Every year Barcelona plays host to 4YFN (4 Years From Now), an offshoot of Mobile World Congress aimed at connecting startups and investors, and enabling them to launch joint ventures together. It’s a great opportunity to learn more about how to set up a successful startup, which is something GetApp knows a thing or two about. However, for every great piece of advice, you’ll probably also hear some terrible myths that can lead you in the wrong direction.
Based on tips we picked up at 4YFN, we’ve put together a list of the myths surrounding running a successful startup, and the reality behind them, as well as our recommendations for how you can harness this advice to boost your business.
Startup myth: Competition kills startups
Unless you’re reinventing the wheel, then it’s likely your startup will face a lot of competition in your chosen market. This is a classic fear for a startup: they’ve got more cash, they’ve got more staff, they started earlier, they have a cooler office, they are smarter than us.
But if you didn’t have any competition it’s likely that (a) your idea sucks and (b) you’d have less motivation to innovate and improve. There are other factors that are much more likely to kill your startup than your competitors, such as conflict.
Reality: Internal conflict kills startups
According to a study from Harvard Business School, 65 percent of startups fail due to co-founder conflict. This is a major problem because, while other aspects such as the business plan, technology, and market can change, the people who founded the company won’t. This also extends to first hires. A fish rots from the head down, so if your leadership is setting a bad example, it’s likely this will extend to the rest of your company.
Recommendation: While Uber is an extreme example of how to get company culture wrong, it’s important to shape your workplace environment culture – and the missions and values of your startup – early on. Culture can cover everything from management style, to the way you interact with customers, to social media profiles, to the office dress code.
To ensure that you have properly defined your company culture – and that it’s communicated clearly to all employees – invest in HR software designed for startups that covers:
- Recruiting and onboarding: all new employees understand your culture even before they are hired
- Performance management: the goals of your company are reflected in those of your workers
- Workforce management: your workstyles (including vacation, flexible working, and scheduling) are accessible at all times.
Startup myth: Speed makes a great startup
While getting your product to market quickly, rather than waiting until it’s perfect is crucial (think Steve Jobs and the “Lisa”), rolling out feature after feature and update after update is only useful if your customers want this type of functionality. If half of your product is redundant and you’re not focusing on what your customers want then you’ll likely fail just as fast as you can roll out those updates.
Reality: Listening makes a great startup
If you aren’t collecting feedback from your customers about your product then you have no way of knowing whether it’s meeting their needs or if there is a genuine market opportunity.
For example, Instagram started off life called Burbn (named after the Kentucky whiskey) and was a kind of Foursquare with the addition of pictures. The founders realized that people weren’t using its check in capabilities, but were using its photo-sharing features. They then removed most other features and focused on photo-sharing, and so Instagram was born.
Recommendation: To effectively listen to your customers, you need to actively reach out to get their feedback, not just rely on them telling you what they want. This is where customer feedback software can help by enabling you to better collect, share, and then act on useful information from your users.
Startup myth: Raise as much money as possible
While all money might sound like good money when you’re just starting out, it’s more important to focus your limited time on getting the right money. Think about what the interests of your investors are – are they already on 16 boards and have no time to give to you and your new business?
Reality: Raise smart money
If you want to succeed, turn your efforts to venture capitalists that will not only give you money, but also help and support in nurturing your business and your skills.
As the founders of collaborative blogging startup Niume understand the importance of raising smart money. They said: “The most important thing to look for in an angel investor is know-how. Make sure he or she understands your business and has experience going through it with similar companies. The actual amount they invest is far less important than the value they bring to your company”.
Recommendation: Attending events such as 4YFN is a great place to start making the kind of contacts you’ll need to get smart money for your startup. It’s also important to build a strong network before you start looking for money, and to surround yourself with the right kind of people who believe in your business and can help introduce you to people to drive your startup forward.
Startup myth: Follow your passion
There are thousands (maybe even millions) of articles out there explaining how you need to find your passion and set up a business based on that. If you love baking, these articles will tell you that you should channel Mary Berry and write some cookbooks – but does the world really need yet another recipe book? They’ll say that if what you enjoy doing most in life is solving people’s problems and giving advice then you should become a life coach – but aren’t there enough of those already?
Reality: Focus your startup on a real need
Combine that with the skills you already have that set you head and shoulders above most other people, and you’ll find that you have a business idea that is useful, that you’ll be able to execute well, and that interests you.
Recommendation: A good place to start when coming up with an idea and plan for a business is to think about how you could make the problems you face on a daily basis better. Keep track of social media conversations around the topic, get advice from experts in the field, and solicit feedback from potential customers.
What startup myths have you heard?
We’d love to hear from startups about their journey to success, and what myths they encountered along the way. Share your stories in the comments below or email me at firstname.lastname@example.org.
If you’re just getting up and running – or even if you’ve been operating for a while – you’ll need to make sure you’ve got your technology landscape in order. GetApp can help guide your through the decision making process and ensure you select the right solution for key functions, such as: