Yet, despite the odds, many are taking the leap and starting business. Roughly 100 million startups are launched every year.
I've started five companies so far in my career, and I wish I knew then what I now know. Entrepreneurship is hard. It's very hard. Yet, there are strategies we use do to increase our chances of success.
Here are the top two biggest mistakes I see first-time entrepreneurs make, and tips on how to avoid making them:
1. Thinking the first customer will be the hardest one to land
Reality: Your first client will be the easiest to land.
Why? Let's say you have decided to become an entrepreneur. You identify the product or service you aim to sell, and then you go about trying to get businesses or consumers to buy it. You reach out to your network, and you ask them for introductions to their networks. You share your idea on social media, and create a website.
At some point, you will get your first customer. Almost certainly, this first customer will be connected to you in some way. Either you know them or someone in your network knows them.
Your early customers will buy from you because they know you, and knowing you means they trust you. But, you can't rely on your network and your network's network every time you need another customer. You eventually have to go out and get your second customer, and your third, fourth and so on.
To grow your business, you have to convince people who do not know you to buy from you. Getting people who don't know you, and therefore don't have any intrinsic trust in you, to buy your product or services is much harder than landing those first customers who already know and trust you.
So, don't make the mistake of thinking that just because you landed one customer, you have a business model. Instead, focus on creating selling a product or service that is valuable and needed by a group of buyers. Which brings me to mistake No. 2.
2. Focusing on what you want to do, rather than what sells
Reality: Focus on what your target market is buying, not what you want to sell.
I can't tell you how many times I've heard first time entrepreneurs say "I'm going to build X because that's my passion." And then I ask "Do you have a sense of who will buy this and why they need or want it?" And the answer is "No, I haven't thought about that yet."
The harsh reality is: Your customers don't care about you. They care care about themselves and their problems.
I recently had the opportunity to visit the MIT Innovation Lab. The head professor teaches his students that innovation and creation are not one and the same. Innovation is actually creation plus profit.
This is key. As a first-time entrepreneur, one of the most valuable things you can do to increase your odds of success is to be hyper-focused on finding out what your core customers need and delivering it. Literally ask your target market: What keeps you up at night? Then sell that.
Entrepreneurship is about grit. Steve Jobs once said that "about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance." I couldn't agree more. Focus on what sells, and create a message that resonates with a group of buyers. Above all, stick with it.