"Pick an industry, any industry. Don't worry if you don't know anything about the industry. It's likely better if you don't. Do some customer research. Find a problem. Fix the problem. Start a business."
I know I've heard that advice. But it turns out, it could be wrong.
And here's the reason why: If everyone is following the same advice, and 97% of of startups fail... something is broken.
Are You Looking at Startups Upside Down?
Before jumping on a cross-country flight this past week, a Kindle book caught my attention: The Myth of the Idea and the Upsidedown Startup.
In it, Professor Newton M. Campos questions if we're thinking of startups upside down. He thinks we do this because we like a good hero's journey.
The Hero's Journey: Entrepreneur Style
The professor says the entrepreneurs version of the story goes like this:
A person feels the call to be an entrepreneur. They hesitate. They consult with mentors and friends. They move forward. They almost end in financial ruin (oh no!). But they persevere and in the end, earn millions in financial glory.
Except that doesn't happen 97% of the time.
And the key culprit? Bad advice that encourages would-be entrepreneurs to enter into markets where they have no knowledge or resources.
When startups do that, they run out of money before they can persevere long enough to break down barriers, open doors, and get sales.
Bad Entrepreneurial Advice: Flipped On Its Head
Instead, Campos reasons, look first for startup ideas in markets where you have experience. The ideal market is where you have a reputation, or personal connections or former customers.
Your reputation, experience and former customers can lead to easy wins in the beginning. Easy wins and revenue make scaling a business much, much easier.
Why Not Increase Your Odds of Success?
There are 3% of startups that succeed -- and if that's you, keep on keeping on. We look forward to seeing you in the Inc. 5000.
But for the rest of us still looking for that million-dollar idea, maybe there's some truth in Professor Campos' reasoning.
Why not try a market you have connections in, and give yourself a little better than 3% odds of success?