By Stefanie O’Connell
The word “startup” conjures images of warm, innovative workspaces, community game areas, catered lunches and laid-back dress codes. Perhaps it’s this glamorization of the entrepreneurial lifestyle that draws so many millennials to the prospect of launching their own business.
The desire to ditch the traditional career path and pursue solitary business ventures is prominent among this youngest generation of adults, with 66 percent of millennials reporting a desire to start their own business in a 2014 Bentley University survey. Just 13 percent said climbing the corporate ladder to become CEO or president was their career goal.
But it’s not all glamour, glitz and game rooms in startup life. The failure rate among startups is 90 percent, according to Fortune. To become part of the 10 percent who succeed, here’s what millennial entrepreneurs should know.
SUCCESS DOESN’T HAPPEN OVERNIGHT
The stories of startups like Uber and Facebook might make some millennials think building a successful company happens quickly and easily, but the reality is considerably different.
A Huffington Post article recalls an interview with Facebook co-founder Dustin Moskovitz in which he was asked about Facebook’s “overnight success.” His response: “If by ‘overnight success’ you mean staying up and coding all night, every night for six years straight, then it felt quite tiring and stressful.”
A successful startup venture requires constant commitment and unwavering persistence, especially in the face of obstacles and setbacks.
ENTREPRENEURSHIP IS SELF-DRIVEN
Being your own CEO might sound like the ultimate freedom, but getting your own company off the ground means operating on all cylinders all the time and in all roles. In addition to whatever product or service you’re developing, startup founders should be prepared to serve as their own human resources team, accounting department and even janitorial staff.
“Be willing to pick up the phone and talk to customers, learn to code or even take out the trash, there is no single job that is ever above or beneath you,” said Ross Cohen, co-founder and chief operating officer of the online background check platform BeenVerififed.com.
Startups can’t afford to segment responsibilities like traditional corporations. Even as they grow, employee roles and responsibilities will inevitably overlap. Founders should expect to be involved in all tasks, no matter how seemingly menial or mundane.
PEOPLE MIGHT NOT WANT WHAT YOU’RE OFFERING
Fortune magazine reports that making a product no one wants was the top reason for startup failure. A 2014 survey of failed startups by CB Insights, an angel investor and venture capital data base, found that 42 percent cited a “lack of a market need for their product” as the single biggest reason for their failure.
If you’re going to spend your time making a product, spend time making sure it’s the right product for the right market. “Business owners fall in love with their idea and don’t spend enough time segmenting their market,” said Spencer Smith of Spencer X Smith Consulting.
“You don’t want to spend all the time and effort and build a company no one wants,” said Mudit Rawat, founder and CEO of an on-demand alcohol and grocery delivery company servicing the Toronto area called Urbery.
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“Know answers to basic questions, such as what is the size of this market, who is the competition, etc. The more you research … the better your chances of solving the right problems.”
Startup life might not be as glamorous as the media portrays it, but the many challenges faced by budding entrepreneurs are far from insurmountable and offer great rewards when successfully overcome.
Stefanie O’Connell writes for GOBankingRates.com, a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.