Fact: some of you will never get your businesses off the ground and you will never become successful entrepreneurs. Not because you lack the hopes, the dreams, the ideas and the aspiration…but because you lack the one characteristic that successful business-owners have: the willingness to sacrifice and do whatever it takes to achieve their goals.
This post is a continuation of Why Some People Will Never Be Entrepreneurs. While the first focused on the realities of building a brand and buckling down to focus hard for several years (living a few years of your life like most people won’t so you can spend the rest of your life like most people can’t), this entry talks about the myths associated with a startup, and why 99% of them fail before they even get started.
What defines a startup? According to the Wiki, a startup is: company, a partnership or temporary organization designed to search for a repeatable and scalable business model. These companies, generally newly created, are in a phase of development and research for markets.
A startup is an actual company, partnership or organization, somewhere in a state of development and marketing, even if newly founded. The term “company, partnership or organization” means that the startup in question is an actual, functioning professional entity. Not an idea. Not a concept. An actual, breathing, professional organization of some type, with real money and professionals behind it.
An actual startup has a minimum 15 to 20 percent of its planned value already invested by the founders, and one to two years of time already on the line developing the platform. If you haven’t invested the time or finances in your so-called “business”, how can you expect anyone else – from potential partners to investors to employees and beyond – to take your “business” seriously or professionally?
What does development mean? Development means that the startup is, in fact, an actual business that is currently functioning and is in development stage. It is not in a concept stage. It is not an idea. It is not a theory. It has a solid foundation already laid and the people who built that foundation are currently tweaking that development towards their eventual goals.
What does research mean? Research means that the people behind the startup are actively researching potential markets for their startup, and they are continually developing their company towards those markets. They are not ideas. They are not concepts. There is an actual, physical business platform behind the marketing, one that is being researched and marketed to potential investors.
As a general rule, a startup has 15 to 20 percent of the funds they are asking for already on the line, minimum. They’ve already spent a year or two building up the platform, working their fingers to the bone, putting together the foundation layer of the idea they are looking to go public with. And they are prepared to spend at least another two to five years continuing to work until they start seeing a return on their investment.
Any monkey with diarrhea can shart out ideas. Ideas are not special. Ideas do not have merit. Only when those ideas are honed into something valuable do they offer any sort of real-world value. Therefore, a startup is not: an idea, a concept or a puff of smoke. A startup is an actual business with an already-developed platform that is in continual development and the founders are looking for funders to help take the company to the next stage of development, or to go public.
A startup is not: a person who wants to hire a social media manager or a Facebook analyst or a graphic designer or a content developer or a consultant or a Kickstarter campaign manager, but then uses the terminology “I’m on a startup budget so I have limited funds and can’t afford to pay professional rates”.
Inc.com has an excellent article on Seven Startup Success Stories. Adventure Life started with 3,000 for a laptop + brochures, then another 11,500 in advertising during their first year, and another 33,500 in advertising their second year. Johnny Cupcakes spent 7k in startup costs and another 10k for a trade show. Tokyo Joe put 300k+ on the line. Sweet Leaf Tea needed about 10k up front to get going. Paragon Space Development put over 75k on credit cards up front. Tarte Cosmetics put 18,000 on the line for makeup cases and containers. Edible Arrangements put 100k on the line.
None of these startups got off the ground with merely ideas and good intentions. The people who founded these companies put their own time, effort, hard-work and their own funds into their passions and worked hard until they succeeded. In other words, they put their money where their mouths were, and in return, they garnished investors because their passion and hard work showed.
Can’t afford to pay professional rates to professionals to develop the idea you want to eventually generate 100k a year or more in income for you? Go back to the drawing board. Work a second or third job for a year or two until you have the funds together to actually pay people to help build your company. Prove that you have a serious business venture, not simply a brain spasm.
Show proof to your investors and/or the bank that you are more than just a sharting monkey by actually having the stones to work and build your company by putting your own time and money on the line, at least 15 to 20 percent of the value of what you expect to build and at least a year or two building up the platform that you are trying to sell.
That means if you plan on building a 100k a year business, you need to have 15 to 20k of your own money on the line to pay for professionals to develop it. To hire a social media manager, graphic designers, coders, campaign managers and beyond. To actually build the platform that you will then use to shop to potential investors as your in-development, actual company.
Not an idea. Not a concept. Not a puff of smoke. An actual company or organization with an actual, physical platform that has had at least one to two years of time put into it, and at least 15 to 20 percent of the value of that company poured into it through the personal coffers of the founders.
“No money or time invested in your business? You aren’t a startup. You are a sharting monkey with diarrhea of the brain.”
Especially the professionals you are asking to spend the time to help you make your idea into reality. You know…the founders who are going to help you build an actual, physical platform over the next year or two until you have an actual, viable company or organization to shop to potential investors and to the public.
Consequently, this is why the vast majority of crowdfunding ventures fail, because sharting monkeys think that they can just post an idea up on Kickstarter or Indiegogo and they will magically find people who want to invest in that wet little puff of vapor and misty particles.
Wrong. People invest in results. Not pipe dreams. The most successful crowdfunding ventures are almost always put together by serious players who have either already spent a year or two building up their venture before going public with it, thus showing their passion and their seriousness at making their dream a reality, or they have a reputation for having developed similar concepts in the past, enough so that they have the trust of the public enough to warrant people investing blindly in their next venture.
The average monkey who holds up their latest turd and expects it to be seen as the Holy Grail of ideas winds up with exactly what they offered in the first place: nothing but shit in their hands. Because that’s all ideas really are: concepts. Puffs of smoke. Pipe dreams.
Want your idea to become successful? Work at it! Spend a year or two putting your own money, your heart and soul, your passion, your time, your blood, sweat and tears, into the project. Can’t afford to pay a professional designer? Learn how to design on your own. Watch 100+ hours of YouTube videos and learn how to code, how to use InDesign, AfterEffects, video editors and beyond.
Don’t want to invest your own time or money in your ideas? Get used to having your hands covered in shit, because that’s all you have to offer to the rest of the world…and that’s why you are doomed to failure. Real success, real startups, the ones which find investors and make it into the real world as actual, viable companies, have real people working for real money on the project…not hopes and promises and the wafting scent of offal.