10 Common Myths About Starting A startup

People often dream of the great success their company could achieve but hesitate to take the plunge, paralyzed by fears of worst-case scenarios. Whether labeled as myths, stereotypes, or hearsay, these misconceptions are frequently inaccurate and unnecessarily intimidating.??

There are hundreds of challenges a startup can face, especially during its early years. Lack of funding, increased marketing cost, increased customer acquisition cost, infrastructure debacles, etc.?

So to help all the aspiring founders and startup owners make the right decision, we have presented 10 misconceptions and myths about entrepreneurship and startups in India:?

1. Business Acumen is a Must:

A common misconception about starting a startup in India is that you must have extensive business acumen from the outset.? Not everyone knows how to operate a business, let alone knowing how to make good decisions. While understanding how to run a business and make sound decisions is undoubtedly valuable, it's not a requirement for success. Many aspiring entrepreneurs don’t have the luxury of attending business school or gaining substantial experience beforehand.

What truly matters is a willingness to learn and the discipline to acquire the knowledge needed to operate a business as soon as possible. Invest in individuals who not only understand the fundamentals of business but bring expertise beyond the basics. Trustworthy team members with strong business acumen can provide invaluable guidance. At the same time, make it a priority to continuously learn.?

2. Best to Avoid Competitive Industries:

Here’s a way to see something in two completely different ways; an industry where many companies are competing with each other is a risky one to enter. But the same industry with so many startups also means that the demand is sky-high. More competition means more consumers, and of course, more money to make.?

Take the smartphone industry; it has multiple giants competing for the top. It is certainly one of the toughest industries to enter. But now look at the potential of the industry. According to Statista, the smartphone market is set to reach half a trillion dollars in market size!?

So avoiding a competitive industry is not the right move. Entering a competitive industry without any strategy or plan is certainly the wrong move. Using a professional platform like the YNOS Insight you can get a bird’s eye view of the competitive landscape of the Indian business industries. Remember, it is difficult to catch the bigger fish, but definitely worth the effort.?

3. First, Perfect the Product:

A common misconception is that you must perfect your product before launching it. Even with a brilliant idea, your first version is unlikely to be flawless. Most entrepreneurs quickly realize that their initial product isn't the best they can achieve. This awareness, however, can lead to paralysis, preventing them from launching anything at all.

Normalizing the idea that your first attempt won’t be perfect is essential. In the early stages of your startup, being agile and willing to adjust your approach is vital. Adapt your business strategy to the market realities rather than sticking rigidly to your initial concept. This flexibility will increase your chances of success and help you create a product that truly meets customer needs.?

Your first idea is probably not your best for several reasons: the product-market fit isn’t clear, customers may not perceive the problem as you do, or there might be a more promising opportunity requiring a pivot. It's important to accept that your initial idea will evolve.?

4. You Need Crores to Start:

More money does not mean success. There are thousands of companies that had giants backing them up with millions of dollars and they all failed. You do need crores of money in the bank to start a business. Business starts with a great idea and an efficient use of whatever funds you have to run.?

You must have heard of some great companies that are doing business worth crores but started out bootstrapped. Some very famous examples are Zoho and Zerodha. So all you need is a great idea, passionate people working on it, and the sense to use the funds properly. Using the money properly is more crucial than the amount of money you have invested in the business.?

Suggested Reads - What is Financial Due Diligence & its Checklist

5. Funding is the Goal:

Getting funding is a dream come true for many founders, but it should not be an end goal for the company. Any funding is a type of loan and you do not see people celebrating when they have debt. The goal of the startup should be scaling, sustaining, and becoming profitable. These are the metrics that founders should be concerned about, not how much money they can raise.?

Surely, funding allows the business to focus on these aspects and hence, grow in the long run. But if the interests of the founders are only towards securing larger funding and greater popularity, they will always be stuck looking for money and not growth.?

6. Loans are Bad:

Running a startup needs money, even when the startup is getting successful. Money is the fuel that is essential for the vehicle of the startup to move. But here’s the important thing that many entrepreneurs miss; no matter how much fuel you have, using it efficiently ensures a great run.?

One of the ways of acquiring money for a startup is by taking loans. This is sometimes very difficult for founders as the term loan or debt financing can have negative connotations. But it should not sway away founders from the possibilities loans can have. Sure you need to pay back the amount with interest. But here’s something great; you do not have to give equity of your company to anyone.?

Imagine giving some per cent of the loan amount compared to giving out a substantial percentage of your company. Your company will grow and so will the value of its shares. In many situations, it is better to keep the most of your startup to yourself and get a loan.

Suggested Reads - The Advantages and Disadvantages of Debt Financing For Startups

7. Passion is all you need:

Passion is certainly one of the biggest driving factors in the long road of making a startup successful, but it is not the only factor. Passion is one of the factors the founders must have to make it big.?

Many times a passionate founder might assume that their desire to make something great is all to face hurdles and failures. Yes, a passionate outlook is important to shake off the fear of failure and overcome it by getting back in the game. But if you lack other skills, you might find yourself facing failures again and again.?

The recipe for success comes from a mix of analytical and creative thinking, patience in learning new skills, finding talented people who can get the job done, and a ton of soft skills needed to make your startup known. A great cricket metaphor is perfect to explain this situation; a founder must be an all-rounder.?

8. Moonlighting is unacceptable:

For people who are not aware of the term, ‘moonlighting’ is a slang that refers to an employee doing another job unbeknownst to the original employer to make some extra money. Moonlighting is usually frowned upon by employers as they want employees to give their 100% to the company.?

But when you are working for your startup, you can certainly take another job during the early stages of your business. This might be a bit hectic for the founder, but it ensures that you have a steady stream of income to support yourself and your business if needed. So if you can manage your time and even push yourself and put the pedal to the metal, you can manage moonlighting while running your startup.?

9. Being an Industry expert is a requirement:

Yes, starting a business in the industry that you are an expert in is an advantage, but not a restriction. Many talented founders have started businesses in fields they had no experience in and yet they came out strong and successful. The key here is to understand the market and hire the right people to make the right decisions.?

A successful founder takes time to understand the market, the key players in the market, and then what the consumers want. Understanding the gap in the market and then coming up with something that fits is how you can conquer areas you have little to no experience. But this does not mean doing the research will get you across.?

The most important aspect here is to hire the right people who know more about the industry. Talented and knowledgeable people who can steer your company in the right direction are what’s needed to make it successful.?

10. You better hurry:

Many fall into the trap of thinking that meeting deadlines is the key to their success. Deadlines are deeply ingrained in business culture and are often seen as indicators of rapid progress.?

The approach is straightforward: set a deadline, work intensely as it approaches, and then relax once the task is completed. However, this method proves ineffective when tackling innovative and uncharted projects where no manuals or guidelines exist. Rigid deadlines not only fail to enhance productivity but also negatively impact morale.

Now this myth is similar to thinking that speed is everything. Many assume that as a small startup, you must outpace the competition and accomplish everything quickly. However, this mindset often leads to burnout and significant mistakes.

Finding a balance between maintaining a fast pace and not rushing tasks is crucial. One effective strategy is to incorporate deliberate reflection into your workflow. This allows you to assess progress, make necessary adjustments, and ensure that you are moving forward thoughtfully rather than hastily.

Final Words

Starting a business presents a lot of challenges, and we are not just talking about the challenges that pop up when running the business. We are also talking about the challenge of tackling misinformation. The best way to make a business successful is by ensuring that the founders and all the employees of the company are prepared in every way. So bust all the myths and aim for success by taking the right step. And if, by chance, you take the wrong step, continue to be cautious yet persistent.