Pitching to investors, hiring many programmers, and buying ping pong tables is not the only way to build a business.
There is no doubt that we live in an era where the idea of startups doesn’t get questioned; therefore, it is easy to get caught with the flow.
It’s today more normal then it has ever been before that a way to build a business is by opening PowerPoint, creating a pitch deck, and showing it to investors.
That’s not unusual; the news, social media, books, entrepreneurs on Instagram, have hyped things up to the point where the getting fast rich, by building a successful startup is the only “normal” road left to build a business.
There’s nothing wrong with the word Startup itself, any newly established business, or the process of setting something in motion is a startup.
But the problem is with what we have associated it with, raise as much capital as possible, waste it all, get more and spend more until you one day figure a way out on how to turn a profit or make an exit out of it.
In the startup world, revenue is never an issue; it’s almost a heaven on earth for businesses, a place where you can convince other people to give you money so you can waste it until you figure out a way to make your own.
It’s a place where the laws and physics of a real business don’t apply.
The problem with this fancy place is that for some people and businesses, it works; take for example Airbnb, Instagram, Pinterest, Linkedin, Uber, Snapchat, WhatsApp, Twitter, Facebook; and many more that have relatively succeeded in terms of turning a profit and scaling up remarkably.
These success stories are only part of the story. The other part is that almost 90% of all startups fail, according to Harvard business school.
Getting caught in the startup bubble without thinking carefully about the possible outcomes, it will result in a stress factory. And, in many cases, a cause for failure.
The truth is that any business, no matter new or old, is limited by the same set of pressure by market forces. Revenue in, expenses out; you need to turn in a profit. Startups overall try to ignore this reason, and sometimes ignoring it works, but that is just a small part of the story.
Anyone who has the attitude of; We will one day figure out in the future how to make a profit is being ridiculous. It would be best if you worried about turning a profit before you even start your business. It’s like building a rocket ship, but pretending gravity doesn’t exist.
Without a clear path to profit, the business is not a company. It’s just a hobby.
1. Make your definition of success
Don’t get caught with the flow; determine your success. How big do you want your product to be, how many customers do you want to handle, how many employees?
Clear your mind from the external distraction, set your ego aside, and think in terms of what will make you happy; instead of what will impress people.
2. Start a real company
Acknowledge the path of building a real company, growing organically, thinking lean, and dealing with practical things like bills and payroll. Worry about profits from day one.
When you take this path, don’t mask problems by saying it’s OK; we are a startup. Act like a real business, and you will have much better luck at succeeding.
Startups accelerate innovations, they can give a higher chance of success, crazy ideas are welcome, and money travels faster with this approach.
But when you decide to build a business, it’s essential to know that a startup path is not the only road to a successful business.
A startup path is just an approach. There are countless others. And the way to correctly choose a route is to decide what you want with your business.
What effect do you want it to have on your life and in the world? How much control are you willing to give up, does your dream require $100M or is $5.000 just enough for now?