What Entrepreneurs think and believe – Success Factors
We can all dream about what it takes to make our startup a success. From recent survey feedback, it seems evident that the urban legends leading to Success Factors are wrong. The average entrepreneur is not the one who dumped a promising career, sketched his idea on the back of a napkin, and accepted millions from an investor to make millions of his own.
These are my observations of Success Factors in Small Business Owners
- Stick with the business area you know. We all have a tendency to think that the grass in greener on the other side of the fence, but 96% of these founders ranked prior work experience in their business area as an extremely important or important success factors.
- It’s the learning; not success or failure, that makes the difference. Successful founders try and try again. 88% attributed their success to prior successes; 78% attributed success to prior failures.
- The management team makes is critical. In looking back on their success factors, 82% of the founders attributed their success to strength of the management team (not the idea, business plan, or money). No surprise here.
- A little luck never hurts. Surprisingly, a full 73% said that good fortune was an important factor in their success factors. 22% even ranked this as extremely important. Perhaps we can discount this a bit for humility, but there is nothing like being in the right place at the right time.
- Don’t discount the value of your network. Professional networks were deemed important in the success factors of 73% of the founders. 62% of the respondents felt the same way about their personal networks.
- Dropping out of school is not recommended. 95% of these founders had earned Bachelor’s degrees and 47% had more advanced degrees. 70% said their university education was important, so only a few said skip it. Born to be an entrepreneur may not be enough today.
- First-timers usually fund their own venture. Venture capital and private/angel investments play a relatively small role in the startups of first-time entrepreneurs. 70% said they had to use personal savings as a main source for their first business.
- Advice from investors is not worth much. Of the entrepreneurs who received advice from their company’s investors, only 36% ranked it as important, and 38% said it was not important at all. Surprisingly, even in venture-backed businesses, 32% said it was only slightly important. It sounds like founders want to make their own mistakes.
- Willingness to take a big risk. When asked what may prevent others from starting their own business, the highest ranked factor by 98% was lack of willingness or ability to take risks. Founders clearly found entrepreneurship to be a risky endeavor but a success factors.
- Huge time and effort commitment. Along the same lines as the previous item, 93% felt from their own experience that the work and time challenges were a major barrier (no support for the part-time, work from home, get rich quick crowd).
Hopefully, by understanding what entrepreneurs think and believe, we can foster more successes, fewer failures, and better guidance to those of you who haven’t taken the big step yet. If you are already committed, take heed of the advice of those who have been there and done that.
Please share your secret for success!