Aytekin Tank, the founder of JotForm, has a great article on Medium. But it’s rather long, so I’m going to condense it for you. And the title Why startups are dying left and right is rather misleading, as the article is more about how myths can mislead founders. But here are the myths and what Mr. Tank calls the truths, which I’ll annotate.
Myth: I need outside funding if my startup is going to be successful.
Truth: Actually, you don’t have to take on investors. Ever.
Yep, the best way to finance a startup is with customer revenue. Whenever you take investor money you start losing control. As just as the best film directors want the “final cut” on their films to preserve their artistic vision, so too should founders preserve their business vision. The term for starting a company without any investment is bootstrapping. It’s the best way to start a company, as it’s the best way to preserve founders’ rights and control of their ventures.
Myth: Success is reserved for those who hustle the hardest.
Truth: Being excited about what you’re doing isn’t a bad thing. Being too burned out to enjoy life is.
Startups are a marathon, not a sprint. Attempting to sprint through the years it takes to run the startup marathon will result in one thing: burn out. That doesn’t mean you are going to work bankers’ 9 to 4 hours. But it does mean you need to balance your work life and your personal life. Because giving up the latter is going to have a very negative impact on your effectiveness on the former.
Myth: Following my passion is the only way to be successful.
Truth: You can pursue a problem instead.
What I’ve found out the hard way with startups that failed was that not enough other people shared my passion! That’s why finding a problem that a lot of people share and then building a solution they are willing to pay for is the best way to start a company.
Myth: To be successful, I have to reach millions of users quickly.
Truth: Profit is the only metric that actually, truly matters.
This myth is one from the consumer market. You don’t need millions of users in an enterprise market. But in both B2C and B2B markets you need to avoid vanity metrics like page views, monthly downloads, and other proxies for the one metric that really counts: paying customers.
Myth: I have to focus 100 percent on my startup from the day it’s founded.
Truth: You don’t have to quit your day job just yet.
The latest founder meme is the side project. Side projects are nothing more than ventures you start without quitting your day job. There are a number of successful startups like Craigslist, Trello, and Product Hunt that began as side projects for their founders. Side projects tie in nicely with bootstrapping. By starting as a side project you can build up cash to finance your ability to bootstrap. You can quit your day job when you have attracted enough paying customers to your side project to become self-supporting.
Myth: A big staff means my startup is successful.
Truth: Growth should be deliberate.
This myth is one of my pet peeves, probably because I fell for it. All the pre-revenue founders I knew when I was in the startup scene were always talking about how big their staff was, what great people they had just hired, and how their headcount was growing rapidly. This is totally the wrong focus! Founders need to focus on customers, not on staff. Staff are costs, customers are revenue. Which do you think is more important? It is so easy to hire, but far harder to recruit paying customers. Keep your eye on the customer and only hire when the need is really painful. Then wait another two weeks.
Truth: Success doesn’t happen overnight. Not the real kind, anyway.
The startup media are entranced with overnight success stories, just as is the media that covers Hollywood. You’ll almost always find that overnight movie stars and overnight rock stars have actually been working away in obscurity for years. The same is true for the majority of ventures. Don’t get blinded by the media glare of the 1% of the 1% of companies that seem like overnight successes. It’s yet another distraction.
And that’s the issue with all these myths about startups: they all distract the founder from what business maven Peter Drucker defined as the purpose of a business.
Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.