What are Some Common Incorrect Adages in the Business World?
So many to choose from that deceive people and can even cause the failure of a company. Here are just a sample:
1. Your “idea is worth millions”. There is no such thing. As by definition, anyone can steal an “idea” and do it better, with more capital and/or a better team. Anyone with just an idea will not raise any capital. You need a team, plan, traction. Even a patent (exclusive on the implementation of an idea, not an idea) only gets 5% royalty. The other 95% goes to the people who invest and execute. How many people had the idea of the electric car before Elon Musk started growing Tesla? There were hundreds of competitors to Facebook, and almost any other company you can name. But only the few that do everything right will survive the Darwinian world of the marketplace.
2. Anyone can start a company - We have a new company failure rate of over 85%, and a new product failure rate of over 90%, because people greatly underestimate the experience needed to be successful launching a new company or product. You should have 5+ years management experience and 10+ years total experience before starting a company, even with a strong cofounder. If you don't have that practical experience, work for others longer or plan on a more experienced cofounder. Check out the free mini-course link below.
3. Raising capital is easy - Nope! Only a few percent of people that try to raise outside capital will get it. The headlines and big deals go to the few experience entrepreneurs that already made people money in another company or had strong traction (and hence minimal risk) because they have already proven most elements of their business model with product built, sales, marketing cost and process quantified, and repeatable processes of all these. And, of course, have some sustainable competitive advantage.
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4. People like Gates, Branson, Musk and Bezos were quickly successful. Nope again! All took many years developing their experience and struggling with long work hours and lots of failure along the way before succeeding. Look at almost any success, and you will find the founders learned hard lessons for years in other ways, or in that company, before reaching any good cash-flow to scale. And they all hired more experience staff where they lacked skills.
5. Leaders and entrepreneurs are born, not made - Wrong! With the right investment in learning, focus and raw intellect, anyone can become an entrepreneur. However, for some it may be more difficult. Personality, risk appetite and other factors will make you more or less suited.
6. Being an entrepreneur (your own boss) gives you freedom - The fact is, you need to plan on five or more years of long hours to establish most companies. Expect 60-hour weeks for three to five years.
7. I can do it alone - Same as #4. Look at the teams behind the face of the company. You cannot build a skyscraper alone, nor a large business. You need a strong team. No one ever built a valuable company alone without investing in a management team. Just like no one ever built a skyscraper alone. It is literally not possible - just a myth the naive press spreads to sell newspapers with an "instant success, hero story". Sells newspapers and clickbait to hype everyone's dreams.
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Now, the CEO does not need to be expert at everything, but at least thirty skills will be needed to build any significant company. And it could be many more. This expertise is needed on a team, and the CEO needs to understand how to manage each area, including knowing when someone else is good at a critical skill to hire the right people. That is easily said, but requires many years' experience to do well.
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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.
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