Entrepreneurship and startups are undoubtedly entering the mainstream. This is great, yet it makes it more important than ever to dispel certain myths that might build the wrong expectations in some young entrepreneurs.
Here is a non-exhaustive list of surprising facts you should keep in mind before you start your startup journey.
1. Most Founders Are Neither Young Nore College Dropouts
There are many misconceptions about the typical startup founder, but the image of a young college dropout is the most common one.
In reality, this image is not really representative of reality. The age of the average tech founder is 39. Moreover, a 60-year-old entrepreneur is 3 times more likely to build a successful startup compared to a 30-year-old founder.
Moreover, 95% of entrepreneurs have at least a bachelor’s degree.
The obvious implication is that tech startups are not just a young man’s game. On the contrary – having a lot of work experience, a good professional network, and personal savings (more on that later) in reality increase your chances of success a great deal.
The other implication is that if you are a young, inexperienced founder, it is extremely important to involve a more experienced person in your project. A co-founder or mentor with at least one startup behind their back would make your life much easier.
2. Most Early-Stage Startups Have To Bootstrap
Some of the most common startup news are announcements about late-stage venture capital funding rounds. The big numbers associated with such deals make them attractive for journalists, especially if the startup does something unusual.
That said, the reality is that by far the most popular method of financing for startup projects is personal funds at 77%.
Investor funding is hard to access for early-stage projects, especially those headed by inexperienced founders. Consequently, if you are a first-time founder you shouldn’t plan for an outside investment until you reach the growth stages of your project.
“Stay hungry. And bootstrap.” -Rob Kalin, Etsy Co-founder
3. Don’t Keep Your Good Idea A Secret
It’s a natural instinct as an early-stage startup founder to try to protect your idea because you are afraid companies with more resources would steal it.
While this makes sense in theory, it rarely works out like that in practice.
“The value of an idea lies in the using of it.” – Thomas Edison, General Electric Co-founder
Many ideas sound great, and the only way to find out which ones would work out and which ones wouldn’t is to validate them in practice.
While corporations have access to a lot of resources, they are much more rigid compared to small companies because of their size and the red tape in them. It’s easier to steer a boat than a ship.
Consequently, instead of undertaking zero-to-one projects of their own, it is much easier for big companies to buy the startups they see value in. This makes it very unlikely an established business would steal your early-stage idea.
Moreover, spreading your idea as much as possible makes it more likely that you would find partners, customers, or other stakeholders that can add value to your business.
Most importantly, by sharing your idea openly you’d expose it to criticism from said stakeholders, which would let you iterate more efficiently and find product-market fit faster.
Of course, once your business starts growing it’s a given that other companies would try to imitate your model and offer similar products and services. That said, during the growth stages it would be impossible to keep your business secret anyway – at that stage, you should look into more sophisticated moats to give you a competitive advantage.