Want to Start a Business? Ask Yourself Why.
Sometimes your success depends on why you are starting a business in the first place.
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It's no secret. Most entrepreneurs will never build successful ventures, no matter how much they risk to start and grow and business. A select few will take the same risks and have major success. Why?
I found that the difference between the two is not the availability of resources, perseverance or support. It’s the reason they want to build a startup in the first place. Are the reasons below one of your drivers for starting a business?
1. To build wealth.
If you’re a hustler, an entrepreneur at heart and looking to create or grow wealth, build a small business -- not a startup. Small businesses like a restaurant, coffee shop, car dealership or hotel are much more likely to yield a return on investment with higher success predictability than startups.
The day you launch a startup product that you invest blood, sweat and tears in creating, all you’re doing is releasing a hypothesis. A startup is not a business, per se, until the key hypotheses are validated and revenue is generated at a cost lower than the lifetime value of a customer. This is much more complicated and riskier than obtaining the funds to buy the needed equipment, hire staff and advertise a car wash station on radio and television.
Plus, while you may hustle your way to promising levels of validation such as early adopters using, referring and paying for your product, the commitment needed to reach the next stages -- product/market fit and beyond -- is extraordinary. With experience and the right support, you may very well build a strong small business foundation with great leaders whereby the business is operating with a clear direction and growing steadily. However, if you’re running a startup, no matter your experience or resources, a full commitment is essential to the success of the venture. A startup cannot be outsourced.
Here’s more about the difference between a startup and a small business.
2. To build influence.
There are many ways entrepreneurs can build influence in their community, industry and the world. Obviously, building a successful venture that makes a difference in people’s lives is one way but if it’s one of the main reasons behind building a startup, it’s usually the worst way to build influence.
Instead, consider becoming an authority in your space by writing useful content that will allow you to build and grow an audience and a brand. Neil Patel built a worldwide brand as a marketing expert before he had any startup success stories with his ventures Kissmetrics, Crazy Egg and others.
3. Fear of missing out? Start a business.
Truly passionate entrepreneurs should fear missing out on opportunities to build startup value. However, if the goal is just to check off the “built a startup” box, be prepared to waste a lot of resources especially if you don’t have a programming background.
From customer interviews to running qualitative and quantitative validations tests, building an MVP, spending hundreds of hours talking to customers, hiring and managing a team, creating and distributing content and many other key responsibilities, consider investing at least two years and a six-figure check until, with perseverance and continuous iteration, a product worth using and paying for is born.
Instead, if you have the funds and passion for startups, consider providing a group of fully committed startup founders with the needed resources to start and grow while getting an opportunity to be part of the journey as an advisor, investor or mentor with a stake in the company.
In summary, startups are a guaranteed way of building wealth and influence only if you’re an entrepreneur for life. Many of today’s success stories have accumulated decades worth of small win to build their lifetime overnight success. The key is longevity and focusing on introducing solutions that make a tangible difference in people’s lives. Everything else follows naturally.