It’s common knowledge that 90 percent of startups die. So what do the 10 percent have that the 90 percent don’t?
We are taught that succeeding as an entrepreneur is all about working ridiculously harder than anyone else and persisting beyond the challenges. Then, and only then, will you “make it.” That is a big bunch of hooey.
I believe there is one factor above the others that allows for great success: brutal honesty. Unfortunately, we are fed lies in the form of inspirational quotes and fairytale stories about entrepreneurship, which tempt us not to engage in brutal honesty.
So let me be brutally honest then. Why do startups fail?
Many entrepreneurs interpret the emphasis we are told to place on data as logging into your Google Analytics often ignoring underlying assumptions and often simply reinforcing your existing beliefs (i.e. confirmation bias, or reading into data to prove out what you already believe). While data is essential, the data that is most important is the one spat out by your brain, not by the computer. The data on the screen is full of shoddy underlying assumptions. The only way to be brutally honest is to take this digital data and force yourself to create real-world, self-critical human conclusions about what the data means. Without that, you will lean yourself out of existence.
Do tons of market research
This is another myth that you are constantly fed by the entrepreneurial expert community. The brutally honest truth is that conducting traditional market research with surveys, focus groups and open-ended conversations, while being helpful in some ways, could actually mislead you to build a business on top of a weak foundation. The reality is that market research requires the power of context. To succeed, you need the brutal truth from your market and the only way to get the real feedback is by trying to pitch a product while asking your audience to pay for it. Only when the product feels real to your audience, will you get the critical feedback you need to succeed.
Entrepreneurs work hard, they’re never ‘lucky’
Also known as “I make my own luck” or “The harder I work, the luckier I get.” All of these statements are false. The concept of luck does exist, but the real word for it is timing. Timing determines if the right door opens exactly when you need it, or the key person walks into your life or if your product resonates with your customer given all the other factors in the world at that time. And despite our best attempts, most often, timing is outside of our direct control. The only thing we can do is to stay alive long enough, with the broad delirious vision of where we want to go, and open tactical plan, and attempt to increase our timing-based probabilities. It is true that “the harder you work, the luckier you get,” but that is because with hard work, you are increasing the probability that your efforts will intersect with opportunity at exactly the right time. It takes brutal honesty to separate mystical notions like “luck” and call it out for what it really is — the spontaneous intersection of your efforts with the right moments in time.