For those entering the startup world, statistics can look bleak. According to 2017 research, the startup failure rate by industry was between 42% in the financial sector to 63% in information. The blog Small Business Trends, says “9% of all American businesses close each year, only 8% are opened.”
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This paints a bleak picture for American business, but with many resources and funding avenues driving startups are always in season. If you’re considering founding a startup, you may also be looking for advice. It may seem like everyone has an opinion, but they aren’t all equally valuable. Following bad startup advice can hurt your chances of success, and turn your startup into another statistic. We’ve compiled bad startup advice we’ve heard so you can avoid taking it:
Bad startup advice #1: old adages die hard
You may have heard the phrase “old sayings ring true.” With startups, it seems that couldn’t be further from accurate. Here are some examples of bad, overused and cliche advice that without proper guidance can be harmful to your business:
“Follow Your Heart, The Money Will Come”
“If you build it, they will come,” may have worked for Kevin Costner in Field of Dreams, but it doesn’t necessarily spell success for business owners. Steve Griggs, Founder and CEO of Steve Griggs Design, tells Entrepreneur that he learned that the hard way.
“Instead of just ‘doing what you love,’ I say, ‘be fair, honest, and make a profit,’” says Griggs. Putting your bottom line above your personal desires, at least temporarily, might put you in the mindset to alleviate the cash-flow concerns that many startups incur.
“Fake It ‘Til You Make It”
Speaker and growth strategist, Gene Hammett, cautions against taking “fake it until you make it” to heart. He says to Inc. Magazine, “My experience in leadership has taught me that you should be very careful before you fake to your team. At the surface level, it may sound good to be the leader who knows the solution. However, an evolved leader knows this is not the case.”
Instead of following your heart, or faking it until you make it, The Muse suggests the following:
- Let go: Get good at knowing when it’s time to let a beloved idea go and trusting your judgment
- Don’t make it about you: don’t over-credit yourself for successes or blame yourself for mistakes, growing the business is a shared responsibility
- Present evidence: as opposed to offering false confidence, use evidentiary tools to show present and future success
Set your business up for success by dropping unsuccessful concepts and being transparent with others in your organization.
Bad startup advice #2: Scale quickly, dive right in
For young entrepreneurs, the world may seem like their oyster but time and time again, experts say a slow and calculated approach is what really pays off. Entrepreneur magazine suggests that young, smart entrepreneurs risk little by waiting through academia to pursue their dreams.
Sure, if it’s a hot enough concept, it may be tempting to rush to market. On the other hand, however, investors like to see a seasoned management team when they think about placing their money.
While the “perfect business plan” may not exist, throwing caution to the wind to blindly pursue your dream of big money may be a pipe-dream that’s too good to be true if you also want to be able to do things like eat and pay your mortgage. When it comes to quitting your day job, author Barry Moltz tells Inc, “When you have enough customers to support your minimum overhead, jump to doing the business on an exclusive basis.”
Bad startup advice #3: reduce cost by settling
Some entrepreneurs take on everything on their own. That’s the plight of being a solopreneur, for sure. However, when it comes time to talent, “settling for less” is never advisable. There is a time and a place for “less” in the startup world, however. Bob Sutton, who is an organizational behavior expert at Stanford School of Business, says scaling is about “less”, and what he means is that it’s about getting rid of what isn’t working for you to replace it with something fresh.
Often times, entrepreneurs find themselves grabbing at more when they are looking to scale. This may mean hiring employees who don’t quite fit the bill, simply because the price is right and you want your business to grow.
Considerations when hiring
The Huffington Post suggests business owners skip the pomp and circumstance around hiring, things like offering swag, using cutting-edge hiring technology and making new hires based on nepotism, and instead strip the process down to bare bones and only hire someone who truly loves your company and your mission. But the best startup advice on the subject of scaling and hiring comes from Workable, who suggests the following:
- Go for the candidates you think you can’t get, the cream of the crop!
- Make your first 20 hires deliberately, based on what they can add to the organization.
- Understand that you don’t know what all the demands of your business are yet. Hire only those with desire and potential to grow.
- It should go without saying, but find a good culture fit.
- Select someone with soft skills that are a good fit, and can’t be taught.
Selecting the right people is an important and sometimes costly process for any business. However, businesses in startup mode need to operate in perfect harmony making the decision to hire mission critical. Don’t skimp on talent to cut corners for the next big piece of technology or iconic swag. If you’re already scaling your startup, odds are you should be thinking about what it takes to get the best talent, and in what ways can you reduce or change your current assets to make that happen.
Susan French is a writer, contributor and content marketer who publishes her own blog, Marketing and Murder. Susan’s greatest successes include a fruitful 10+ year career in marketing and outside sales, as well as a master’s degree in a liberal arts field and just being Mom to her young daughter.
