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Opinions expressed by Contractor the contributors are theirs.
Some entrepreneurs forget that they need an innovative business model and an innovative solution to successfully start up. Inventors alone, or business gurus alone, generally fail. You really need a pair of complementary founders to improve the odds. That’s why I say “two heads are better than one” in a startup. Consider the original founders of Apple and Microsoft as examples.
Michael E. Gerber commemorated this concept many years ago in his classic book E-Myth, which postulates that most startups are launched by entrepreneurs with technical skills rather than commercial skills, which leads to a high failure rate. Since the two skills are required in equal quantities to succeed, the failure rate of the sole founder today far exceeds 50%.
Related: How To Survive The Storms Of A Startup
As an angel investor, I certainly see continued evidence that this phenomenon has not changed much in the past two decades. Technologists, in particular, who spend most of their time working in the business rather than on it, still harbor several myths that contribute to their frequent disappearance:
1. “Great technology will lead a successful business.”
In fact, customers and investors often avoid the perceived high risk of innovative technology locations. Customers don’t like new learning curves or unstable solutions. Early adopters love new technologies, but mass market customers want solutions, not technology.
2. “If we design a great product, investors will find us.”
Technologists forget that investors buy part of the business, not the product. Each solution first needs a sales team that knows how to market, distribute and support the product. Investors want proof of a real business model and customer revenue, as well as a product.
3. “Commercial work should not begin until after the end of the product.”
Business experts recommend that entrepreneurs start their marketing to confirm that they have a real customer interest and an attractive product concept. Plus, good marketing and support plans can take as long as product development. Do both in parallel to be up to date.
Related: 50 Steps Every LikendisLike Must Take to Start a Business
4. “Marketing is a necessary evil to sell weak solutions.”
In today’s world of information overload, everyone relies on marketing and social media to find solutions tailored to their needs. Even the best technical solutions often fail due to a lack of good marketing. For innovative solutions, marketing is the education that consumers need instead of the experience.
5. “Paradigm shift solutions have no competition.”
The real competition for a new paradigm is the old paradigm. The first aircraft faced significant competition from trains and automobiles. If there is no competition, investors see no market, that is, no customers, slow growth and high marketing costs. Mention the paradigm shift only with other technologists.
6. “Free solutions are the way to quickly build critical mass.”
For many customers, free does not imply any real value for the brand, loyalty is therefore low and support costs can still be high. So, you need deep pockets or generous investors before advertising or alternative revenue streams can take effect. Premium pricing with exclusivity is often a better business strategy.
Each investor first seeks an entrepreneurial perspective that includes understanding how the business works, and then how the solution works. The sales work required includes the long-term people and process growth associated with marketing, sales, distribution and customer support, as well as product costs, support and follow-up plans.
The best entrepreneurial prospects go far beyond technology and profitability, in an integrated vision of the world where the satisfaction of a customer need leads to the greatest good for the environment and society. They provide a personal legacy, satisfaction and happiness. The challenge is to maintain a balanced vision between internal and external business drivers.
Social media and the Internet are great channels for testing your balance and overcoming the myths and prejudices that we all carry as founders of startups. I recommend more time to build the right team and the best company with the best solution will evolve naturally. Finally, make sure that your investor story is as strong on the business elements as on the solution.
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