Entrepreneurs by their very nature are typically optimists. You sort of have to be an optimist to start a new business, for obvious reasons.
Unfortunately, the odds are against you when creating a new company and there are many challenges that easily deter the cynical. For optimistic entrepreneurs, it’s real easy to lie about the challenges and the state of a business.
Here are the 10 biggest lies entrepreneurs tell themselves:
We Have a Great Idea
It’s hard for entrepreneurs to look at their business concepts objectively. And it’s hard for the people they surround themselves with to do the same because friends, family and business associates rarely have the incentive or heart to tell them that their ideas are mediocre or need to be refined. If you believe implicitly that you have a great idea, when things don’t seem to be going your way it’s hard to take a step back and evaluate whether or not your idea was lacking in the first place.
We Don’t Have Any Competition
I haven’t yet run across a company without a competitor yet I’ve met plenty of entrepreneurs who will state with a straight face “We don’t really have any competition“. They really believe it. To their detriment, of course. Bottom line: if you don’t think you have any competition, 99.9999% of the time you haven’t looked hard enough.
The Competition Sucks
“We don’t have any competition” is the first stage of competition denial. The second: that your competition sucks. That may be so but more often than not, this is simply an easy way of dismissing the risk posed by your competitors. Even in cases where the competition has an inferior offering, entrepreneurs don’t like to grapple with the notion that capable competitors with inferior offerings could still potentially eat their lunch.
If We Build It, They Will Come
Marketing a new business is extremely hard. Getting customers, clients, users, etc. is something that even experienced entrepreneurs can struggle with. So instead of really focusing in on how they’ll realistically acquire customers/clients/users, many entrepreneurs lie to themselves and put their faith in the idea that marketing will take care of itself. Today, this belief is often shrouded in talk of ‘viral marketing‘. If you’re relying on ‘viral marketing‘ to drive your business, beware.
Time Isn’t of the Essence
Entrepreneurs often think that their window of opportunity is far greater than it really is. In reality, new businesses usually have a relatively short period of time to establish themselves. Even if you have all of the money in the world, in today’s fast-paced economy, you can be sure that competitors, industry change and the dreaded ‘business cycle‘ will eventually catch up. That’s why you need to wake up every morning with a sense of urgency.
We’re In Control
There are a lot of things entrepreneurs can’t control. While you can’t downplay skill, talent and relationships, I think there’s a good argument to be made the success of most new companies actually boils down to things that entrepreneurs have little control over, such as timing. This shouldn’t deter you when starting a business but pretending that everything is within your control can be very damaging.
It’s Not the Product
You’re having a hard time getting that first customer. Or maybe users aren’t signing up for your new website. What’s the reason? It could be a lot of things. Maybe you’re not positioning your product correctly. Maybe you’re not making the value proposition clear enough. Or maybe there’s a flaw in your product. Most entrepreneurs don’t like to consider that last possibility because it’s the hardest problem for a business to fix. But if you’re not doing as well as you had expected, ignoring the possibility that there’s a problem with your product could be the beginning of the end.
We Project That…
It’s important to project certain things when starting a new business. How much money will you need? How long will it take to break even? Important stuff to consider. But too many entrepreneurs come to look at their projections as fact when in reality, projections are usually way off. As a rule, you’ll almost always underestimate the amount of money you need and the time it will take to break even and you’ll overestimate how quickly you’ll get your product built and acquire your first customer.
Somebody Will Want to Buy Us
When times are good, it’s easy for entrepreneurs to convince themselves that they’re working on something revolutionary that all of the big boys will want to acquire. But most new companies don’t get scooped up for boatloads of cash so if you’re not in it to win it on your own, you’re playing to lose and might as well head to Las Vegas.
We Only Need More Money
If your company isn’t doing as well as expected, it’s easy to
convince yourself that more money is the cure. But that’s rarely the
case. Just take a look at the shockingly-high failure rate for VC-backed startups. Millions of dollars of financing usually don’t save them from the harsh truth: most new businesses fail and that isn’t because all of them lacked financing.
Most good entrepreneurs are optimistic people. They need to be. But if your optimism leads you to look in the mirror and lie to yourself about the state of your business, it’s time for a reality check. The truth shall set you free.
Photo credit: karindalziel via Flickr.