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Myths
and realities of entrepreneurship
Misperceptions
about what it takes to launch your own venture abound, says
Professor Barry Merkin. He sets the record straight.
Myth: Venture capitalists fund startups. Fact:
Less than one percent of all new businesses are backed by
venture capital.
Myth:
Access to capital is required for a startup. Fact:
More than 80 percent of new ventures are boot-strapped
from personal savings, credit cards, second mortgages and
the like. The median start-up capital is about $10,000. Waste
Management began with a single truck; Sam Walton started with
$5,000.
Myth:
Someone will steal my idea. Fact: Someone probably
already has your idea. And your next one.
Myth:
Being first to market is important for success. Fact:
Being first to execute well and delight customers is
important for success. Quicken was No. 28 to market.
Myth:
Most successful entrepreneurs take huge risks in starting
their companies. Fact: Most successful entrepreneurs
concentrate on minimizing risk.
Myth:
Most successful entrepreneurs start their companies with
a breakthrough invention, usually technological. Fact:
Most successful entrepreneurs succeed by exceptional execution
of ordinary ideas: See Jiffy Lube, Starbucks and Charles Schwab.
Myth:
You have to start a company to be an entrepreneur.
Fact: Successful entrepreneurs use their innovative passion
in many ways, such as buying companies, creating new ventures
within larger companies and re-strategizing nonprofits.
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