The Startup Cult is Redefining Success (And Not in a Good Way)

startup cult

I often joke about the “startup cult” spreading across the world.

The coolness of entrepreneurship is on the rise, but so much of it is compartmentalized into just raising capital, getting some PR and having “founder” as your job title. Not he true nature of being a business owner, leader, and innovative thinker that is required to be truly successful.

While there are amazing organizations all over the world helping startups, sometimes is seems like many of them exist to salve egos, take advantage of wantrapreneurs, and look good on paper from an economic development perspective.

Accelerators and incubators are popping up everywhere, but with so many of the hardships of launching a company accounted for – seed capital, office space, mentors, business networks etc – why is the success rate of these companies not significantly higher than those bootstrapping? What truly is success?

Enter Startup Cult

The vast majority of businesses will never exceed $1 million in yearly revenue, and most currently operating were started with $5,000 or less.

The startup cult I’m talking about encourages and teaches entrepreneurs to raise capital and chase the billion dollar unicorn, but much less attention is spent on how to actually operate a business. Few people want to learn about how to deal with cash flow issues, employee politics, horrible clients, partnership conflict and so on.

Looking back at a decade of serial entrepreneurship, the hardships, rewards and disappointments, it disturbs me to see so many founders obsessed with, and feeling euphoric when, they raise capital. Not getting clients, not achieving growth goals or even making a profit, but getting investors to write them a check.

While a select few will become founders of legend, most will fail and some will become successful on a smaller scale.

What Is Success?

Don’t for a second think I’m saying you don’t have a billion dollar idea, or not to chase the dream. What I’m saying is there are tons of great small business ideas, and just because you “only” turn it into a million dollar company doesn’t mean you failed.

In reality the average household in America makes $54,000 a year with two incomes. Make $100,000 and you’re in the top 10%.

While in the short term it might not be as cool as chasing a billion dollar idea, in reality you have much greater probability of building a $1, 2, 3 million dollar company in a fraction of the time needed to raise capital, get to market, grow, and maybe have an IPO. Is the potential ROI massive, of course it is, but is it smarter to go for the single or double versus a home run?

This goes back to what truly is success? Is it making enough money you’re not worried about paying bills, having freedom to make your own schedule, spend time with family and friends, watch your children grow up, see the world, make a difference?

Or is it being one of the few with more money than you know what to do with, and going down as the Steve Jobs of your era?

What Does Success Mean To You?

It may seem like I’m saying you shouldn’t apply to an accelerator, that entrepreneur centers are a waste of time, not to raise capital or swing for the fences. Nothing could be further from the truth. The point of this article is to inspire entrepreneurs to look at life from a different perspective, and define what success means to them.

This is something you need to think about and let it become a serious foundation of your life. There are many ways to make a difference and to become successful.

Happiness and satisfaction with life is controlled by your own personal definition of success. What is yours?

3 Ways Business Success Requires Being Human

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Let’s face it. In the world of technology we’ve become so obsessed with the latest innovative way to solve a problem and lower human demand, we’ve forgotten these tools are all invented to help benefit our fellow humans.

This has led to significant issues in customer service, company culture, employee loyalty, and company growth. These factors combine to create failures which seem outlandish, but when looked at in depth clearly reveal a lack of baseline humanity.

In an attempt to streamline productivity, we have begun to view these tools as the most essential part of success and not the people behind them. Employees are treated as disposable cogs and not vital pieces of what the company is and strives to become.

So how can we counter this problem and leverage the amazing advancements at our fingertips without ultimately destroying our society?

1. Remember Innovation Requires Imagination

While there is hope that someday artificial intelligence will enable us to be taken care of without having to work, and all issues will be solved without requiring human focus, that day isn’t here yet.

In the meantime, it is essential for us to remember on a daily basis that everything around us in the modern world is a result of human imagination and hard work. From the dawn of time, everything developed has required a reason which benefits mankind. Without creative thought we would still be living in the stone age.

So while we are rapidly creating things which remove the need for human sweat in many areas, we must not forget the new opportunities becoming available just open doors to leveraging the power of our minds. In reality, the demand for creativity may be greater than ever.

Without business leaders creating environments to help spark creativity, the ability to achieve long term success is drastically reduced.

2. Creating A Positive Work Environment

So many people think it’s just about how much you can pay in salary and benefits which controls how productive your company can become. While being able to remove employee financial stress is extremely important, most people will tell you when looking back on life that it wasn’t “the best paying job” which correlated with their happiness and productivity.

It was a sense of belonging. Being valued for what they brought to the table and accepted for who they are as a human being, not just viewed as an easily replaceable tool. Their favorite managers were the ones who listened and weren’t consumed by personal power and ego.

It’s actually quite simple to create this kind of workplace. First as a leader, subjugate your ego. Listen to others and admit you don’t know everything. Second, make sure those in positions of authority below you understand and follow this mindset. Third, reward those with initiative and ambition. While monetary reward is appreciated, in truth that appreciation is short lived. A kind word has more power than what can be bought.

3. Help Others Achieve Their Dreams

So often managers view productive employees as threats to their position. Business owners often fear losing a great employee to competition or entrepreneurship.

These things are just the reality of life and cannot be avoided, but if you have built amazing relationships on a human level, going separate ways can be less painful, partnerships can be created to benefit all parties, or even new avenues to greater success can be revealed.

What if that person comes to you with an idea that could change your business model or provide a new revenue stream? Should you be greedy and implement that idea without reward? While it may pay off in the short term, the next person with an idea will surely hide it from you. By default you have just limited your own success and likely created competition for yourself.

What if they get an offer they can’t refuse and move onto another company? Fast forward 5 years. They are now CEO and want to buy you out. That human relationship you built makes them want to make a fair deal rather than rip you off in desire for revenge.

What if hard times come and you can’t meet payroll, or need your team to rise to the occasion beyond just being a 9-5 employees? If you have created the type of human-to-human relationships and environments discussed, you will be amazed at how they will be there for you when it counts.

Failure and success have very thin margins of separation. Don’t forget this when you find yourself becoming consumed with ways to reduce the need of human capital. Find ways to maximize it instead!

Staying Focused is The Key to Success

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The early years of a startup can be chaotic and desperate. Even a great idea needs capital to get off the ground. In the beginning you need cash, so you chase every opportunity. You say “yes” to anything and everything because you need clients; you need investment; you need to turn your idea into an actual business. You are excited and you want to grow, so everyone who offers you money is a potential client, a potential investor, someone you need.

Unfortunately, every thoughtless “yes” leads you further into a trap. Too quickly you’ll take on too many things. You’ll have differentiated into too many products, options and services in an effort to please anyone who shows even a hint of interest in your company. In a few years, your company is just okay at a whole bunch of things instead of great at a few.

Saying “yes” disrupts your focus.

When you started your business, you probably had one great idea. You knew what you wanted to do, what kind of business you wanted to have. There was a central product, a main service, a particular methodology. You had focus and you were determined. In the rip tide of those early years, hold on to that focus. Keep it in front of you. To be successful and stay focused, you’ll need to do the following:

  1. Choose a business model. Obviously, as a startup, you are going to have to make changes. Adjusting to the environment is a skill that you’ll acquire quickly. But once you have the lay of the land and have seen the various possibilities, it’s time to put together the business model that works for you. Figure out who you are trying to market to, why they’ll want your product, how much they’ll pay for it and how you will get it to them. You might have to do some experimenting, but when you find something that makes sense to you, follow that course.
  2. Pick one or two things to be good at, and stick with them. To be the best, you have to learn and build on your experience. If you keep changing what you do and moving with the whims of potential clients, you’ll never get good enough to be at the top. People will ask for products or services that are just one step away from what you already do. You’ll be tempted, but don’t give in. The slippery slope quickly degrades your business and takes away from your ability to develop and invest in that one thing you know you can do better than everyone else. You believed in your idea enough to start a business; believe in it enough to see it through.
  3. Fire your bad clients. Of all the challenges to focus, this one is the hardest. Once you take on a client, you may feel obligated to continue working with them. But bad clients will suck you dry. They will take advantage of your need for cash; they will cling to you in the hopes that you can do what no one else can: fix them. Look at the ROI. Consider the advantages or benefits to working with these people. If you can’t find the upside, get rid of them. You’re going to survive a lot longer if you don’t let people suck your blood. Focus on your product. Don’t trade excessive time commitments for a little money.

The more opportunities you say “yes” to, the more you lose the value of what you are trying to accomplish. When you are wide-eyed and money-hungry, coach yourself to say “no”; to turn things down when they don’t fit or if they won’t bring in a significant return. Do not take on every opportunity. Stick to what you want to do. Imagine your end goal — what you want your company to look like once you have made it. And above all, stay focused — after all, it’s your business.

 

Ty Morse is the CEO of Songwhale, an interactive technology company focusing on enterprise SMS solutions and Direct Response campaigns, both domestic and international. Since the company’s 2007 launch, Ty has grown Songwhale from 2 people to over 100. A two time Ernst and Young Entrepreneur of the Year finalist, Ty has been featured in the NY Times, Wired, NPR, PBS, and Discovery Channel and published in Forbes, the NY Report, and Geek.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Business Innovation Requires Patience

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Innovation requires patience.

I know that seems counter-intuitive to driven entrepreneurs, but hang on, there is logic behind this statement.

The vast majority of people just don’t have the ability to see future possibilities until they exist and are being used by their peers. This may seem like a degrading statement, but it’s not.

Some people have the ability to see the future possibilities others don’t. Just as often, those who have entrepreneurial vision are totally incapable of turning the dream into a reality.

Accepting this truth as an innovator will give you the patience needed to make sure your vision becomes reality.

Patience With Family & Friends

When you have an innovative idea, especially one that directly impacts your life, frustration quickly grows when you can’t convince others of its validity. Those around you not being able to understand how this could change their lives seems outrageous.

When you allow this frustration to impact how you treat those close to you, they will begin to question your abilities. The people who are most likely to help you take risks can quickly become those most opposed to your dream. Not because it’s a bad idea, but because who you are as a person is more important to them than your “crazy” business idea.

Remember that all the hours you spend contemplating and planning your idea isn’t what they are doing. Be patient. Write down your idea. Think of analogies that will have relevancy to them. Not only will this help you prepare to counter objections, it also helps get you ready for customers and potential investors.

Patience Convincing Investors

On the investor side, they are already successful. The need to take risk isn’t something they have to do. It’s something they choose to do. More importantly they want to take risk, but only with the right people. 99% of investors will tell you that the person is more vital to success of their investment capital than the idea.

Since they are getting pitched hundreds of ideas, this means they have so much to filter through. On top of that, most of them have multiple companies, incredible responsibilities and decisions to be made on a daily basis.

So in terms of patience, never expect everyone to see the potential in your idea. You have a 1 in 50 chance of getting a yes from an angel investor, and 1 in 300 chance from a VC. Many startup founders give up after being turned down the first time. Don’t give up the first time.

Just like it’s hard to convince your friends and family, it takes time to connect with the right investors, identify objections and develop ways to counter them. Not just through words but expanded business logic, customer acquisition strategies, and proof of concept.

So Why Be Patient?

As you try over and over again to convince friends, family, bosses, or potential investors of your genius, remember that people just can’t see what is in your brain. Everything about entrepreneurship requires the courage to take risk. Since very few are ready to make that leap of faith, the ability to see beyond the here and now becomes even more limited.

Changing the status quo requires being able to paint so vivid a picture, your target customers and potential investors will be able to see the future created if they adopt your new product or service. Think of painting this picture just like an artist would. While the vision is there, it takes time, patience and expertise to create something of true value.

Since there is no way to escape this truth, it is much more efficient to just accept it and leverage to your advantage. When the inevitable panic sets in that someone else is going to beat you to the punch, just remember they are facing the exact same challenges as you.