Albeit the great hype in the red hot start-up scene, it has to be acknowledged that start-ups are a subset of business. They too have a 50-50 chance of succeeding or failing. And most importantly, they are not spared from the harsh practicalities that all conventional businesses go through.
In fact, they are more susceptible to challenges and risks simply because the digital environment is a relatively new industry with many new business models. The ultimate failure is so prevalent that Silicon Valley does not only acknowledge it, but also redefines it with a completely new term; Pivot. This has stemmed from the rationale that each ‘failure’ brings about new insights and experiences, reduces the probability of failure for the next try and eventually leads to success.
As much as we celebrate the eventual success on a macro view, the multiple individual failures cannot go unnoticed. How many tries can we really afford? The Singaporean education system is clearly not a fan of failure, what more our society where every dollar and cent is highly valued.
If entrepreneurs launch a startup for any of these reasons below, he has done so for the wrong reasons and is almost doomed to fail.
Escapism – “You’ll work in an awesome atmosphere”
The flexible work schedule is enticing for millennials who have heard horror stories of the 8-5 routine. This escape plan seems even more viable when our media generously splurge success stories, suggesting that this is an easy way out for anyone who dislike the 8-5 life.
Entrepreneurs may be able to control their hours but their working hours are brutal. They are the first to start work and the last to finish. Employees clock out by six and forget about work – entrepreneurs think about their businesses from the moment they wake up in the morning to the time they fall asleep and all the way to the weekend.
Anyone who decides to start a business for flexible time is thus bound to be disappointed by the immense amount of work that comes with setting up a new business.
Identity Crisis – “You’ll have more responsibility”
Many people get frustrated working because of all the red tape and reporting lines they must adhere to in order to get their work or project going. This causes many to wish that they can just launch their own company and ‘call all the shots’.
This desire to do more can actually be detrimental since a good entrepreneur must know how to delegate and manage his time and resources. A founder who ends up doing everything himself can burn out faster and become ineffective in the end.
Sure there’ll be times you have to do it all yourself, especially in the case of the bootstrapped entrepreneur, but you must be clear why you’re doing what you’re doing. Even if you’re doing it because you are bootstrapping it, you must have a plan or at least a co-founder to back you up so the weight of the enterprise does not fall solely on your shoulder.
Peer Pressure – “Because everyone else is doing it”
In the case of start-ups, many people ride on the bandwagon for fear of missing out on this new passport to wealth. They see their friends launching startups, they know it’s easy to launch startups and they read about millionaires being created overnight when their fledging startups are acquired. Hence they may get emotionally carried away and launch a startup just so they don’t get left behind.
Many also unknowingly and unconsciously love the prestige of having ‘CEO’ on their name card. It’s all very well if you know what you’re doing but if one gets emotionally blinded in the process, there could be heartache on the way.
Rather than thinking about the company’s overall welfare, one may be more focused on how the company’s reputation affects his or her own image. For example, because of the founder’s ego, a founder may not pull the plug on his terminally ill company for fear of being viewed a failure. This may lead to prolonged stress and financial woes for the dying company.
Diverse Ideas- “You can launch a lot of things”
Many of the startup ideas today harp on the use of technology to bring about a variety of advantages. What many fail to realise, however, is the fact that an overload of diverse ideas often results in a lack of focus.
Founders with no clear focus on why they are launching their particular startup therefore might be setting themselves up for failure. If they adopt a ‘spray and pray’ strategy – hitting every idea and hoping something will pay off – they risk losing all their investment.
A Penny for Thought
Before embarking on an entrepreneurial career, it’s best one look deep inside to understand one’s motives. The best reason for launching a startup is usually that you have a burning desire to solve a specific problem and you have a solution that you believe in with all your heart. Only such focus and faith will get you far!