come and buy your stuff. No. Wrong. It has just started. So don’t think when you develop software like e.g. an app that your budget is enough to cover the launch. No. Triple the budget for your app and website and this will be your budget for the next release.
It is the nature of an entrepreneur to see only the visible costs. Indirect costs like project failures, wrong hires, administration costs, the “invoicing and in the bank gap” etc. we don’t see. Mostly we think that revenues are high and costs are low. Once when I started my venture, these assumptions almost drove me to bankruptcy. I never made a real estimate of costs.
“When the investor will come on board, I can finally pay my bills and get compensation for the time I invested last year.” This was a remark from one of my students in the ‘start in 60 days” class. Wrong! An investor will invest for your future business. He will not pick up the bill for your learning process until now.
It takes effort to sell your product or service. You need to lobby, explain, invest time and figure our whether your initial product or service idea is the one customers are willing to pay for. It is never the first product or service you bring to market.
Every day thousands of new websites emerge. Why do you think your website stands out and generates some traffic? Before your website will bring you business, you need to invest time in attracting traffic, work on social media, make your content relevant to potential customers.
That’s a great feeling! I hired a branding agency, added another feature to my website, designed my brandbook, rented an amazing office in the city center, hired an accountant and finalized my business plan this week. Now I am in business! No. You’re not. You are far away from that. Spending and planning are the easiest activities. An easy excuse not to go to clients and try to sell your products or services. So next time, you should feel horrible not spending time with (potential) customers.
When you fail we feel terrible. We feel we have done something wrong and that we are not capable of doing the right thing. But in business, there is no right thing. Do you know what they call an entrepreneur who went bankrupt in Silicon Valley? They call him an experienced entrepreneur. This is how you should look at yourself. You learn most from your failures.
It is relatively easy to “give away” shares. You can give away stock to investors or your founding team. This seems reasonable as you might need investments and you want to engage new people in your company. However, there are different ways to do business now. Regarding investments you can think of “earning before you spend”, or get funding through crowdsourcing platforms. e.g. Regarding engagements, share of equity does not always make sense. Bonuses can be preferable. So think twice. You can never get your stock back.
You simply can’t. You need to work your ass off. Day and Night. The coming years. Setting up a company cost time. Not only to develop the product or service and sell it. Also all other activities that are required to set up a business.
The list is much longer than these 10 misunderstandings. I wanted to share the ones I have been struggling with. Let me know what misunderstandings you have experienced in your entrepreneurial life.
Wanna know more about this and how to set up your venture? Come join me at the Start in 60 Days Program on April 6th in Amsterdam.