Google recently conducted a survey to see what young people think about popular brands. It turns out that brands with an entrepreneurial story behind them are considered the coolest.
Companies with cachet among the younger generations included Tesla, Facebook, Apple and Airbnb. Millennials and Gen Zers (the cohort younger than millennials) admire enterprising technologists like Elon Musk and Steve Jobs for their success inventing tech that has reshaped the world around us.
Though youth imbues a sense of possibility but inexperience blinds youth to the realities of entrepreneurship. Below are seven misconceptions young people have about entrepreneurship. Being aware of these will help budding entrepreneurs to establish more successful companies.
1. Education and tech entrepreneurship are incompatible
Steve Jobs, Mark Zuckerberg and Bill Gates all dropped out of school to start wildly successful tech companies. According to their legends, these visionaries didn’t need a degree in order to create multibillion-dollar businesses. In fact, some might say that their education was a hindrance to their entrepreneurial spirit.
But Jobs, Zuckerberg and Gates are exceptions. In most cases, aspiring entrepreneurs will benefit from lessons learned in the classroom. Readers should also note that these dropouts were stellar, dedicated students (inside and outside of the classroom) until they left academia. Zuckerberg and Gates were such good students that they were able to attend Harvard University.
Related: 9 Top Tips For Young Entrepreneurs
2. Great products don’t need to be marketed
Some have a misconception that great products don’t need sophisticated marketing plans in order to catch on. Young people aren’t the only ones who embrace this misconception, but it seems particularly prevalent among young entrepreneurs, who tend to focus on products instead of marketing.
However, it’s important to recognse that “field of dreams marketing” is exactly that – a dream. If you build it, customers won’t automatically come. The market must be educated about new products, especially when they are disruptive.
Take the iPod as one example. The product itself had been done before. Sony had already produced MP3 players. But the iPod caught on because the product was particularly well executed, and because of a marketing strategy that captured people’s attention.
The slogan “1000 songs in your pocket” was a stroke of marketing genius that helped to propel Apple to new heights.
3. The most successful businesses are based on the best ideas
As entrepreneurs we often believe that the best businesses are based on the best ideas. But in reality, the best businesses are the ones that are able to successfully execute a good idea.
While these two notions are similar, they are not the same. Organisations based on a good idea have the ability to address a real pain point with an acceptable solution. Furthermore, they are able to deploy that solution efficiently.
Simply thinking of a great idea is invention, not entrepreneurship. To be a successful entrepreneur, you must learn the business skills required to bring an idea to market.
4. Smart employees don’t need to be managed
Some young entrepreneurs believe that successful businesses simply need to hire smart people, and the rest will work out somehow.
But even smart people need to be well managed. Take Google as an example. In 1998 Google co-founders Larry Page and Sergey Brin hired Eric Schmidt to become the company’s CEO. Page and Brin realised that the organisation would need experienced leaders in order to succeed.
Schmidt ensured that Google had a solid layer of management in place to keep Google’s smart employees on track.
5. The customers don’t know what they need
In some instances, entrepreneurs have been able to start successful businesses by ignoring customer feedback. When Apple was developing the iPhone, most consumers would likely have asked for a smartphone with a better keyboard or a bigger screen. But few could have conceived of the revolutionary device Apple created.
However, while some entrepreneurs are able to develop a product or service that transforms consumer expectations, in most cases, listening to the customer is essential when developing a new business.
6. Success will come quickly or not at all
Young people look at entrepreneurs like Brian Chesky, who was 26 when he co-founded Airbnb, and assume that success will either come early in life, or not at all. But the reality is, success often takes time to materialise.
As mentioned earlier, thinking of a great idea is just the first step in creating a successful business. Execution of that idea is often the most important component of success. But learning important business skills requires years of experience, which is why success often takes longer than expected.
7. Older people aren’t innovative
It’s a misconception as old as time: older people aren’t innovative. The reality is that every successful business relies on a combination of innovation and experience to succeed. In order for your business to move from a great idea to great execution, it will require all sorts of skills, and some of them can only be acquired with time.
Young entrepreneurs often look to a handful of hugely successful companies as evidence that entrepreneurship should take a certain form. In reality, entrepreneurship is more amorphous. Once young people set aside misconceptions about what it takes to launch a successful business, they will be more likely to develop a business that performs well.
This article was originally posted here on Entrepreneur.com.
Build Solid Back-Room Basics For Business Success
What do South African entrepreneurs really know about what goes on behind the scenes building of businesses?
South Africa has a vibrant start-up culture with great ideas starting out with a bang, but closing down with a whimper because entrepreneurs picture the glory at the destination, but not the nitty gritty of the journey to get there.
Be smart about scale
When I started out, I literally did everything myself. I negotiated and signed leases, I arranged the furnishing for our apartments and managed the interior décor process. When guests started using our apartments, I signed them in at reception, and then carried their bags.
At that stage, there was no money in my business to pay for attorneys, interior designers and decorators and there certainly wasn’t enough money for porters.
However, when we got to 70 apartments, it didn’t make sense for me to be a porter any longer, so I hired someone to do that job, explaining clearly what I expected of him. Before I did that, though, I spent time designing incentives for him so that he would be more affordable for me, and so that he could earn as much money as possible.
Related: Training Is A Two-Way Trick
Know your talents – and your limitations
There are certain things I’m really good at, but I know without a doubt that sales isn’t one of them – and without sales, you don’t have a business. I couldn’t afford a top-flight salesperson, but I knew that I could attract the right talent with the right business model. I set some high targets for Pamela Niemand, but offered her one third of the business if she met them. We both won: she earned a share in a successful, trend-setting business, and my trend-setting business became successful!
Use your skills – but know when to hand over
My background in corporate finance meant that I had all the accounting skills I needed when we first started out, but I knew that the time would come when I would need someone focused on that side of the business full time. Doing it all myself first meant that I could brief my first full-time accountant clearly and with a deep understanding of what would be required – and that I could help that person find and fix any challenges based on my experience.
In summary, my simple advice to anyone starting out would be to bootstrap your business yourself without investors or staff for as long as you can, but don’t over-extend yourself. Know when to delegate tasks away so that you can focus on what you’re really good at – but don’t do it before you have a solid understanding of what’s required. Know what you’ll never be able to do, and bring in that resource from the beginning – but do it based on performance-based incentives, so that your fledgling business doesn’t lose out if your early hires don’t perform.
The Myth About The Relationship Between Entrepreneurs And Taking Risks
This is the true relationship between entrepreneurs and the apparent illusion of risk.
“I can’t be an entrepreneur or start a business. I don’t have the appetite for risk.” This line is spoken regularly to brave few that leave the perceived safety of a job, take the plunge and venture into the unknown world of being an entrepreneur. However, there is a gross misunderstanding in the appetite for risk that entrepreneurs are believed to have innately inside of them.
The little-known truth is that the majority of entrepreneurs don’t like taking risks and according to Luca Rigotti and Mathew Ryan in their paper that explores a model for quantifying risk and its translation into enterprising action, the results were very interesting.
Risk is explained by these theorists as taking action where the outcomes are unpredictable as well the factors leading to that outcome are unknown. One of the theorists in this area, Saraswati, who coined the term “tolerance for ambiguity” has a more accurate description of what the outside world deems taking a risk.
In simple terms, entrepreneurs don’t go head-first into the shark infested water because they like the idea of danger and potentially being eaten alive; or the thrill of being able to say that they survived whilst others perished in a pool of maimed flesh. They carefully calculate that the sharks have been fed recently, some of the sharks are ragged tooth sharks that whilst looking like they are set to devour a human being, are actually incapable of opening their jaws wide enough to bite. For those sharks that still have space or who smell blood and can’t resist the urge to kill, the entrepreneur has a cage set up that he can retreat into quickly and a knife with which to protect himself.
Tolerance for ambiguity is the careful evaluation of what is known at the moment where a decision must be made and an open-mindedness for what is not known. This, coupled with the agility to change course when new information is presented, has earned the label of high risk appetite. The appetite is not for the risk, but it is the ability to move down a path, when all the information is not known.
I likened it to a person moving around in the dark holding a candle. The candle casts a light that illuminates a limited parameter around the person holding the candle. What is beyond the light that the candle casts, is unknown and potentially a risk. But as the person moves forward, the light reveals what was unknown and in the shadows. As the light reveals new information and new challenges added to what they have already learnt, the person can make better informed decisions. The tolerance is in not knowing what lies in the shadows yet to be illuminated by the candle and then the confidence in his or her own ability to act on what new information is discovered.
None of this behaviour is risky or irresponsible. There is careful consideration for what is known and a tolerance for what is unknown. And once there is more information available, a calculated next step is taken and more information is assimilated into what is now known. This is the true relationship between entrepreneurs and the apparent illusion of risk.
7 Skills Every Entrepreneur Needs To Adopt Today
Want to know what skills can help you build confidence and your business? Here are seven…
For some people, becoming an entrepreneur is as easy as stepping off a bus. They have a big idea, they bring it to life, they hire employees and the next thing they are in a building smothered in branding and living the business dream. For others, the idea and the passion are there but they are unsure as to how they can make these into a sustainable reality. Entrepreneurial spirit isn’t like instant coffee – you don’t add ideas and suddenly get all the skills you need to thrive.
Want to know what skills can help you build confidence and your business? Here are seven…
1. Believable vision
Make sure that your vision is believable and achievable. It has to live in the realms of possibility, not as a blue-sky idea that looks good on paper but wouldn’t work in reality. You need to be able to live this vision so make it realistic and achievable. This will not only keep you on track, but your employees as well.
2. Be inclusive
You need to ensure that every person who works with you feels as if they are part of your vision and understand it. They need to relate to where the business is going and how it plans to get there. Many leaders don’t understand why employees are not engaged with their business and it’s because many of them don’t actually understand what the business does.
3. Communication is critical
If you don’t have fantastic communication skills, then now is the time to hone them. When it comes to building employee morale, commitment and engagement, nothing works as effectively as constant communication. The same applies to client relationships. You need to repeat the vision and ethos of the company at every opportunity and you need to be part of the team that does this communication.
4. Be visible and transparent
You are communicating, now you need to make that communication genuine by being both open and clear. People respond incredibly well to transparency. They feel as if they are part of something that recognises their value and contribution and it fosters a more inclusive company culture. Often toxic cultures come about thanks to a lack of communication and visibility. People know when things are being kept secret and react negatively to it, regardless of whether they’re an employee, a customer or a manager.
5. Be practical
You aren’t going to build an empire in a fortnight so focus on a realistic and practical business strategy that has clear benchmarks and even clearer goals. Communicate these with the company and keep everybody on the same page. Practical and achievable means long-term success.
6. Build opportunities
As people become immersed in your company and part of its growth they will also need opportunities to grow. You need to tie their careers to the business and create opportunities for them.
7. Be human
It takes people to build a culture, a company and a future. It’s essential that you are human in your interactions and your treatment of others. The impact that a down to earth and authentic attitude can have on a company is extraordinary.
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