5 Myths about Entrepreneurs

5 Myths about Entrepreneurs

Dr. Peter Strachan “The 5 Myths about Entrepreneurs

1) The Risk Taking Myth: “Most successful entrepreneurs take wild, uncalculated risks in starting their companies”

True Facts -

a. Risk is part of doing business

b. Professional risk —Most entrepreneurs are not well-established

c. Financial risk —Most entrepreneurs have few if any financial assets

d. Highest risk often comes later in the business, not at the start

e. Most risk is carried by employees, suppliers, customers

2) The High-Tech Myth: “Most successful entrepreneurs start their companies with a breakthrough invention, usually technological in nature”

True Facts - While many of us think of the technology boom and high tech start-ups, the Fortune 500 lists a variety of types of companies. Many successful new businesses found a way to market an existing product in a new fashion or to a new customer base. Think of:

a. Starbucks

b. McDonalds

c. Dell

d. Pantaloon

e. Shopper’s Stop

The key is having the right product at the right time.

3) The Expert Myth: “Most successful entrepreneurs have strong track records and years of experience in their industries”

True Facts -

a. 40% of Inc. 500 founders had no prior industry experience;

b. One-third of Inc. 500 founders were out of work when they started their companies.

Examples:

1. Dato Tony Fernandes and Air Asia

2. Steve Wozniak was an ―undistinguished‖ engineer at HP

3. Donald Trump and the Taj Casino

4. George Quek of Break Talk has no bakery qualification

4) The Strategic Vision Myth: “Most successful entrepreneurs have a well developed business plan and have researched their ideas before taking action”

True Facts -

a. Only 4% of Inc. 500 companies used any sort of system research to develop their business ideas;

b. First attempt is often not the product that eventually brings success (but developing the entrepreneurial mindset at the beginning is the most important)

5) The Venture Capital Myth: “Most successful entrepreneurs start their companies with millions in venture capital to develop their idea, buy supplies and hire employees”

True facts -

ü Only 4% of Inc. 500 companies, and less than 1% of all start-up companies in the US, used venture capital;

ü Founders of Hotmail failed to secure venture capital despite more than 20 attempts;

ü Bill Gates and Paul Allen failed to receive venture capital for Microsoft;

ü Venture capital is dominant in some industries, such as biotechnology