June 6, 2015
Sensational documentaries and Hollywood portrayals of tech startups have produced a number of discrepancies between the way things appear and the way they actually are. While there is certainly some truth behind these stories, the reality is that dozens of myths and misconceptions surround tech startups in the 21st century.
Don’t be Shark Bait
While ABC’s hit show Shark Tank is certainly an entertaining and interesting behind-the-scenes look at how entrepreneurs pitch their startups in front of seasoned venture capitalists and investors, it’s not necessarily the most accurate portrayal of the average tech startup across the country. That’s not to say it isn’t a great show – it’s compelling, fast paced, and heartwarming at times – but be forewarned: the startup culture you see on cable television isn’t necessarily the way it is in real life.
5 Myths About Tech Startups
Those who have experience launching or working with tech startups know that it’s often much more difficult and challenging to get things off the ground. Let’s take a look at some common misconceptions that are fueled by a variety of different sources and examine the reality of these situations.
1. Funding just appears.
Funding is never easy. Even if you have a stellar product with massive potential, you still have to find investors and convince them that you’re worth an investment. Investors have no shortage of information when it comes to equity crowdfunding and most of the leverage is on their side. Don’t be the type of entrepreneur that walks into an opportunity and arrogantly assumes that all of the influence and control is on their side. Investors can almost always replace your startup with another opportunity down the road. You must take funding seriously.
2. It’s wrong to think about making money.
Another misconception is that entrepreneurs aren’t allowed to think about making and keeping money for themselves. That’s absolutely ridiculous. The entire goal of building a business and selling a product is to make money – so it would be wrong to ignore profitability. You’ll often hear stories about entrepreneurs who didn’t take a dollar of pay for two or three years – and while admirable – it’s by no means a necessity or requirement to do so.
3. The first idea is always the best.
Very rarely will an entrepreneur’s first idea succeed. Good startups are usually the result of going back to the drawing table, redefining, and adjusting. While you should put 100 percent effort into your first idea, you shouldn’t get discouraged if things fall apart. Take this as an opportunity to learn and pivot to the next idea. If you’re looking for proof of this, just remember that PayPal was co-founder Max Levchin’s fifth try.
4. Customers want your product from the start.
It’s easy to fall in love with your own product. You spend hours each day with it. You pour money and energy into it – it’s essentially your baby. However, don’t confuse your love affair with what customers want. It all comes down to marketing, advertising, and persuasion. Before you get too ahead of yourself with manufacturing and production, gauge your target market and find out how they feel.
5. You can’t eat or sleep.
When you watch documentaries on successful entrepreneurs like Steve Jobs and Mark Zuckerberg, you often hear about a time where that entrepreneur didn’t sleep or eat for extended periods of time. Are these stories true? Probably – but they don’t have to be the norm. Yes, you’ll work 12 or 15-hour days during certain phases – but it’s not always an indicator of success. Taking time off is actually very healthy and productive, as it promotes a good work-life balance.
Setting Things Straight
The myths surrounding tech startups aren’t all good or all bad – they’re just not very accurate. As a young entrepreneur or first-time founder, it’s important to avoid taking everything at face value. Always ask questions, network with your peers, and uncover more information. The more you know, the better off you’ll be. With these five myths cleared up, you should have a clearer, better picture of what the tech startup culture is actually like.
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