One of the craziest trends to emerge in the entrepreneurial world in recent years is the popularity of launching a "startup". There's so many things wrong with the startup concept, as it's built on a fantasy. If you're thinking of launching a startup, don't do it. Just don't do it. Here's what's wrong with the whole premise:
Your startup is not going to be the next Uber/Facebook/Groupon/etc. - It's not. You have a greater chance of winning the lottery than your startup becoming the next Amazon. There was a time, back in the old days of the internet, when a more level playing field existed, and it was possible to build and scale something of mythic proportions. No more. There's too much noise out there nowadays, and too much competition from the big brands. Which brings up the next point...
You don't have the budget to compete - Unless you've been in it, you have no idea how much it costs to scale a venture, get your brand message out there, acquire users, and retain them, competing with brands whose budgets dwarf yours. You need a minimum of hundreds of dollars a day to compete on social media, to even make a dent in your growth goals.
You're not going to attract venture capital - Hey, I get it. It's the be-all, end-all fantasy, right? Attract the huge VC money to your brilliant idea, and everything will figure itself out. You won't have to worry about those pesky things like cash flow and profitability if you can just get the right investors on board, who are going to provide you millions of dollars, along with perks like cool new offices stocked with ping pong tables and the trendiest craft beers on tap... But it's not going to work that way. First of all, VCs won't even look at you unless they believe your startup has the potential to scale to at least $50 million in revenue within 5 years. Don't waste your time with pitch decks, VC panels, and all that nonsense. It's not going to happen.
Instead of running in circles with "startup" fantasies, work on building a business.
How is that different?
A business involves a product or service that a customer wants to buy from you, at a profit to you. Period. Find a product or service that you think someone might buy from you. Do it by testing the market in as minimal a way as possible. Sell one widget to someone on Craig's List, for example, aiming to do it at a profit. If that goes well, sell another one. Rinse and repeat. You now have a viable business model. Scale from there.
A profitable business has a better chance of sustaining over the long term, allowing you to own more and be more independent than if you would be if you were indebted to venture capitalists. VCs would own the majority of what you built, if you were one of the few lottery winners to even get that far. Wait, you didn't know that? That's the price you pay for all of that VC money. If you actually succeed in scaling on a massive level... They own the controlling shares of the house that you built, not you.
Don't waste time trying to launch a startup. Launch a real business instead.
Like what you read? Join my completely spam free mailing list! Just type your email address in the box and click the "create subscription" button. You can opt out at any time. Thanks!