Common startup mistake
Many students believe that anyone can start a technology company, all they need are a good idea and some technical skills, just like some “startup experts” have encouraged them: “Just do it.”
The fact is there are many failed startups all over the world because of this belief. There are many “want to be” entrepreneurs lost money and their family’s money. The common mistake is they all have an idea then start the company without understanding the needs of the customers or the market. In a hurry to start a company and to satisfy their ego, they spend money to rent an office and decorate it with nice furniture, and hiring staff to work on the product without clearly understand the market’s needs. These people live in “a dream” of being somebody. When things do not happen as they wish, they blame it on luck rather than themselves.
A technology startup is NOT about idea or luck but something that can be taught and learn. An idea alone has “zero” value because anyone can have an idea, but taking an idea into a valuable product that meets customers’ needs requires more than just luck. There are steps that they must do to validate the idea and monitor the market needs, but people still want to “getting rich and being famous,” rather than learn from the mistakes of others.
When teaching entrepreneurship in Asia, students often commented: “But Steve Jobs did not learn from anyone, and he was successful.” I told them: “You are NOT Steved Jobs, so do not even dream of being someone like him. If you are willing to learn from the mistakes of others, you may have a better chance to succeed. Do not listen to the “Hype” from people who called themselves “Startup Experts.” All they want is your money by selling you an illusion.”
Everyone has dreams but to make it into a reality requires a practical idea. Everyone has passion but to make thing happens requires patience and courage. A few years ago, a student told me: “I am the President of a company, I spent several thousands of dollars to build the company and develop a very good product, but do not have any customers yet.” I asked him: “Have you asked the customers on what they need?” He seemed surprised: “Why do I need to ask them? I know what they want, my idea is good, and everybody tells me that is a great idea.”
I told him: “That is a big mistake. You think that you know who your customers are, what they need, but it is your opinion; it is only a “guess” not a fact. Even with a “vague guess,” like that, you hurry to build a product and cannot sell it.”
He argued: “But I had taken several startup workshops. They taught me to follow my passion and do not listen to people who tell me that I cannot do it.”
I explained: “They taught you to start your company using your money, not theirs. They taught you to give yourself the titles of the President of a company to make you look good, and you like that. You believed them because they know your dream and how to sell you “that dream.” And you fell for their “Scam.” Why a student who is still in school like you have a big title of “President,” of a company and an office with expensive furniture and supporting staff? You have not make a single dollar, but you already spent hundred thousand dollars to satisfy your ego. Who is teaching you that?”
He argued: “But to do business, you need an office and support staff ….”
I told him: “Do you know that both Steve Jobs and Bill Gates started their company in a garage and a basement with no furniture? They did not have a fancy office or special titles like President or CEO. Only when their company was successful and went to an Initial Stock Offering, they assumed the title “President” or “CEO.” If you look at all successful people, they all share common characteristics of being humbled. But you do not learn that because you only look at their success, their wealth, and their fame and want to be rich and famous quickly. Some people know that so they sell you the “dream” of being Mr. Gates or Mr. Jobs and you pay them to learn about “startup and get rich quickly.” But instead of making money, you are spending money, and you still believe that you are an entrepreneur?
He seemed embarrassed: “Now I know, but… what should I do?”
I told him: “Here is your assignment for my class. You need to answer the following questions: “Who are the users and customers of your product? Why would they buy your product? What makes your product special than others? What are its key features? What are the business values that the product should deliver? How do you know that your product meets the customers’ needs? Without knowing who the customers are and why they would buy the product, you should NOT start a company. And without being clear on the business values and the customers, it will be difficult to justify spending money on anything.”
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
