For most of us, an entrepreneur is associated with a young, restless person who is working on a unique idea with a group of close friends.
But, if we look at the statistics, not a single aspect of this sentence coincides with the typical entrepreneur. The main reason for such misunderstanding is the fact that most widespread stories are actually about the exceptions and not the standard. Taking the widespread stereotypes as the norm is such an unconscious process that even big investors fall for it.
The good news is that we have data collected about entrepreneurship to help us better understand what stands behind our misconceptions.
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The average age of successful entrepreneurs is 45
It is a widespread assumption that startuppers should be students or people in their 20s at least. In reality, the experience is just as important in this field as in any other (if not even more). According to a study by MIT, the average age of a successful entrepreneur falls on 45.
It turns out that such misconceptions go way beyond normal citizens’ minds. As Paul Graham, one of the founders of Y combinator tells us:
“The cutoff in investors’ heads is 32. After 32, they start to be a little skeptical.”
The reason for such belief comes from the well-known divergences from this data: Steve Jobs was 21 when he founded Apple; Mark Zuckerberg and Bill Gates were both undergraduates. It is more appealing for us to imagine young people as founders than more experienced grown-ups.
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Successful startups are mostly made up of family members and not friends.
Starting a business with a best friend has been our dream at some point in our lives. What can be better than working with a guy you share your unforgettable memories with? And, we do have such success stories too, but it appears that’s rarer than we think. In reality, starting a business with family members stands on much stronger trust and persistence than with anyone else. A professor at Wharton School of Pennsylvania University, Ethan Mollyck, and his colleague Jason Grinberg analyzed thousands of founders and found that most of them were made up of family members. On top of that, a research paper by a Switzerland-based global wealth management company Credit Suisse says that such businesses are very oriented on solving ecological, social, and governmental issues. What more, 60% of family-owned companies increased their profits by more than 5% in the year 2018.
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Behind the successful projects are very unsuccessful ones.
Many first-time startupers go back to their full-time jobs after their first unsuccessful project. They believe that if the first business fails, it’s not for them. In reality, only a few get lucky enough to succeed on the first try. Entrepreneurship is made up of many details. Experience in the field is a very important advantage, and nothing makes you more experienced than practice. Just because stories about failure don’t reach us it doesn’t mean they never happened.
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Before Linkedin, Raid Hoffman was working on SocialNet. The platform was created to help people find business and love partners. It isn’t hard to guess why the project failed: people didn’t quite understand what they had to use SocialNet for. Then the Linkedin happened, and it became a place solely for business relationships.
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Evan Williams, the co-founder of Twitter and Medium, once worked on a podcast platform called Odeo. They stopped the development of the project when Apple’s iTunes came out because they knew they wouldn’t be able to win them over. This hasn’t stopped Evan from starting two successful companies later on.
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Amazon tried to add a home delivery service for products to his list of services, called Webvan. When they decided to go broad, the project failed. In a couple of years, Amazon got back to the idea and created HDS.
We can bring a lot more examples. All of them, actually. This is probably the most false idea about entrepreneurship on the list.
-
The majority of founders are programmers and not business school graduates.
Apart from the fact that engineers can bring their ideas to life on their own, it turns out that technical background prepares them well for entrepreneurship too. A research paper called “Revenge of the nerds” shows that three times more data engineers end up becoming successful CEOs and founders than business school graduates.
-
Idea is not everything
As Jeron Paul, a successful entrepreneur points out:
“An “A” startup idea with “B” execution is a “C”;
A “B” startup idea with “A” execution is an “A”.”
The main challenge is realizing the idea. Every one of us has one, actually, but only a few have the determination and motivation to actually do it. Many believe that good ideas sell good. The reality is that people buy ready-made products only.
-
A successful idea doesn’t have to be unique.
The Wharton University senior fellow Sarah Kaplan found in her research on Nanotechnology patents that novel and economically valuable projects were the most expensive. She also found that such patents made up only 1% of all types.
When Jeron Paul analyzed 100 unicorn startups for his article on how to come up with business ideas, he found that only 16% of them were globally novel.
It is true that both researches shows that novel ideas are worth much more but they also show that it is a rare occasion. On the market, we mostly see variations of existing models or its duplicates in different fields and locations. The world is a big place. One company can’t be enough for everyone. So, if you couldn’t come up with a unique idea, don’t give up just yet. There are many others like you and what they did is they took others’ ideas and made them their own. Remember the previous point. Execution counts for more than uniqueness.
If you’re interested in how to find an interesting startup idea, here we’ll share with you some of Paul Graham’s and Jeron Paul’s advice.
-
Entrepreneurs spend a lot more time working than employees.
Many think that when they own a company, time is in their hands. Unfortunately, everything is the other way around - time becomes your enemy. The end of working hours is no end for a startupper. Management needs a lot more responsibility than fulfilling a given task does. This seems quite intuitive, but often founders forget that because no one’s there to remind them and no one controls the quality of their work either. We see this often in Georgia. If you’re serious about entrepreneurship, remember that you’re adding more work to yourself. The upside is that you do what you love because you love it. As Lori Greiner, one of the investors of the shark tank business reality show puts it:
“Entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a week.”
7 common misconceptions about entrepreneurship
24 August 2020For most of us, an entrepreneur is associated with a young, restless person who is working on a unique idea with a group of close friends.
But, if we look at the statistics, not a single aspect of this sentence coincides with the typical entrepreneur. The main reason for such misunderstanding is the fact that most widespread stories are actually about the exceptions and not the standard. Taking the widespread stereotypes as the norm is such an unconscious process that even big investors fall for it.
The good news is that we have data collected about entrepreneurship to help us better understand what stands behind our misconceptions.
The average age of successful entrepreneurs is 45
It is a widespread assumption that startuppers should be students or people in their 20s at least. In reality, the experience is just as important in this field as in any other (if not even more). According to a study by MIT, the average age of a successful entrepreneur falls on 45.
It turns out that such misconceptions go way beyond normal citizens’ minds. As Paul Graham, one of the founders of Y combinator tells us:
“The cutoff in investors’ heads is 32. After 32, they start to be a little skeptical.”
The reason for such belief comes from the well-known divergences from this data: Steve Jobs was 21 when he founded Apple; Mark Zuckerberg and Bill Gates were both undergraduates. It is more appealing for us to imagine young people as founders than more experienced grown-ups.
Successful startups are mostly made up of family members and not friends.
Starting a business with a best friend has been our dream at some point in our lives. What can be better than working with a guy you share your unforgettable memories with? And, we do have such success stories too, but it appears that’s rarer than we think. In reality, starting a business with family members stands on much stronger trust and persistence than with anyone else. A professor at Wharton School of Pennsylvania University, Ethan Mollyck, and his colleague Jason Grinberg analyzed thousands of founders and found that most of them were made up of family members. On top of that, a research paper by a Switzerland-based global wealth management company Credit Suisse says that such businesses are very oriented on solving ecological, social, and governmental issues. What more, 60% of family-owned companies increased their profits by more than 5% in the year 2018.
Behind the successful projects are very unsuccessful ones.
Many first-time startupers go back to their full-time jobs after their first unsuccessful project. They believe that if the first business fails, it’s not for them. In reality, only a few get lucky enough to succeed on the first try. Entrepreneurship is made up of many details. Experience in the field is a very important advantage, and nothing makes you more experienced than practice. Just because stories about failure don’t reach us it doesn’t mean they never happened.
Before Linkedin, Raid Hoffman was working on SocialNet. The platform was created to help people find business and love partners. It isn’t hard to guess why the project failed: people didn’t quite understand what they had to use SocialNet for. Then the Linkedin happened, and it became a place solely for business relationships.
Evan Williams, the co-founder of Twitter and Medium, once worked on a podcast platform called Odeo. They stopped the development of the project when Apple’s iTunes came out because they knew they wouldn’t be able to win them over. This hasn’t stopped Evan from starting two successful companies later on.
Amazon tried to add a home delivery service for products to his list of services, called Webvan. When they decided to go broad, the project failed. In a couple of years, Amazon got back to the idea and created HDS.
We can bring a lot more examples. All of them, actually. This is probably the most false idea about entrepreneurship on the list.
The majority of founders are programmers and not business school graduates.
Apart from the fact that engineers can bring their ideas to life on their own, it turns out that technical background prepares them well for entrepreneurship too. A research paper called “Revenge of the nerds” shows that three times more data engineers end up becoming successful CEOs and founders than business school graduates.
Idea is not everything
As Jeron Paul, a successful entrepreneur points out:
“An “A” startup idea with “B” execution is a “C”;
A “B” startup idea with “A” execution is an “A”.”
The main challenge is realizing the idea. Every one of us has one, actually, but only a few have the determination and motivation to actually do it. Many believe that good ideas sell good. The reality is that people buy ready-made products only.
A successful idea doesn’t have to be unique.
The Wharton University senior fellow Sarah Kaplan found in her research on Nanotechnology patents that novel and economically valuable projects were the most expensive. She also found that such patents made up only 1% of all types.
When Jeron Paul analyzed 100 unicorn startups for his article on how to come up with business ideas, he found that only 16% of them were globally novel.
It is true that both researches shows that novel ideas are worth much more but they also show that it is a rare occasion. On the market, we mostly see variations of existing models or its duplicates in different fields and locations. The world is a big place. One company can’t be enough for everyone. So, if you couldn’t come up with a unique idea, don’t give up just yet. There are many others like you and what they did is they took others’ ideas and made them their own. Remember the previous point. Execution counts for more than uniqueness.
If you’re interested in how to find an interesting startup idea, here we’ll share with you some of Paul Graham’s and Jeron Paul’s advice.
Entrepreneurs spend a lot more time working than employees.
Many think that when they own a company, time is in their hands. Unfortunately, everything is the other way around - time becomes your enemy. The end of working hours is no end for a startupper. Management needs a lot more responsibility than fulfilling a given task does. This seems quite intuitive, but often founders forget that because no one’s there to remind them and no one controls the quality of their work either. We see this often in Georgia. If you’re serious about entrepreneurship, remember that you’re adding more work to yourself. The upside is that you do what you love because you love it. As Lori Greiner, one of the investors of the shark tank business reality show puts it:
“Entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a week.”