Being your own boss may sound like heaven on earth, but most people do not fully understand what it takes to be a successful entrepreneur. What they see from the media is how successful (and rich) Bill Gates, Elon Musk and Jack Ma are. All the struggles, pains, and tears never made to the headlines.
Based on statistics from Paul Graham, of 511 companies that successfully got into the Y Combinator program only 37 were sold for US$40MM or more. That’s just a 7% success rate so you’ll definitely want to think carefully before starting your own company. Here are five things to know before taking the plunge:
1. Ask yourself if you are ready and totally passionate about your business
Entrepreneurship is not for everyone. Make sure you ask yourself many times if committing yourself to the singular success of your company is the kind of thing you want to pursue in life. On top of economic uncertainty, startups command much of the available time in your life hence potentially compromising on your family and social life. Are you ready to be on call and working 24/7?
2. Your business will most probably fail
Nine out of ten startups will fail, it is a hard truth. In addition, according to Bill Gross of Idealab one of the most important factors to success is not even under your control – that of market timing! When he ranked all 100 companies at Idealab he found timing accounted for 42% of the difference between success and failure.
Clearly, just because many startups fail doesn’t mean that your startup will experience the same. Successful entrepreneurs are highly resilient and driven and it can take many years before success if found. Be aware of such statistics and be realistic about your goals, but don’t get intimidated by them.
3. You will face competition, and it is a good thing
If you think you won’t have competition, you are wrong. There are plenty of companies competing for the same customer base. Additionally, they might be better than you and have more money to spend. So, it is very important to be prepared and never be discouraged by it. It should be your greatest motivation instead, embrace the competition and improve your product every day.
4. Find mentors and seek advice from them
Deciding what type of help you need is the first step before hunting mentors – you need to know what the mentors can do for you. Lois Zachary, the author of The Mentee’s Guide: Making Mentoring Work For You suggests the readers to start with a list. You may want a mentor who is well-connected, has expertise in your startup idea, good listener, or who can provide initial investment.
A mentor can provide pointers on business strategy, help expand networks and act as friend to motivate when things get rough. Look within your family, friends, university and even more mature businesses in different geographies or stages.
5. You don’t have to do it alone
Find a partner who can complement your skill sets and you won’t need to do everything on your own. Besides a business partner, make sure you have someone to share the ups and downs with, who will continuously support you all the way up. Things may get rough sometimes (or most of the time), but the real entrepreneur won’t get beaten up.
As Zig Ziglar said:
“You don’t have to be great to start, but you have to start to be great.”
Have the courage and work on your startup idea now! You may fail and learn something OR you may found the next Microsoft, Tesla or Alibaba. You choose.
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Disclosure: This article is republished in collaboration with Convergence Ventures. It’s initially published at The Quad and written by Faiz A. Rahman